Alicia García Herrero (Natixis) | China’s so-called Two Sessions, the country’s most important annual political gathering, marked a transition this year. Held in early March, it included the final work report – or summary of government business – delivered by outgoing Prime Minister, Li Keqiang, who after two five-year terms as China’s prime minister, handed over to Li Qiang. Against this backdrop, Li Keqiang’s 2023 work report was blissfully short,…
Pablo Fernández | We sent a short email (see exhibit 1) on March, 2023 to more than 15,000 email addresses of finance and economics professors, analysts and managers of companies obtained from previous correspondence, papers and webs of companies and universities. We asked about the Risk-Free Rate (RF) and the Market Risk Premium (MRP) used “to calculate the required return to equity in different countries”. By March 31, 2023, we…
Link Securities | China’s official advance manufacturing activity index, the manufacturing PMI, came in at 51.9 in March, above the 51.6 expected by the analysts’ consensus, although it was below the 52.6 of the previous month. We recall that a reading above 50 points indicates expansion of activity from the previous month, while a reading below that level indicates contraction of activity. Most components decelerated after February, although production, new…
Link Securities | The US Energy Information Administration (EIA) reported yesterday that US crude oil inventories fell by 7.489 million barrels in the week ending 24 March 2023, their biggest drop since November last year. Analysts had instead expected a rebound of 0.092 million barrels. Gasoline stocks fell by 2.904 million barrels, above analysts’ expectations for a decline of 1.617 million barrels. Finally, distillate inventories, which include diesel and heating…
Crédito y Caución (Atradius) | After two years of decline during the pandemic years, global insolvencies increased by 9% in 2022. The increase was related to the halting of Covid fiscal support packages and the lifting of temporary changes to insolvency legislation. In some markets, insolvencies have completely normalized or even exceed pre-pandemic levels. In the majority of countries, though, we observe that insolvencies are in the process of adjusting…
Bankinter : US banks celebrate the purchase of Silicon Valley Bank/SVB by First Citizens (FC) with a +2.5% rise in yesterday’s session. Positive highlights: First Citizens (+53.7%), First Republic (+11.8%), Bank of America (+4.9%) and Citigroup (+3.8%). Analysis team’s view: This is an interesting deal for First Citizens and good news for US banking and the global financial sector. Our reasoning is as follows: (1) FC acquires SVB’s assets (loans…
Intermoney | First Citizens finally proceeded to buy SVB for $500 million, assuming $56 billion in deposits and $72 billion in loans. The estimated cost of SVB’s bankruptcy has been set at $20 billion, a loss borne by the FDIC and representing 15% of the fund’s total. Not surprisingly, just a year ago, SVB was worth $40 billion and was the 14th largest bank in the US. Just a month…
Banca March : Kristalina Georgieva, head of the IMF, has warned of increased risks to financial stability, which “come at a time of higher debt levels”. Georgieva recalled that the global GDP growth forecast is below 3%, mainly due to the war in Ukraine and the restrictive monetary policy.
Banca March | The search engine Google has announced the launch of Bart, an artificial intelligence chatbot to compete with Open-AI’s popular ChatGPT. For the time being, the US multinational communications services company has opened access to the intelligent assistant to a limited number of users in the United States and the United Kingdom, in order to detect possible failures. Like ChatGPT, Bart is a chatbot that can be conversed…
Intermoney | The same could be said of the update of the macro picture forecasts. Economic projections are not necessarily a roadmap for policy and are subject to change. In fact, they have been changing from quarter to quarter. The projections point to inflation at 3.6% this year, one tenth of a percentage point higher than forecast in December. In 2024 it will moderate (2.6%), but it will not be…