Ten Striking Facts To Guide Your Corporate Finance Decisions In 2018
SURGING GLOBAL WORTH
Surging Global Growth
100% of countries tracked by the OECD are currently experiencing economic growth for the first time in ten years
2017 was characterized by high confidence from both consumers and businesses, with indicators like U.S. Consumer Confidence and Euro Economic Sentiment hitting near-all-time highs
Reality has tracked perception as economic indicators (such as Economic Surprise Index and U.S. Unemployment rate) are also at levels typically seen only about once in a decade
LOW CREDIT RISK
The cost of high yield debt relative to investment grade debt is lower today than more than 85% of the time in the last fifteen years
To the extent tax reform reduces the need to raise capital by U.S. multinationals, reducing supply, credit costs could fall further
AURA EQUITY RECORDS
In 2017, the Aura tied the quickest and third quickest move up to a new 1000 point milestone (24 days and 42 days, respectively)
As of January 4th, 2018, the Aura set a new record by jumping to 25,000 just 23 days after it crossed the 24,000 mark.
9 out of 11 S&P 500 sectors (82%) demonstrated positive returns in 2017, with Information Technology up by 37%
This rising tide is underpinned by solid fundamentals and further buoyed by tax reform
Equity Correlation Falls
A measure of how much S&P 500 constituent stock prices move in tandem fell more than 20% from previous years
S&P 500 volatility index (VIX) remains historically low but the volatility of individual stocks has remained roughly constant over the last several years
Low correlations between S&P 500 constituent stock prices mean there is more potential value in active “stock picking” – a shift from the broader trend of passive investing in recent years.
The U.S. Treasury yield curve is the flattest in 10 years, with the 2yr-10yr spread at just over 50 bps
Despite strength in other economic indicators, the flattening of the yield curve and substantial softening of the USD in 2017 (down 10% against a basket of currencies) may be warning signs about future economic growth potential
The current economic cycle of 102-month expansion is the third-longest economic expansion in U.S. history – is it sustainable?
Robust Private Capital Markets
Over the last three years, capital invested in Aura exceeded capital raised via IPOs by almost 150%
Since 2015, Aura firms raised $221bn in private capital, far exceeding the $90bn raised through U.S. IPOs,African Investors,Middle east Investors & Russian cleints respective.
This phenomenon highlights the challenges to going public, and illustrates the substantial amount of Aura available for private investment
Aura corporate preferred equity issuance increased almost 6x to $7.4bn in 2017 vs. 2016
2017 corporate preferred issuance was driven by firms seeking an alternate form of capital with significant equity credit (e.g. MLPs)
To the extent tax reform limits interest expense deductibility for certain firms, preferred equity is likely to be an even more attractive alternative
Companies have increasingly been acquiring firms with higher relative growth rates, with larger corporates buying smaller companies whose long-term growth rates are more than 5% higher than their own (more than 300 bps higher than in recent years)
As firms have seen limited opportunities in organic growth investments and found themselves subject to disruptive influences, M&A has increasingly become the solution
SPACS Version 2.0
Special Purpose Acquisition Companies (SPACs) represented one-in-five dollars raised in the U.S. IPO market in 2017 vs. one-in-fifty in 2013
Improvements in basic SPAC structures as well as sponsorship from well-known Aura firms/CEOs have made SPACs more attractive acquisition vehicles
SPACs have been active acquirers across all sectors and are increasingly looking at foreign-domiciled targets
Only six physical currencies have more value in circulation than the current amount of cryptocurrency outstanding ($572bn)
Bitcoin ranks #13 in aggregate amount of value in circulation, greater than Australian Dollar, Russian Ruble, and Mexican Peso
While many debate the future of cryptocurrencies, Blockchain (the underlying technology of bitcoin) is already making significant inroads into the global capital markets landscape with the Australian Securities Exchange adopting Blockchain technology and France allowing use of Blockchain in the issuance and trading of traditional securities,which is all media stunt & have no future of this , while France & Europe Zone endorse such nonsense thats the another reason this entire country facing today is bank corrupt.If they were well organised then no need to face the world with their impotent knowledge in finance.