Download PDF US US equities mainly lost this past week, with their most followed index closing this week almost 3% down (S&P500). Russell 2000 led the way down with a 3.82% decline week on week, closely followed by the tech heavy tracker (Nasdaq composite) which closed 3.62% down compared to Monday opening. Both the S&500 and the Nasdaq have now fallen for three consecutive weeks. This follows a historic week of central bank activity. Indeed, Read more…
Download PDF Introduction 50 years ago, the financial industry changed forever with the introduction of the Black-Scholes model for options pricing. However, the story started much earlier with less sophisticated approaches and has evolved significantly over the last century, encompassing notable frameworks such as the binomial tree in discrete time, and more sophisticated models accounting for stochastic volatility. This article takes you through the journey of option pricing models from the early foundations to the Read more…
Download PDF The Sovereign Wealth Fund’s first love – Sports, Media and Entertainment In October 2021, the Saudi Public Investment Fund (PIF) completed a £305m takeover of Newcastle United by acquiring an 80% stake from British retail tycoon Mike Ashley. According to research conducted by SPORT+MARKT, the Premier League, England’s first division, has an estimated annual TV audience of 4.7 billion. Newcastle United was the club with the fourth highest average attendance at football games Read more…
Download PDF Introduction February 26th 2007 marked one of the peaks of the pre-financial crisis exuberance: KKR [NYSE: KKR] and TPG [NASDAQ: TPG], together with a number of banks including Goldman Sachs [NYSE: GS] and Lehman Brothers, announced the acquisition of the Texas power company TXU for an astounding $44.3bn in Enterprise Value, the largest LBO in history at the time. Soon, however, this transaction came back to haunt the financial sponsors: instead of the Read more…
Download PDF One of the biggest secular trends in central banking policy since its inception has been increased transparency through more regular and varied forms of communication. The hope is that by being transparent, market participants can price in the policy path more gradually, lowering the chances of wild bursts in volatility and market contagion. These policies have generally been seen as successful, and today they dominate the news flow. Therefore, it is incredibly important Read more…
Download PDF Introduction Investment in defence tech start-up companies has surged over the past years as geopolitical tensions across the globe keep escalating. US venture capital firms raised their investments in defence start-ups from less than $16bn in 2019 to $33bn in 2022. The first five months of 2023 alone recorded more than 200 defence and aerospace deals worth nearly $17bn carried out by US venture capitalists. According to Shield AI co-founder and president Brandon Read more…
Download PDF Introduction For the last two years, the large majority of central banks have been hiking rates and conducting quantitative tightening programs to fight against the inflationary pressures witnessed in almost every country after the Covid reopening, supply chain shocks, Russia-Ukraine war, labor shortages, and other related factors. Despite all these efforts, in most of the advanced economies, the results achieved have been quite poor, at least when compared to markets’ initial expectations, with Read more…
Download PDF Introduction Lackluster equity capital markets are showing signs of recovery, after almost two years of low activity. The downturn was initially caused by rising uncertainty as high inflation, rising interest rates and a gloomy economic outlook that encouraged investors to ditch growth stocks and turn to safer, more established industry players. As a result of this, many firms decided to delay their IPO plans – for instance private equity group CVC Capital Partners, Read more…
Download PDF Introduction The purpose of this article is to investigate whether gold, and in particular its spot returns against other currencies, display some correlation with other macroeconomic drivers, particularly with monetary policy decisions by Central banks. Gold: Anti-Cyclical Asset or simple Commodity? In the realm of financial markets and investment, there persists a widely held belief that gold and other precious metals serve as attractive asset options for investors seeking to deploy their capital Read more…
Download PDF Introduction A new and ambitious proposal launched by U.S. regulators has taken the commercial banking industry by storm, with mixed reactions from bank executives, analysts and politicians. Fed Chair Jerome Powell came out in support of the proposal but admitted that regulators have a difficult task ahead of finding a balance between protecting the financial system and burdening banks. Nevertheless, these proposals will have a strong impact on the banking sector and beyond, Read more…
Download PDF China’s current economic downturn Over the past decades, China’s economic trajectory has signaled its resilience and strategic prowess. It went from farming to manufacturing and became a leader in technology and infrastructure. Symbols of modern progress were quickly incorporated into the cityscapes’ once-grand historical settings. However, the recent economic indicators hint at a potential shift in this narrative. China was expected to lead the world’s economic recovery after the pandemic. But the unfolding Read more…
Download PDF USA US equities traded mostly at a loss this week, with the S&P and Nasdaq closing the week at -0.16% and -0.39%, respectively. The Russell 2000 also closed below the weekly open at -0.24%, while the Dow Jones closed at +0.12%. Tesla (NASDAQ:TSLA) was the big mover among big tech, up +10.4% after news on its supercomputing business. This week also saw ARM’s IPO, this year’s biggest initial offering, through which the company Read more…
Download PDF Introduction Internationally, Bed Bath & Beyond is probably best known for its prominent role in the 2021 meme stock craze. Inside the US, however, the firm and its specialty homeware shops were a central part of popular culture. The company’s April 23rd bankruptcy capped off a tumultuous couple of years, during which Bed Bath & Beyond tried to and ultimately failed at turning around its business. As the company neared bankruptcy, it scrambled Read more…
Download PDF Introduction Swap spreads, which measure the difference between the fixed rate on a swap and the yield on a Treasury bond of the same maturity, have often been negative in recent years, particularly in the wake of the financial crisis of 2008. This phenomenon has puzzled market participants, as negative swap spreads imply that investors are willing to accept lower yields on swaps than on Treasuries. In this article, we review the literature Read more…
Download PDF Introduction Inflation made a return post pandemic and has been affecting all market participators for 18 months now. In this article, we will dive into the persistence of inflation in the UK specifically and the struggles the UK has had to face trying to cool this red-hot inflation down. Lastly, we will analyze some possible investment opportunities that have arisen from this complex macro and political environment in the UK. An important metric Read more…