Florian Chilku

UniCredit acquired a 9% stake in Germany's Commerzbank and applied to make it 29.9%. Defying the German government's defense, UniCredit has entered into derivatives contracts to acquire an additional 11.5% of the bank. This could catapult UniCredit to the top of Germany's financial sector, surpassing the iconic Deutsche Bank. Seems like market is looking forward to a blockbuster M&A year ahead. 💼 💸 💸 #M&A #Banking #UniCredit #Commerzbank #FinancialIndustry #Marketnews #BusinessStrategy #CorporateFinance #WealthyRiseDaily

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🇩🇪 𝗛𝗼𝘄 𝘁𝗼 𝗦𝗼𝗹𝘃𝗲 𝗚𝗲𝗿𝗺𝗮𝗻𝘆’𝘀 𝗙𝗲𝗱𝗲𝗿𝗮𝗹 𝗕𝘂𝗱𝗴𝗲𝘁 𝗦𝘁𝗿𝘂𝗴𝗴𝗹𝗲? 💶 Much is written about Germany’s (explicit) public debts. However, it is neglected that besides of considerable public liabilities, there are also considerable public assets. These assets could be used to finance the fiscal gap. 𝗩𝗮𝗹𝘂𝗲 𝗼𝗳 𝗳𝗲𝗱𝗲𝗿𝗮𝗹 𝗮𝘀𝘀𝗲𝘁𝘀: € 𝟲𝟴𝟴 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 At the end of last year, the federal balance sheet showed assets of € 487 billion euros. An increase of € 44 billion since the beginning of the fiscal year 2023. Assets held by the Deutsche Bundesbank are not included. The 𝗴𝗼𝗹𝗱 𝗿𝗲𝘀𝗲𝗿𝘃𝗲𝘀 should be mentioned here in particular. The market value of gold stored in Frankfurt, New York and London amounted to almost € 201 billion at the end of last year. The federal government therefore has almost 700 billion euros in liquid funds at its disposal. 𝗦𝘁𝗮𝘁𝗲𝗺𝗲𝗻𝘁 𝗼𝗳 𝘁𝗵𝗲 𝗚𝗲𝗿𝗺𝗮𝗻 𝗕𝘂𝗻𝗱𝗲𝘀𝗯𝗮𝗻𝗸 𝗣𝗿𝗲𝘀𝗶𝗱𝗲𝗻𝘁: 𝗡𝗼 𝗴𝗼𝗹𝗱 𝘀𝗮𝗹𝗲𝘀 But the sale of the German gold reserves only remains a theoretical option. Deutsche Bundesbank President Joachim Nagel has already announced that no gold will be sold for solving the federal budget struggle. “Apart from small quantities for the usual collector coins, we are not selling anything,” says the central banker. “𝗚𝗼𝗹𝗱 𝗶𝘀 𝗮𝗻 𝗮𝗻𝗰𝗵𝗼𝗿 𝗼𝗳 𝘁𝗿𝘂𝘀𝘁 𝗮𝗻𝗱 𝗵𝗮𝘀 𝗮 𝗵𝗶𝗴𝗵 𝘀𝘆𝗺𝗯𝗼𝗹𝗶𝗰 𝘃𝗮𝗹𝘂𝗲, 𝗲𝘀𝗽𝗲𝗰𝗶𝗮𝗹𝗹𝘆 𝗳𝗼𝗿 𝘁𝗵𝗲 𝗽𝗼𝗽𝘂𝗹𝗮𝘁𝗶𝗼𝗻.” In view of the long-term development of the gold price, it was right “for us to hold gold permanently”. 𝗔 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻 𝗼𝗳 (𝗶𝗻𝘁𝗲𝗿𝗻𝗮𝗹) 𝗿𝗲𝗻𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆 Even if Germany could go into debt, it depends on the 𝗿𝗲𝘁𝘂𝗿𝗻 𝗼𝗻 𝗲𝗾𝘂𝗶𝘁𝘆 and the 𝗿𝗲𝘁𝘂𝗿𝗻 𝗼𝗻 𝗱𝗲𝗯𝘁 whether Germany should divest of state assets or borrow money from the capital market. If Germany cannot go into debt, the trade-off remains. If the return on equity is lower than the 𝗶𝗻𝘁𝗲𝗿𝗻𝗮𝗹 𝗿𝗮𝘁𝗲 𝗼𝗳 𝗿𝗲𝘁𝘂𝗿𝗻 𝗼𝗳 𝘁𝗵𝗲 𝗽𝗼𝗹𝗶𝘁𝗶𝗰𝗮𝗹 𝗽𝗿𝗼𝗷𝗲𝗰𝘁 than asset stripping is an option. In the meantime, the price of gold has risen by almost 18% since the beginning of the year. If there is really a public investment opportunity that should yield a higher internal rate of return than 18% over a 6-month period, it should be possible to find funds in the regular budget. In a final step, PIVOT Public Policy & Economics will summarize all shown options in terms of 𝗲𝗰𝗼𝗻𝗼𝗺𝗶𝗰 𝘃𝗶𝗮𝗯𝗶𝗹𝗶𝘁𝘆 and 𝗽𝗼𝗹𝗶𝘁𝗶𝗰𝗮𝗹 𝗳𝗲𝗮𝘀𝗶𝗯𝗶𝗹𝗶𝘁𝘆 to adopt a compliant fiscal budget in 2025. Stay tuned! #germany #fiscal #federalbudget #publicfinance #ministryoffinance #economics #politics #finance

