Category Archives: Uncategorized

Spain Overview: Economic Analysis and M&A Market Trends

Free Trade: New Challenges Ahead

From ESCP Finance Society,
A comprehensive analysis of the challenges globalization and free trade are facing in the wake of Brexit referendum and American elections

Escp Europe Finance Society

On the 23rd of June 2016, the British people decided to leave the EU, the only geographical area that almost completely fits the textbook definition of free trade, i.e. “the economic policy of not discriminating against imports from and exports to foreign jurisdictions.”. They made this decision official on the 27th of March, and lots of interrogations remain about the new agreements between the EU and Great Britain. In fact, a NatCen study shows that 88% of Britons back free trade, but 69% of them also support customs check and a harder immigration policy. This, associated with a lot of privileges like passporting no longer being available to British based companies, would push talents away, and ultimately entail less growth and innovation in Great Britain. But this is only one of the many possible scenarios. As said before, the EU is the only really integrated area. In the rest of…

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A ghost in the Street?

From ESCP Europe Finance Society, A new ghost in the street?, by Tancredi Viale

Escp Europe Finance Society

Today, is Tech day. Snapchat’s parent company will be trading today in the New York Stock Exchange with a price tag of $17.0 per share for a total valuation of $24 billion. It is the most awaited and the largest IPO since Alibaba started trading in 2014 with a valuation of $168bn. American capital markets have not seen many tech companies going public despite the growing number of unicorns in the tech sector. Investor will look at this IPO also to evaluate  the health of the Tech IPO market. Many start-ups prefer to stay private where they can benefit astronomic valuation as emerged in the latest financing rounds of Uber or Airbnb. Investors are thirsty of new tech stocks and Snapchat valuation seems to support the view. Some concerns remain, such as the profitability profile of the company and growth prospects or the scalability of Snapchat customer base.

Snapchat is the…

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Johnson & Johnson to Acquire Actelion for $30 Billion With Spin-Out of New R&D Company

From Escp Europe Finance Society, The biggest European drugs takeover in 13 years: Johnson & Johnson has unveiled its intention to acquire the Swiss drug-maker Actelion Ltd (SIX:ATLN) with a move that will cost $30bn to the US company. Find out in this article more about the two companies, the deal structure and discover an overview of the healthcare M&A sector.

Escp Europe Finance Society

Johnson & Johnson (NYSE:JNJ), the world’s largest healthcare holding company, with total registered worldwide sales of $71.89bn in 2016, has unveiled its intention to acquire the Swiss drug-maker Actelion Ltd (SIX:ATLN) with a move that will cost $30bn to the US company.

Johnson & Johnson

Johnson & Johnson is an American multinational medical devices, pharmaceutical and consumer packaged goods manufacturer founded in 1886. It has more than 250 companies located in 60 countries around the world while their products are sold in over 175 countries. Their companies are broken down into several business segments: consumer healthcare, medical devices and pharmaceuticals. Johnson & Johnson’s consumer healthcare segment produces a variety of consumer care products in the areas of baby care, skin and hair care, wound care, oral health, OTC medicines and nutritionals.
Johnson & Johnson’s brands include numerous household names of medications and first aid supplies.
Among its well-known consumer products are the Band-Aid Brand line…

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Bond activity after the American election

From ESCP Finance Society, a comprehensive analysys of the Bond activity after Trumps’ election, by Ghali Bensouda and Giulia Maccelli

Escp Europe Finance Society

Trump’s victory in November led up to sudden changes in financial markets. Firstly, the fiscal spending he promised has led to higher commodities price as the US government will ask for more commodities to build more facilities. The future tax reduction under Trump’s administration results in repatriation of dollars that strengthens the US currency. The trade tariffs that Trump wants to implement with US commercial partners will have a negative impact on exports of some emerging countries including China and Mexico. Above all, this fiscal stimulus will create inflation that the FED is trying to control by hiking its targeted interest rate from 0.5% to 0.75% knowing that higher interest rates causes lower bond prices. Since the US election in November roughly $3trn have moved from bond markets to stock markets[1].

schermata-2017-02-09-alle-11-25-42

Two of the most important factors hurting bond prices right now are then the fact that inflation…

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The Power of Sight: Essilor Luxottica Merger

From ESCP Finance Society, a deep look into one of the most important merger occurred in Italy, by Guglielmo De Martino, Imad El Ahdi and Filippo Zanini

Escp Europe Finance Society

Companies Overview

Luxottica:

Global leading Italian Company in design, production and distribution of high-technical quality fashion, luxury, sport and performance eyewear with a brand-names portfolio consisting of Ray-Ban, Oakley, Vogue Eyewear, Persol, Oliver Peoples e Alain Mikli. It also includes prestigious licenses as well as brand like Giorgio Armani, Burberry, Bulgari, Chanel, Dolce&Gabbana, Michael Kors, Prada, Ralph Lauren, Tiffany & Co., Versace and Valentino. The firm was founded in 1961 by the current Chairman Leonardo Del Vecchio in Agordo (VE), Italy. It nowadays employs more than 75.000 people and is headquartered in Milano. Currently Delfin S.a.r.l., controlled by Del Vecchio family, acts as a holding company with a 61.9% stake, having no common managing interest with the subsidiary from an operational perspective.

