Overview of TOP weekly news

Central Bankers Meeting at the Crisis Forum

The central bankers of the largest banks meet every year in a discussion forum “fighting the crisis.” Central bank instruments to combat the next phase of COVID-19 were assessed, which also faces growing questions about the impact of the first round of economic support, in particular, whether it has increased the value of risky assets, technology stocks and housing.

“The initial and most damaging wave of the economic shock may be around us, but more waves may come and whatever the economic scars will be long-lasting. The policy space may still narrow. Said Mark Sobel, a former US Treasury official and chairman of Omfif, a central banking think tank. He added: “The Fed and the European Central Bank have used up a lot of ammunition. Although advanced economies are recovering significantly, there will still be a legacy of high unemployment, large output gaps and huge dislocations that need to be managed. ”

Massive drop in VIG’s profit

The well-known Vienna Insurance Group reported a 39% year-on-year decline in pre-tax profit to €79.2 million in the second quarter. Gross written premiums decreased by 3.1% year on year to €2.46 billion over the same period. The company, on the other hand, pleased shareholders by confirming its intention to pay a dividend of €1.15 per share last year.

However, the statement of CEO Elisabeth Štadler was negative, stating that due to the continuing global uncertainty, it is not possible to publish the company’s outlook until the end of the year. “We are well prepared for further business. The financial year 2019 was excellent for us and we want our shareholders to have a share in it,” said Stadler.

Performance of Vienna Insurance Group’s value (Source of the graph: Investing)

The long-awaited IPO of Airbnb

Cramer, CEO of Airbnb, said the outlook for the future of the hotel industry, which he said should remain shaken by a revenue shortfall in the long run and will not be able to further prevent Airbnb from further prosperity. “Thanks to COVID 19, Airbnb is now the safest way to travel, which is why this IPO could become the purchase of the century. The company has a market almost to itself, “Cramer said.” Previously, strong restaurant and hotel industries and their unions will no longer have enough influence to keep Airbnb in check, “he added.

The Airbnb business has recovered very quickly thanks to people fleeing hard-hit areas. Nevertheless, the company was valued at $18 billion in April, only about half of how much investors valued it in 2017.

The company’s management was originally decided to subscribe directly for shares, ie the method of entry used, for example, by the streaming service Spotify. Last week, however, it became apparent that the company had submitted an initial share subscription (IPO) documentation for approval. More information on one of the most interesting IPOs of the year is not yet known.

 

Wirecard sells assets

The company collapsed due to a large-scale accounting scandal. The insolvency proceedings were officially opened based on the statement of the insolvency administrator of the company. Wirecard has officially launched insolvency and plans to sell off its global assets. In Germany, it laid off more than half of its employees (730 people) and terminated the contract with the remaining members of the board.

Last month, a German prosecutor’s office detained three former executives on suspicion of organized fraud, embezzlement, accounting fraud and stock market manipulation. Michael Jaffe, the insolvency administrator, said the workforce needed to be downsized to keep the company’s core business going. The company will retain 570 people at its headquarters in the Bavarian city of Aschheim.

Performance of Wirecard’s value (Source of the graph: Tradingview)

Offer to buy a stake in Italian football

Private equity groups CVC Capital Partners and Advent International have teamed up to offer €1.3 billion to acquire a minority stake in a Serie A football competition in Italy as clubs decide whether to bring foreign investors to one of Europe’s biggest leagues.

To win, candidates must first receive the support of 14 of the league’s 20 clubs to set up a new private-equity company to oversee media rights. If successful, 15 clubs must vote for their bid before the competition. Bain Capital, a private limited company, is bidding against Advent and CVC.

Paolo Dal Pino, president of Serie A, told the Financial Times last month that the league “is exploring how to create value in the long run. Do we do it ourselves or do we do it in partnership?”

 

Watch this week:

Thursday, August 27, 2020

The United States will publish GDP growth for the second quarter. A 32.5% decline is expected on a quarter-on-quarter basis.

The second major report from the United States will be the development of initial applications for unemployment benefits. A thousand new applications are expected.

Friday, August 28, 2020

Canada will publish the month-on-month development of GDP for June. Analysts expect GDP growth to increase to 5.6% from 4.5% last month.

Source of the text: Investing, Zerohedge, Financial Times, Reuters, Tradingview

Disclaimer: The content of the Reports constitutes Marketing Communication and does not constitute Investment Advice or Investment Research or an offer for any transactions in financial instrument. The content of the Reports represents the view of our experts on a generic basis, and does not take into consideration individual readers personal circumstances, investment experience or current financial situation. In addition, the Reports have not been prepared in accordance with legal requirements designed to promote the independence of Investment Research, and are not subject to any prohibition on dealing ahead of the dissemination of Investment Research. Readers using the Reports should consider the possibility of encountering substantial losses. The past performance is not a guarantee of future results. Therefore, Goldenburg Group Limited shall not accept any responsibility for any losses of traders due to the use and the content of its Reports.