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Early in the month, UniCredit quietly began acquiring Commerzbank shares amid speculation of a potential sale in Berlin. Germany, holding a 16% stake after the 2008-2009 bailout, aimed to return the lender to private ownership. UniCredit's accumulation initially reached 4.5% and grew to 9% after the book-building. To avoid notifications to Berlin, UniCredit used a total return swap, gaining economic exposure without owning the shares. This locked in the share price while retaining the option to buy later. Following this, UniCredit increased its stake to up to 20%, using again swaps and, likely, collar options to hedge against price movements. UniCredit's move might build public pressure for a potential acquisition while awaiting ECB approval. 𝐖𝐡𝐲 𝐢𝐬 𝐂𝐨𝐦𝐦𝐞𝐫𝐳𝐛𝐚𝐧𝐤 𝐢𝐧𝐭𝐞𝐫𝐞𝐬𝐭𝐢𝐧𝐠 𝐟𝐨𝐫 𝐔𝐧𝐢𝐜𝐫𝐞𝐝𝐢𝐭? UniCredit already has a significant presence in Germany through its subsidiary HypoVereinsbank. Acquiring Commerzbank could strengthen this position by merging the two entities, potentially yielding cost synergies. This could reduce political resistance by maintaining the merged bank's headquarters and stock market listing in Frankfurt. In addition to enhancing its presence in Germany, acquiring Commerzbank would give UniCredit control of its Polish subsidiary, mBank, allowing it to re-enter a key Eastern European market. Additionally, UniCredit’s strong financial performance and high market valuation position the bank to absorb consolidation costs without raising capital. Furthermore, with Commerzbank trading below book value, UniCredit could acquire it at a discount, benefiting from badwill. 𝐓𝐡𝐞 𝐫𝐞𝐚𝐜𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐁𝐞𝐫𝐥𝐢𝐧 𝐚𝐧𝐝 𝐅𝐫𝐚𝐧𝐤𝐟𝐮𝐫𝐭 𝐬𝐨 𝐟𝐚𝐫. German officials opposed the acquisition, citing transparency concerns about the shares acquisition and potential impacts on lending to the Mittelstand, crucial for the German economy. However, these concerns may be overstated given the intense competition from numerous state-owned savings and cooperative banks. Fears that a flagship German financial institution could fall under the control of an entity exposed to Italy's fiscal situation also seem exaggerated, as UniCredit is geographically diversified compared to its EU peers. Germany has limited options to block the deal, as its tools mainly apply to non-EU bidders. A "white knight" from within Germany seems also unlikely, with Deutsche Bank unable to offer better prospects. Ultimately, the ECB sees cross-border mergers as vital for narrowing the valuation gap with U.S. banks and strengthen the Banking Union. A potential UniCredit takeover will be assessed by the ECB, focusing on the business model’s sustainability, governance, risk management, and combined capital requirements. Given the performance of both banks, approval is likely.