The business model adopted covers every step of the value-chain production: design, development, production, logistics and distribution. This allowed Luxottica to operate as manufacturer and retailer in more…

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Credibility of Central Banks – A comprehensive analysis of ECB and FED effectiveness

From ESCP Europe Finance Society, a comprehensive analysis of ECB and FED effectiveness, by Conor Marriman, Niccolò Ricci and Alessandro Sicilia

Escp Europe Finance Society

On the 1st of January 1999, the ECB assumed responsibility for monetary policy in the euro area, with the primary objective of maintaining price stability, keeping the euro area’s target inflation rate (calculated using the Harmonized Index of Consumer Price, HICP) below, but close to 2% over the medium term. This objective has even been reinforced with the ratification of the Lisbon Treaty in 2007. Seventeen years later in 2008 the global financial crisis erupted causing the greatest economic recession since 1928. Since then the ECB has been put under additional pressure to advise on regulation and enforce banking supervision while fostering economic growth. Extremely unconventional monetary measures have been taken to achieve this objective and a recover of the economy and productivity.

On the 12th of November 2008, the first measure was implemented by cutting the interest rates for deposits, overnight loans and the Main Refinancing Operations. The two…

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Breakfast with: Maxime Sbaihi, Eurozone Economist at Bloomberg

By
Luca Cartechini
Global Head of Markets & AM @ ESCP Finance Society

Escp Europe Finance Society

Breakfast with: Maxime Sbaihi, Eurozone Economist at Bloomberg

Maxime is an economist with a strong educational background (ESCP, MiM 2010). He has many years of working experience in the finance industry, both in Paris and London and across different institutions such as S&P, BNP, CA and Oddo & Cie. He also worked as an adviser for the French Minister for Higher Education and Research.

maxime-escp

Q: Before anything else, I would like to thank you for joining the ESCP Europe Finance Society ‘Coffee Break’. Would you like to start by sharing an overview of your professional and academic background?

Maxime: I have been working for nearly 3 years as an economist at Bloomberg in London, covering the euro area. Just before, I was a junior economist at Oddo Securities in Paris. That was my first job after finishing a Masters in international economics from the Paris Dauphine University…

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On the Rollercoaster – Yearly Recap

From ESCP Europe Finance Society
By
Tancredi Viale

Escp Europe Finance Society

The 2015 has been a very turbulent year for financial markets globally. Greece, the unpredictable oil rout and weak growth perspective in China repeatedly triggered waves of sell-offs during the last year. Here a closer look at the main characters or events that set the trends this year.

S&P 500 Yearly PerformanceSP500

Oil

The oil rout has started in the middle of last year, when it collapsed from the range $110/100 a barrel to levels close to the post Financial Crisis lows, $35/45 a barrel. Since the beginning of 2015, Oil has been very volatile, trading in a range between $35 and $65 a barrel. Its unpredictable trend affected financial markets on a global scale. The high-yield bond market is under strict observation after the low prices of oil have been pushing a large number of shale gas companies on the verge of bankruptcy. On December 10, Third Avenue Focused Credit…

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Shadows at the horizon – Breaking through Shadow Banking

From ESCP Europe Finance Society,
By
Soukaina Bouzri, Master Student

Escp Europe Finance Society

Shadow banking refers to the whole range of intermediaries that intermediate credit through complex funding techniques. Unlike the traditional banking system, which is shielded from runs because of insurance guarantees, the shadow banking system entails a very high level of risk. This very risk gathers momentum regarding the size of the system. Arguably, it is estimated in the US to be around 20 trillion $ whereas the bank credit running barely represents the half.

Thus, how do shadow banks serve a critical role in our financial system and how far should they come under regulators scrutiny?

First of all, let’s have a look at the process of credit intermediation in the shadow banking system. Credit intermediation can be divided in three parts: credit, maturity and liquidity transformation.

  • Credit transformation basically consists in lending to AA borrowers while issuing AAA liabilities
  • Maturity transformation is the use of short term deposits to…

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