NEWSLETTER of October 25, 2019

The following content has been added at finexpert:

We updated our capital market data

(Multiples, Betas and Returns) as to October 15, 2019 >more

BlackRock

GLOBAL INSURANCE REPORT 2019: RE-ENGINEERING FOR RESILIENCE

Now in its eighth edition, the 2019 BlackRock Global Insurance Report provides insights from 360 senior insurance and reinsurance executives across 25 countries, representing over U.S. $16 trillion in investable assets. The report covers views on market conditions, portfolio construction challenges and the role of private markets and ESG, and it provides BlackRock’s latest perspectives on key issues affecting the insurance industry. >more

KfW Research

CREDIT MARKET OUTLOOK OCTOBER 2019

The boom of the credit market in Germany does not seem to come to an end. New lending business, as estimated by KfW Research, expanded in the second quarter by a strong 7.1% year-on-year. Thus, growth momentum was boosted once again. The main driver, however, was new business with short-term loans. These are often used to finance inventories or liquidity bottlenecks. For this reason, the most recent development is probably an expression of the weak economy, which is clouding the prospects for the lending business. >more

Mergermarket / Dechert

GLOBAL PRIVATE EQUITY OUTLOOK 2020

Growing concerns about the state of politics in major markets as well as fears over a potential recession are the biggest challenges currently facing the private equity industry. Amid this volatile environment, innovative strategies are becoming commonplace as the industry is being forced to adapt to an overabundance of capital. >more

Ernst & Young

GLOBAL CAPITAL CONFIDENCE BAROMETER

The global economy is softening and desynchronizing, but according to the EY Global Capital Confidence Barometer, respondents still expect growth. Global economic activity has slowed in some of the major economies in 2019. But most major economies are still growing. >more

DEBT RENEGOTIATION AND DEBT OVERHANG: EVIDENCE FROM LENDER MERGERS

Yongqiang Chu
2019
This paper studies whether debt renegotiation mitigates debt overhang and improves investment efficiency. Using mergers between lenders participated in the same syndicated loans as natural experiments that exogenously reduce the number of lenders and thus make renegotiation easier, I find that firms affected by the mergers experience more loan renegotiations and increase capital expenditure investment. I also find that the effect is stronger for firms with higher Q, suggesting improved investment efficiency. Further evidence suggests that the effect concentrates on loans without performance pricing provisions and unsecured loans, providing further support that lender mergers improves investment efficiency for firms suffering from debt overhang ex ante. >more

A TALE OF TWO PREMIUMS: THE ROLE OF HEDGERS AND SPECULATORS IN COMMODITY FUTURES MARKETS

Wenjin Kang, K. Geert Rouwenhorst, and Ke Tang
2019
This paper studies the dynamic interaction between the net positions of traders and risk premiums in commodity futures markets. Short-term position changes are mainly driven by the liquidity demands of non-commercial traders, while long-term variation is primarily driven by the hedging demands of commercial traders. These two components influence expected futures returns with opposite signs. The gains from providing liquidity by commercials largely offset the premium they pay for obtaining price insurance. >more