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Supply/demand/price💡 What you see is how the rising demand for bonds of Česká spořitelna today pushed down our costs of financing. So with EUR 1.6bn demand for EUR 500m bond, we cut costs by 35bps (spread of 215bps->180bps) which means EUR 10m savings over the life of the bond. Good day in the office🎯 But the story was a bigger thriller than that, esp. given the market volatility before the upcoming 🇫🇷 French elections this weekend. Well navigated by Erste Group DCM team and the rest of JLMs! Big thanks to Peter Lendacky, Eva Bousova, Aleš Tůma, FRM, CFA, Claudia Ivanov-Huber, Maxim Börsig, Mladen Djurdjevic, Norbert Toth, Juraj Garaj and Petr Franek, SCR®🙏 Five nationalities, typical Erste melting pot.

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How do bond yields in the Eurozone compare? The chart illustrates how investors in German 10-year government bonds (known as ‘bunds’) would have received a yield to maturity of 2.22%. Yields on German bunds are used as benchmark rates for government debt not just in the Eurozone, but globally. Just one country in the Eurozone currently has a lower 10-year bond yield than Germany, which is Denmark at 2.17%. The highest yield for investors among Eurozone countries – and hence the highest borrowing cost for its government – is Italy with 3.59%. Comparing the bond yields in the Eurozone provides an insight into the relative strengths and weaknesses of these countries’ public finances and economies given that they all share a currency, a central bank base interest rate (currently 3.75%), and are all in the EU Single Market and Customs Union. Comparing yields with other currencies, such as the UK’s 3.95% for example (not shown in the chart), needs to take other factors into account, such as the UK’s much higher central bank base rate of 5%. The chart also reports the government debt to GDP levels of each country for the second quarter of 2024 according to Eurostat, which may help explain why Denmark (with debt/GDP of 34%) pays a significantly lower borrowing cost than Spain (109%). However, debt/GDP is a relatively crude measure of public finance strength or weakness as it excludes most government assets and non-debt liabilities, the funded or unfunded nature of their social security systems, as well as a country’s medium- and longer-term economic prospects and the perceived stability of that country’s government. Thoughts, anyone? #costreduction #procurement #accountancy #business #icaew #nonexecutivedirector #ned

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Turkey to Impose Minimum 15% Corporate Tax on Multinationals By Ugur Yilmaz (Bloomberg) -- Turkey plans to impose a minimum 15% tax on multinational corporates for profits made in the country, AKP lawmaker Abdullah Guler says while presenting drafted new tax proposals in Ankara. If the tax paid by a multinational company is less than 15%, the company will pay the difference until the rate reaches 15% Minimum net pension to be raised to 12,500 liras/month; expected additional burden on budget 33.2b liras ($1b) Departure fee for Turks traveling abroad to be raised to 500 liras per travel from 150 liras NOTE: The bill will be discussed at the parliament and is subject to revisions

