* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download History Sheet Information entered by [ ]
Survey
Document related concepts
Investment management wikipedia , lookup
Systemic risk wikipedia , lookup
Stock trader wikipedia , lookup
Stock selection criterion wikipedia , lookup
Market (economics) wikipedia , lookup
Investment fund wikipedia , lookup
Financialization wikipedia , lookup
Business valuation wikipedia , lookup
Syndicated loan wikipedia , lookup
History of private equity and venture capital wikipedia , lookup
Private equity wikipedia , lookup
Early history of private equity wikipedia , lookup
Private equity in the 1980s wikipedia , lookup
Transcript
Presentation Equity Markets Remco Lenterman Goldman Sachs International May 2002 23/05/2017 02:01 Slide 2 Agenda 1 The concept of Equity 2 Why do companies issue shares? 3 Why invest in Equity? 4 Maturity of the Equity Markets 5 The Role of the Intermediary 6 The Role of the Regulator 23/05/2017 02:01 Slide 3 A Tale of Tulips… 1630 in Holland: Tulips are considered an investment by the population 1636: “Tulipomania” Tulips are traded with a rage that spreads to all classes of the society 1637: Speculation begins… Bulbs are sold faster than they can grow In March, Francois Koster pays DFL 6650 for a few dozen tulips Fortunes are made all over the country Market collapses on the rumour that the tulips are worthless… Panic seizes the market In May 1637, Tulip prices collapse by 99% of the price they traded at two months earlier 23/05/2017 02:01 Slide 4 Agenda 1 The concept of Equity 2 Why do companies issue shares? 3 Why invest in Equity? 4 Maturity of the Equity Markets 5 The Role of the Intermediary 6 The Role of the Regulator 23/05/2017 02:01 Slide 5 The concept of Equity Bank loans Long-term debt Subordinated debt Equity Claim on profits 23/05/2017 02:01 Slide 6 Agenda 1 The concept of Equity 2 Why do companies issue shares? 3 Why invest in Equity? 4 Maturity of the Equity Markets 5 The Role of the Intermediary 6 The Role of the Regulator 23/05/2017 02:01 Slide 7 Why do companies issue shares? To Raise Capital To Improve the Profile and Visibility of the Company To Create Currency for Strategic Growth via Acquisition Employee Incentives To Create Long-Term Exit Strategy for Shareholders if they wish to sell 23/05/2017 02:01 Slide 8 Equity Market Environment Equity issuance volumes in Europe (in E mn) Amount E mn 300,000 Privatisation Corporate 253,661 250,000 192,364 200,000 82% 150,000 128,834 131,325 74% 100,000 115,002 88,975 64% 68% 65,857 91% 54,375 50,000 41,196 6,778 81%7,301 83% 44% 19% 17% 1990 1991 0 1992 1993 30,758 69% 56% 2,460 67% 65% 36% 35% 31% 1994 1995 33% 32% 26% 18% 86% 9% 1996 1997 1998 1999 2000 2001 14% 2002 Year Source: Dealogic Bondware. Excluding preference shares, units, rights and funds. Including domestic shares. Amount for 2002 is YTD. 23/05/2017 02:01 Slide 9 Equity Market Environment Global Equity Issuance ($bn) by region US Europe Asia $490 $419 $52 $46 $319 $266 $39 $25 $92 $124 $16 $230 $194 $21 $110 $138 $149 $156 $131 1996 1997 1998 Source: Euromoney Bondware, SDC $320 $285 $179 $208 $189 1999 2000 2001 23/05/2017 02:01 Slide 10 Agenda 1 The concept of Equity 2 Why do companies issue shares? 3 Why invest in Equity? 4 Maturity of the Equity Markets 5 The Role of the Intermediary 6 The Role of the Regulator 23/05/2017 02:01 Slide 11 Why invest in Equity? Long-term and short-term return Equity/Fixed Income ratios A hypothetical $100 invested in the Dow Jones in 1928 would have been worth over a $1mn in 2001 A hypothetical $100 invested in the Dow Jones in 1999 would have been worth $91 in 2001 A hypothetical $100 invested in the US Treasury Bonds in 1928 would have been worth $4,170 in 2001 A hypothetical $100 invested in the US Treasury Bonds in 1999 would have been worth $142 in 2001 23/05/2017 02:01 Slide 12 Agenda 1 The concept of Equity 2 Why do companies issue shares? 3 Why invest in Equity? 4 Maturity of the Equity Markets 5 The Role of the Intermediary 6 The Role of the Regulator 23/05/2017 02:01 Slide 13 Maturity of the Equity Markets Absolute Size (Market Cap of broadest Index in Euro trn) Market cap (E trn) Market cap / GDP Market Cap (€trn) 18 16 Relative Size as Multiple of GDP 1.8 16. 4 Mcap/GDP 1.6 1.5 1.5 14 1.4 12 1.2 10 1 8 0.8 6 0.6 4 0.4 0.8 0.6 2.7 0.5 2.4 2 1.2 0.2 1.0 0.3 0 0.0 0 US Japan UK France Germany China countries US Japan UK France Germany China countries 23/05/2017 02:01 Slide 14 Maturity of the Equity Markets 60 60 40 40 20 20 0 0 LAN D NET HER SWIT GER FRA N Notes: Pension figures as of June 2000, Insurance figures as of December 1999 Notes: Datas as of June 2000 S 80 LAN D 80 N ET HER 100 2000 ZER LAN D 100 S 120 ZER LAN D 120 UK 140 MAN Y 140 1993 SWIT 160 UK Insurance MAN Y 180 GER 160 CE % Pension CE 180 Allocation to equities by pension funds in Europe FRA N Size of pension and insurance markets in Europe as a % of GDP 23/05/2017 02:01 Slide 15 Agenda 1 The concept of Equity 2 Why do companies issue shares? 3 Why invest in Equity? 4 Maturity of the Equity Markets 5 The Role of the Intermediary 6 The Role of the Regulator 23/05/2017 02:01 Slide 16 The Role of the Intermediary CORPORATE ADVISORY INVESTMENT ADVISORY CAPITAL / LIQUIDITY / EXECUTION ADVISORY 23/05/2017 02:01 Slide 17 Typical Investor / Intermediary relationship - - Investor - - Portfolio Management Trading Desk In-house research - - Intermediary - - Research Sales Sales-Traders Investment advisory Traders Execution advisory & Liquidity Execution Advice Liquidity 23/05/2017 02:01 Slide 18 Why Liquidity is important Immediacy provided to clients Depth of the order book in TOP 10 stocks (in Euro): TOP 10 Vodafone BID OFFER Typical institution order size 1,500,000 800,000 E 20mn Nokia 400,000 400,000 E 20mn Siemens 300,000 300,000 E 15 mn BP 480,000 400,000 E 15 mn Telefonica 350,000 350,000 E 15 mn TotalFinaElf 400,000 150,000 E 15 mn Ericsson 600,000 600,000 E 15 mn Glaxosmithkline 800,000 400,000 E 15 mn 1,500,000 250,000 E 15 mn 350,000 52,000 E 15 mn Royal Dutch Petroleum Deutsche Telekom 23/05/2017 02:01 Slide 19 Agenda 1 The concept of Equity 2 Why do companies issue shares? 3 Why invest in Equity? 4 Maturity of the Equity Markets 5 The Role of the Intermediary 6 The Role of the Regulator 23/05/2017 02:01 Slide 20 The Role of the Regulator To Preserve Integrity of the market To Ensure Transparency To Protect Investors To Maintain Confidence in the Financial System