NEWSLETTER of October 27, 2023

The following content has been added at finexpert:

Houlihan Lokey
FINTECH MARKET UPDATE
Overall FinTech M&A activity has decreased compared to 2022; however, a meaningful number of deals across the size spectrum are still getting done. Ongoing “flight to quality” with auction processes for resilient assets are still attracting competitive bidder fields, while demand for unprofitable businesses is limited. >more

Allianz Research
GLOBAL INSOLVENCY OUTLOOK 2023-25
With buffers waning, most vulnerable corporates and sectors have been caught between a rock and hard place in 2023, with hospitality, transportation and wholesale/retail on the front line. Excess cash at non-financial corporates remained high in the first half of 2023 at EUR3.4bn in the Eurozone and USD2.5bn in the US, more than +30% above pre-pandemic levels. But this cash buffer remains highly concentrated in the hands of large firms and in specific sectors (tech, consumer discretionary). At the same time, net cash positions are dropping faster than economic activity. Besides hospitality, transportation and wholesale/retail, other sectors are catching up fast, in particular construction, where backlogs of work have been almost completed – especially in the residential segment. >more

International Monetary Fund
GLOBAL FINANCIAL STABILITY REPORT
With core inflation still high and declining only slowly in many advanced economies, central banks may need to keep monetary policy tighter for longer than is currently priced in markets. In emerging market economies, progress on lowering inflation appears to be more advanced, with the benefits of early rate hikes becoming apparent. However, there are discrepancies across regions. Widening divergence of inflation and economic outlook could mark the beginning of the desynchronization of the global monetary policy. >more

International Monetary Fund
WORLD ECONOMIC OUTLOOK
The baseline forecast is for global growth to slow from 3.5 percent in 2022 to 3.0 percent in 2023 and 2.9 percent in 2024, well below the historical (2000–19) average of 3.8 percent. Advanced economies are expected to slow from 2.6 percent in 2022 to 1.5 percent in 2023 and 1.4 percent in 2024 as policy tightening starts to bite. Emerging market and developing economies are projected to have a modest decline in growth from 4.1 percent in 2022 to 4.0 percent in both 2023 and 2024. Global inflation is forecast to decline steadily, from 8.7 percent in 2022 to 6.9 percent in 2023 and 5.8 percent in 2024, due to tighter monetary policy aided by lower international commodity prices. Core inflation is generally projected to decline more gradually, and inflation is not expected to return to target until 2025 in most cases. >more

INDEPENDENT IPO ADVISERS
Tim Jenkinson, Howard Jones, and Emmanuel Pezier
2023
Firms increasingly appoint independent advisers in IPOs alongside underwriters. We explore why, and we formulate a selection model. Controlling for issuer-adviser matching, we find advisers in aggregate have no effect on first-day returns, withdrawals, or fees paid to underwriters. However, underpricing with generalist advisers (who offer diverse services alongside IPOs) is significantly greater than with specialists. We link these findings to the different incentives of generalists and specialists. Our results are consistent with naivety on the part of certain issuers, but more likely reflect the willingness of large issuers to pay through underpricing for the wider services of generalists. >more

CROSS-BORDER MERGERS AND ACQUISITIONS
Isil Erel, Yeejin Jang, and Michael S. Weisbach
2023
One of the most consequential events in any firm’s lifetime is a major acquisition. Because of their importance, mergers and acquisitions (M&As) have been an enormous area of research. However, the vast majority of this research and survey papers summarizing this research have focused on domestic deals. Cross-border ones, however, constitute about 30% of the total number and 37% of the total volume of M&As around the world since the early 1990s. We survey the literature on cross-border M&As, focusing on international factors that can lead firms to acquire a firm in another country. Such factors include differences in economic development, laws, institutions, culture, labor rights, protection of intellectual property, taxes, and corporate governance. >more