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💰📉 Property Tax - Most important own revenue of local governments Our new Fiscal Decentralisation Report for South East Europe shows the importance and differences of property tax and its collection in European countries. Most concerning for me as an Austrian are the low amounts of property tax in Austrian municipalities: With €92 per capita (Figures are not adjusted for purchasing power) 🇦🇹, Austria lies behind Slovenia and Montenegro!!! 😟 A reform is needed and has been postponed for 20 years. ⏳ Interesting figures and insights: In the Western Balkans the Property tax revenue has doubled over 15 years from an average of 14% to 28% of own source revenues. 🇸🇮 Slovenian LGs collect €150 per inhabitant, followed by 🇲🇪 Montenegro with €129 💶 🇲🇩 Moldovan LGs collect only €9 per inhabitant from property tax 😲 🇦🇱 Albanian LGs collect half of what 🇲🇰 Macedonian LGs collect and about 5 times less than 🇷🇸 Serbian LGs Frequent legal changes, outdated fiscal registers, and weak enforcement are just some of the hurdles SEE local governments face in boosting their revenues. For more insights have a look into the Fiscal Decentralization Report for South-East Europe prepared by NALAS: Network of Associations of Local Authorities of South-East Europe and KDZ. 📊

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Payment organisation payme.uz ended the first half of the year with a net profit of 113.0 billion UZS, 7.7% higher than in the first half of 2023. The gross profit growth was 23.9%, while the expenses of the period increased from 35.0 billion UZS to 63.9 billion UZS. Note that in 2023, the number of monthly active users of the payme.uz payment service reached 3.4 million (+30%), and the number of daily active users reached 473,000 (+25%). As a result, Payme's customer base approached 12 million and #IFRS net profit for the year increased by 29.2% to USD 16.8 million.

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Q2’24 #GDP growth – anticipation peaked, but delivery was lackluster According to the flash estimate, Romanian GDP expanded marginally by +0.1% q/q and +0.8% y/y in Q2’24. This translates into an overall sluggish advance of 0.7% y/y in H1’24.   The reading falls way short of market #consensus (BBG/Reuters poll: +2.8% y/y) and our expectations. It is also at odds with #NBR’s assumption, captured within the press statement from August monetary policy meeting: “the latest data and analyses point to a somewhat more robust quarter-on-quarter economic growth in 2024 Q2 than previously anticipated, implying a marked step-up in the annual GDP dynamics.” Growth picture through the lens of monthly indicators   The performance also contrasts with the generally favorable signals from high-frequency economic indicators, as well as with the advance of the economic sentiment indicator (ESI) to the highest levels since the pandemic. The strengthening of purchasing power, the more attractive financing conditions and the resilience of the labor market buoyed the consuming instinct, a fact reflected by the bold dynamics of retail trade (+7.0% in H1’2024), particularly non-food sales. Note should be taken of the lion’s share held by private consumption in GDP formation (75%). Investment activity continued to be mainly fueled by the public sector, benefiting from the flow of EU funds and being mainly channeled towards large public infrastructure projects and the development of renewable energy capacities. Public investment expenditure amounted to RON 46.3bln (2.6% of GDP) in the first semester, a solid 41% y/y increase. The vulnerable points are represented on the one hand by the residential segment, which is going through a period of rebalancing, and on the other hand by the industrial sector, whose competitiveness problems weigh more and more heavily in the new configuration of international trade. Outlook   Today’s conflicting outcome challenges our economic growth #forecast (3.4%) for this year, and not only ours. International institutions as well as the National Commission of Prognosis projected a growth rate in the vicinity of 3% for this year. The sub performance tastes even more sour as the growth equation for next year was already a complex one, the main factor of uncertainty being represented by the instruments and dosage of the post-election #fiscal consolidation. External risks are also non-negligible: the generally tense geopolitical situation, the outcome of US presidential elections, developments in European industrial production and EU’s trade relationship with China.   Therefore, policymakers need to strike a fine balance between sustainably restoring price stability and addressing the legacies of recent crises, including replenishing buffers and durably uplifting growth. In this regard, a strong fiscal-budgetary policy and a coherent set of structural policies are indispensable, yet not enough. #Romania #GDP #economicgrowth #outlook

