Euro risk-free asset wanted

Introduction The introduction of the common currency started a landmark European integration process. However, the sovereign debt crisis showed all the limits of an incomplete European integration, limited to monetary policy only, with a single central bank and 19 independent debt markets. The sovereign debt crisis was exacerbated by a vicious relationship between peripheral Europe […]

Market Recap 26-11-17

United States Stocks were higher in the holiday-shortened week amid expectations that a strong holiday season would boost top-line growth for retailers, ending a two-week stretch of lower markets. The S&P 500 gained 0.93% on the week and finished at a record high of 2,602.42. The Dow Jones Industrial Average closed up 0.86% on the […]

Yield harvesting in US govies

Introduction In this article, we look at the yield curve of US govies, and in particular we will try to understand its flattening upon rate hikes. This puzzling phenomenon is not something new under the horizon. The same effect was observed under the Greenspan led of the FED. Between June 2004 and December 2005, the […]

The Rise Of User-Based Valuation In Tech

Introduction When we look at the biggest companies by market cap, many of them are Tech firms, capable of leveraging innovative technologies to create new types of businesses. Most times they offer business models that are so different from the companies we are used to, that we struggle in finding the best way to give […]

Consolidation under the shadow of giants: Marvell and Cavium join forces in $6bn deal

  Marvell Technology Group Ltd. (NASDAQ:MRVL) – market cap as of 24/11/2017: $11.80bn Cavium Inc. (NASDAQ:CAVM) – market cap as of 24/11/2017: $6.14bn Introduction On November 20, 2017, Marvell Technology Group has agreed to buy rival chipmaker Cavium in a cash and stock deal which values the target company at around $6bn. The deal marks […]

Emaar lists through an IPO 20% of Emaar Development for $1.5bn

Emaar Development PJSC (EMAARDEV:DFM) – market cap as of 24/11/2017: $6.26bn (AED 23bn) Introduction On November 22, 2017, Emaar Properties sold on the DFM (i.e. Dubai Financial Market) 20% of the shares of its domestic development arm in an Initial Public Offering, at $1.64 per share. Emaar capitalisation at listing was c. $6.56bn with 800m […]

European Junk Yields Lining Up With Treasuries

Would you buy risky corporate bonds whose return is slightly higher than one of the safest securities in the world, US T-Bills? Probably not. Nonetheless, the market seems to accept this. The question is: how long will it last? We believe this situation will not persist in the long run and for this reason we […]

Market Recap 19-11-17

  United States This week, similarly to the past month, the main focus of the US market was the tax reform which would strongly impact US small-caps equities and the US dollar. In particular, on Thursday, the US House of Representatives voted to pass its version of the bill. Although this is a step forward […]

Dynamics of the Leveraged Loan Boom

Investors are demanding an increasing amount of leveraged loans, with a lower capital cushions and little covenant protections. Furthermore, they are demanding a lower spread over the floating reference rate. In this article, we will give an overview of the situation, the fundamental reasons behind this trend and the potential risks. Leveraged loans Leveraged loans […]

Total buys Engie’s LNG assets for $1.5bn in a race to boost its gas business

Total S.A. (NYSE: TOT) – market cap as of 17/11/2017: $138.514bn Engie S.A. (PAR: ENGI) – market cap as of 17/11/2017: $34.837bn Introduction On November 08, 2017, the French multinational oil and gas company Total announced that it entered into an agreement to buy the Liquefied Natural Gas assets of electric utility firm Engie in […]

The Conglomerate Dilemma: Reshaping General Electric

General Electric Company (GE:NYSE) – market cap as of 17/11/2017: $157.92bn Introduction and past events General Electric (GE) is an American multinational conglomerate corporation incorporated in New York and headquartered in Boston. As of 2016, the company operates through the following segments: Aviation, Current, Digital, Energy Connections, Global Research, Healthcare, Lighting, Oil and Gas, Power, […]

GGP Receives Unsolicited Proposal from Brookfield Property Partners

Brookfield Property Partners (NYSE:BPY) – market cap as of 17/11/2017: $5.59bn General Growth Properties (NYSE:GGP) – market cap as of 17/11/2017: $22.38bn Introduction On November 13, 2017, Brookfield Property Partners made a non-binding proposal to acquire all the outstanding shares of common stock of General Growth Properties. Brookfield Property Partners already owned 34% of the […]

Trading the Dispersion: chapter II

Quick recap In the last newsletter we published an article providing the theoretical foundations of Dispersion Trading (in case you missed it: http://www.bsic.it/lost-dispersion-trading/). As promised to our readers, here is a follow up with some real market applications. However, you still need to wait for the chapter III in the next newsletter to see the […]

Market Recap 12-11-17

United States While markets hit record highs on Wednesday (Nov. 7), investors concerned about the prospects for tax cuts took the chance to get out of the equity market, pushing the markets down in the last 2 trading sessions of the week. This was probably the reaction to the news that indicated cuts might not […]

Introduction to Market Microstructure

The market microstructure of electronic markets is a topic that is usually left outside the “standard” set of courses within an academic degree, both at the B.Sc. and at the M.Sc. level. However, some knowledge of market microstructure can be particularly handy for any students willing to build a career in almost any field of […]

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