NEWSLETTER of September 12, 2025

The following content has been added at finexpert:

UBS
RED THREAD: EUROPE EDITION - MID-YEAR REPORT
UBS’s Red Thread: Europe Edition – Mid-Year 2025 Report explores Europe at a pivotal moment, describing the continent as a “crossroads” where a shared currency coexists with 27 diverse markets and regulatory frameworks. In an exclusive interview, Professor Enrico Letta calls for a renewed single market vision that adds a “fifth freedom” of research and innovation while integrating vital sectors such as finance, energy, and communications. UBS experts analyze whether the recent increase in allocations to European assets signals a temporary tactical move or a longer-term structural shift, particularly as correlations between U.S. and European equities continue to weaken. The report also examines challenges like debt mutualization, sovereign yield risks, and corporate credit trends, while emphasizing the importance of smarter regulatory guardrails to boost Europe’s competitiveness and unlock growth potential. >more

ZIA Zentraler Immobilien Ausschuss
IMMOBILIENWIRTSCHAFT IM UMBRUCH – WAS 10 JAHRE DIGITALISIERUNG ZEIGEN
The tenth edition of the Digitalization Study by the German Property Federation (ZIA) and EY Parthenon shows that the real estate industry has made significant progress over the past decade, moving from early pilot projects and the establishment of digital standards to a growing use of artificial intelligence and advanced technologies. Artificial intelligence has emerged as a key focus, with 90 percent of respondents viewing it as the most important technology for the next five years. Despite these advances, persistent barriers remain, including limited human resources, poor data quality, outdated systems, and high costs, which continue to slow down digital transformation. This year’s spotlight topic, Data Lifecycle Management, emphasizes the need for a structured approach to managing data across the entire life of a property, from planning and construction to operation and eventual sale, with 71 percent of companies recognizing its importance. >more

Deloitte
GRENZGÄNGER 2025: DEUTSCHLAND BLEIBT SORGENKIND FÜR AUSLÄNDISCHE INVESTOREN
The Deloitte study Grenzgänger 2025 highlights that Germany continues to pose challenges for foreign investors. In 2025, foreign holdings operating in Germany recorded total losses of 17.1 billion euros, an increase of 11 percent compared to 2022, with about a quarter of investments reporting losses, particularly in industrial products, services, and banking. In contrast, German holdings abroad performed better, reducing their losses by 19 percent to 10.1 billion euros, although the United Kingdom remains the most challenging destination with losses of 1.6 billion euros. Against the backdrop of a stagnant German economy and ongoing international trade conflicts, the study emphasizes the need for companies to critically assess their international portfolios and consider strategic measures such as distressed mergers and acquisitions, liquidations, or out-of-court insolvency procedures to maintain competitiveness. >more

Deutsche Bank Research
NEED FOR SPEED - THE DRAGHI REPORT ONE YEAR ON
One year ago the EC presented the Draghi report, a roadmap on how to improve EU competitiveness in light of a widening EU-US productivity gap. In this report we take stock of the concrete policy actions that have been launched since then, particularly those that go beyond strategy papers. Overall, we conclude that progress is mixed - no game changers, but some substantial reforms. >more

FUNDAMENTAL GROWTH
Robert D. Arnott, Chris Brightman, Campbell R. Harvey, Que Nguyen, and Omid Shakernia
2025
Conventional growth indices suffer from two important shortcomings. First, stocks that are anti-value (very expensive) are not necessarily growth stocks. The decision to include a stock in a growth index should be based on fundamental growth measures, such as growth in sales, profits, or R&D spending rather than pricebased measures. Second, when these indices are weighted by objective measures of growth (rather than by market capitalization) performance markedly improves. Overpaying for growth is unhelpful. We also assert that some stocks with poor growth prospects and unattractive valuations may have no place in either value or growth indices. >more

COUNTRY RISK: DETERMINANTS, MEASURES AND IMPLICATIONS -THE 2025 EDITION
Aswath Damodaran
2025
As companies and investors globalize, we are increasingly faced with estimation questions about the risk associated with this globalization. When investors invest in China Mobile, Infosys or Vale, they may be rewarded with higher returns, but they are also exposed to additional risk. When Siemens and Apple push for growth in Asia and Latin America, they clearly are exposed to the political and economic turmoil that often characterize these markets. In practical terms, how, if at all, should we adjust for this additional risk? We will begin the paper with an overview of overall country risk, its sources and measures. We will continue with a discussion of sovereign default risk and examine sovereign ratings and credit default swaps (CDS) as measures of that risk. We will extend that discussion to look at country risk from the perspective of equity investors, by looking at equity risk premiums for different countries and consequences for valuation. In the fourth section, we argue that a company's exposure to country risk should not be determined by where it is incorporated and traded. By that measure, neither Coca Cola nor Nestle are exposed to country risk. Exposure to country risk should come from a company's operations, making country risk a critical component of the valuation of almost every large multinational corporation. In the final section, we will also look at how to move across currencies in valuation and capital budgeting, and how to avoid mismatching errors. >more