Inflation Linked Swaps – overview and current developments

Download PDF Introduction Inflation is back. After more than 10 years with inflation rates at around 1-2% in most developed economies, governments and central banks are now being confronted with significantly higher inflation rates. This increasing rate of cost of living has prompted a majority of the central banks worldwide, after many of them insisted that inflation would be transitory, to hike interest rates at a historical pace in a desperate effort to bring inflation Read more…

Market Recap 02/10/2022

Download PDF USA The S&P 500 touched the lowest levels since December 2020 this week, reaching an 8% loss MoM. The 10-year Treasury yield reached a 12-year-high, approaching 4%. On Thursday, the S&P 500 closed at -2.1%, due to the fear of additional rate hikes, driven by higher-than-expected employment data. The airline industry heavily suffered from the cancellation of 2000 flights due to the hurricane Ian, with the most important stocks in the sector losing Read more…

Eataly’s Next Step – Investindustrial acquires controlling stake in the Italian Food and Beverages group

Download PDF Introduction On September 21st, European private equity fund Investindustrial announced that it is buying 52% stake in Italian luxury food and beverages group Eataly. The deal will see Investindustrial invest €200m in the company, with plans to increase its worldwide presence. This came as a surprise to many investors, as Eataly was seen as a candidate for a domestic listing, after the previous controlling stakeholders, the Farinetti family, changed the company’s statute, allowing Read more…

Credit Suisse is shrinking its investment bank. A mistake?

Download PDF Introduction Recently, it has been impossible to ignore the troubles Credit Suisse has been facing. After three years of scandals, the bank is evaluating to break up its Investment Bank to try to leave this chapter behind. Under the proposals allegedly put forward to the board, the bank would be looking to split the division into three, seeking to have its advisory business aside under one part, keeping the remaining activities under the Read more…

Valuation and perspective – Schneider Electric offers to buyout UK tech business Aveva but faces shareholder opposition

Download PDF Introduction On September 21st, Schneider Electric, which owns 60% of Aveva, submitted an offer to buy the remaining shares for £31/share. It will take the company private, in a deal valued at £9.5bn, one of the largest deals in the UK in 2022. However, with falling tech valuations and a troubled market, minority shareholders regard the purchase as an opportunistic takeover that does not reflect Aveva’s true long-term potential. About Aveva Aveva is Read more…

The Emerging Markets Dark Tunnel

Download PDF Introduction Emerging Markets Debt is making a comeback in Google search bars. The term refers to sovereign bonds issued by less-developed countries. In fact, the words “debt” and “emerging” are closely linked: debt permits a country to raise fresh capital and with that to grow towards standards reflected in a developed economy, thus becoming an emerging economy. In this article, we will explain who the emerging markets are, how some low-income countries already Read more…

Systematically Trading Volatility Spreads

Download PDF Introduction The following article is heavily inspired by the paper “Investment Strategies with VIX and VSTOXX” (Stanescu, Tunaru, 2012) which analyzed different volatility trading strategies. The strategies are either based on a simple signal or the forecasting of spreads through GARCH models. After analyzing a more recent dataset (our time series will start from January 2nd, 2018, and ends on July 6th, 2022), we propose a variation of the “vanilla” strategy which proves Read more…

Banker’s Toolkit: Financial Institutions Group

Download PDF Introduction As the backbone of the financial industry, the banking sector has always had a predominant role in worldwide economies. Over the last decades, banks have expanded their operations at a global scale, and imposed their presence in almost all economic activities. Understanding this vast sector requires dividing it into sub-sectors. More precisely, we can distinguish two main categories, that of commercial banks, and that of investment banks – both supervised by central Read more…

Market Recap 25/09/2022

Download PDF USA The start of the week can be described as the calm before the storm in major US stock indices, as investors digested last week’s higher-than-expected inflation print and were waiting on the Federal Reserve to announce their policy decision on Wednesday. Accordingly, no index posted significant gains or losses before the announcement of the decision, with the most notable movement being a sharp drop on Tuesday as investors braced for another large Read more…

ADOBE FIGMA DEAL

Download PDF Introduction Adobe Inc, one of the largest software companies worldwide, has announced the acquisition of software design start-up Figma Inc in an attempt to expand its online collaboration tools and reach new customers. The deal, which is valued at around $20bn, is a mix of half cash and half stock and will mark the biggest takeover of a private software company. About ADOBE Adobe Inc [NASDAQ : ADBE] is one of the world’s Read more…

Capitalising on the high market? Repsol to sell 25% of its oil business in search of a greener identity

Download PDF Introduction On September 7, 2022, Repsol announced it would sell a 25% stake of its worldwide upstream business to EIG for $4.8bn, consisting of both equity and net debt. The transaction is expected to close within the coming six months, subject to customary closing conditions. The deal comes as Spain’s largest oil company pushes to raise funds to invest in renewable alternatives seeking a lower-carbon future, while supplying the still needed and highly Read more…

Investing in the Future of Uranium Mining

Download PDF Industry Overview Uranium is a heavy metal that has been used as a concentrated energy source for more than 60 years. It is extracted from uranium-rich minerals, such as uraninite. Uranium ore can be mined either open-pit or underground and is then crushed and treated in a mill to extract the valuable uranium from it. The mined uranium is then processed, stored, and sold as uranium oxide concentrate (U3O8). Its radioactive properties allow Read more…

Summer Deal Recap

Download PDF Welcome back from the summer break! Despite overall year-on-year declines in m&a activity following a record year in 2021, deal flow this year has been rather resilient in spite of the current macroeconomic conditions, including record inflation, conflict in Ukraine, supply crunches, and liquidity tightening from central banks. For more specific insight into recent deals across numerous sectors, check out BSIC’s 2022 Summer Deal Recap below. TMT Orange Merger with Grupo MásMóvil Deal Read more…

Becoming an adult? What Porsche’s planned IPO tells us about its future

Download PDF Introduction After months of rumours, intentions and promises, Porsche, the famous luxury German automaker, and property of the Volkswagen Group (VW), finally seems ready for its IPO, initially announced in February 2022. Porsche should start trading by the end of September and the beginning of October on the Frankfurt Stock Exchange, finalizing the IPO by the end of the year. The offering could value Porsche at between €60 billion to €85 billion, according Read more…

Leveraged Finance: The Eternal Ticking Time-Bomb?

Download PDF Introduction 2022 has been a difficult year for investment banks. Despite the relative strength of their trading divisions, a collapse in M&A value has been weighing down on revenues. Something that has been leading to outright losses, however, is Leveraged Finance. This lesser-known part of the financing groups at investment banks has been the driver behind hundreds of millions of dollars’ worth of losses, with the potential of billions more to come. Such Read more…