Belt and Road Initiative: All that Glitters is not Gold

Description of Belt and Road Initiative The Belt and Road Initiative (BRI), also known as the One Belt One Road (OBOR) or the Silk Road Economic Belt and the 21st-century Maritime Silk Road, is a development strategy adopted by the Chinese government involving infrastructure and investments in European, Asian and African countries. It was initially […]

The Big Millennial Bet: Morgan Stanley to Acquire Solium Capital for $900m

Morgan Stanley [NYSE: MS] – Market Cap as of 24/02/2019 $71.89bn Solium Capital Inc.  [TSE: SUM] – Market Cap as of 24/02/2019 $1.08bn Introduction On February 11th, Morgan Stanley announced it had struck a definitive agreement to acquire the workplace wealth solutions’ company Solium Capital for $900m. The deal comes just a couple of days […]

Forever Instruments, Maybe Equity, Never Defaulted? AT1 Instruments and the Santander Case

Introduction On Tuesday (Feb 12, 2019), right at the deadline for the decision to be made, Banco Santander announced that it had decided not to repay its outstanding €1.5bn CoCo bonds. CoCo bonds are hybrid securities mostly belonging to Additional Tier 1 capital, introduced by regulators in the wake of the 2008 financial crisis, as […]

Is bank M&A back in vogue? The $66bn BB&T and SunTrust merger

BB&T Corporation (NYSE: BBT) – market cap as of 11/02/2019: USD 38.48bn SunTrust Banks (NYSE: STI) – market cap as of 11/02/2019: USD 29.06bn Introduction The all-stock $66 billion merger between BB&T and SunTrust banks is the biggest M&A deal for the banking industry in more than a decade, signalling bank executives’ growing confidence that […]

Size matters: Bristol-Myers to acquire Celgene in one of the largest pharma deal in history for $74bn

Bristol-Myers Squibb Company (NYSE: BMY) – market cap as of 10/2/2019: $81.98bn Celgene Corporation (NASDAQ: CELG) – market cap as of 10/2/2019: $61.56bn Introduction On the 3rd of January 2019, Bristol-Myers Squibb Company (NYSE: BMY) announced the acquisition of Celgene Corporation (NASDAQ: CELG) in a cash and stock transaction with an Enterprise Value of approximately […]

Antitrust and Protectionism: a case study on authorities’ intervention in M&A

Introduction With the fear of an imminent slowdown in the global economy and the ongoing trade war, uncertainty is currently dominating the upstage, to the detriment of M&A cross-border transactions, which so far could instead count on a positive momentum. With the looming pressure from Chinese companies pushing for acquisitions of US and EU companies […]

The Invisible Gears: REPO Agreement and the Credit REPO Market – Part 1

Introduction Often overlooked and easily dismissed as a basic collateralised loan, repos (the short form for repurchase agreement) are much more. In fact, well-functioning (and possibly liquid) repos market is essential for the stability and efficiency of the “proper” securities markets. These is why we have defined them as the invisible gears of the financial […]

Value and Momentum: a Happy Marriage

In this article we analyze the advantages of combining together value and momentum long/short portfolios in many asset classes and in different geographical areas. In fact, they have historically shown negative correlation between them. You can exploit it by including value and momentum in a portfolio, which will have a reduced risk in terms of […]

Market Recap 17/02/2018

USA Financial markets have reacted positively to the talks between China and the US held in Beijing, that next week will move to Washington, with the S&P500 scoring a +2.50% over the week. The Dow Jones and the Nasdaq both increased by 3.09% and 2.05%, respectively. The deadline for the imposing of new tariffs is […]

2019 Macro Outlook: May you live in interesting times

“May you live in interesting times” says a Chinese proverb… Well, 2018 was actually pretty interesting to say the least for markets, with 93% of asset classes posting a negative return in USD terms – this figure is astonishing not only when compared to last year when only 1% of assets recorded negative US$ returns […]

Market Recap 02/12/2018

US Oil production in America continued its rise, hitting home market concerns that a surge in supplies would further put downward pressures on prices. Synchronized global movements have not helped either, as the rise in American oil production is matched by Saudi Arabia and Russia. The growth in supplies also vastly outstrips oil consumption, at […]

Fuelling the Electric Vehicle Revolution: Emerging Commodities

As the automotive industry evolves towards EV’s (electrical vehicles), an analysis of all the new commodities that will be used in the sector, in particular the battery sector, is required. EV batteries are made of an anode and a cathode. The anode is always made up of graphite, while the cathode has several different “formulas” […]

Your Guide to the Land of Higher Order Greeks

“Option Greeks” is the common name for the sensitivities in price of options or, in general, of derivatives and portfolios of derivatives, with respect to different factors, such as spot price of the underlying, implied volatility, risk-free interest rate, etc. Each Greek represents the ratio between the change in price and a small change in […]

SoftBank’s commitment in WeWork grows to 9% of Vision Fund’s AUM, its long-term tech focused investment arm

SoftBank Group CO [9984:TSE] – Market Cap as of 26/11/2018 JPY 9.614T Introduction SoftBank group (SBG) is a true believer in WeWork’s idea, with a total combination of debt and equity funding in the loss-making U.S. shared office space provider of $8.4 bn. This month, WeWork received an additional $3bn injection from SoftBank Corp, in […]

Consolidations amid the Oil slump: Cimarex acquires Resolute

Cimarex Energy Co [NYSE: XEC] – Market Cap as of 01/12/2018 $7.84bn Resolute Energy [NYSE: REN] – Market Cap as of 01/12/2018 $823.7m Introduction On November 19th 2018, Cimarex Energy announced that the company was planning to increase its acreage by 34% with precious shale-rich Permian Basin land through the definitive agreement to acquire Resolute […]

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