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🔔 German 10-Year Bund Yield Tops 2.47% ! The German 10-year Bund yield rose past 2.47% on Friday following remarks from ECB board member Isabel Schnabel cautioning against further rate cuts post-June. Schnabel stated in an interview that a rate cut in June might be warranted depending on data and new Eurosystem staff projections. However, she emphasized the uncertainty beyond June, noting the challenge of achieving stable inflation. In contrast, US data released this week indicated a slowdown in inflation and economic growth in April, heightening expectations for Federal Reserve rate cuts. Markets price in 68 bps of ECB rate cuts in 2024, down from 72 on Thursday, and 46 bps for the Fed, below 50 bps in the previous session.

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[EN] Data Sharing II: Interest Rates For all the talk about interest rates, this topic remains gravely understudied in the Turkish market. Bond, interest rate, or yield curve data have been out of reach for most purposes. No more! In this sequel to our data sharing, we’ve just released a comprehensive dataset of daily interest rates for Turkish government bonds, covering maturities from 1 day to 120 months, from January 6, 2005, up to, well, last week, May 31, 2024. This isn't your typical data pulled from secondary sources like Bloomberg—our term structure data is fitted directly to bond prices from end-of-day Borsa Istanbul bulletin files. You can find daily data for Nelson & Siegel term structures of interest rates for all maturities, affine term structures, and term premium values, as well as a measure of market-wide illiquidity. We know how tough it is to find interest rate data for the Turkish market, as we had to construct our own to study yield curve models, term premia, and illiquidity. We're hoping this dataset helps scholars explore this fertile ground for research better. For the full yield curve and all the details, check out the link below. Dive in, explore, and let us know what you think! https://lnkd.in/eNVN_KKU

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#DiasporaInvestmentDesk #AccessToLoansInGermany Q&A on Private Loans in Germany: What You Need to Know? ------------------------------------------------------------------- Do you have any questions about obtaining private loans or your Schufa score in Germany? Securing a private loan in Germany can be a valuable financial tool, whether you're looking to fund a major purchase, consolidate debt, or manage unexpected expenses. However, navigating the loan process, understanding the terms, and managing your credit score (Schufa) can be challenging, especially for those unfamiliar with the German financial system. Join our next digital investment talk and get your questions answered by our expert Enoch Wiafe Ntiamoah. Click here to register: https://lnkd.in/eFSD6Dxx

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Would you like to know how your bank can become a #DigitalChampion? I am delighted to present the sixth edition of the Digital Banking Maturity Study - the world's most comprehensive survey on digital banking in the retail business. In this edition, almost 350 banks in over 40 countries were analysed. The study covers both the mobile channel (app) and the internet & website channel along the entire customer journey and is based on a ‘mystery shopper’ study of digital functionalities, a survey of customer preferences and a UX analysis. In my view, these are the most exciting insights for the German market: 👉 Digital banking is not about the number of functions, but about customised solutions that are accepted by customers. 👉 Digitalisation budgets for the mobile channel at the expense of the internet channel 👉 Agile IT organisation crucial for top positions Please discuss the current options for action with me and our digital banking experts Hans-Martin Kraus, Bianca Santillana, David Pade, Maximilian Link and Leonie Luke. 👉 Download the study now and find out more about the digital maturity of banks worldwide! https://deloi.tt/40Txgiy

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The recent surge in debt issuance by Turkish banks suggests that international investors have regained confidence in the sector since Turkiye’s adoption of more conventional macroeconomic policies after last year’s election. Signs of oversupply are already pushing up subordinated debt issuance costs, but the significant improvement in market access is a clear credit positive for banks. #turkishbanks https://lnkd.in/eVQn75Uk

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🇹🇷 𝗛𝗲𝗱𝗴𝗲 𝗙𝘂𝗻𝗱𝘀 𝗘𝘅𝗶𝘁 𝗧𝘂𝗿𝗸𝗶𝘀𝗵 𝗟𝗶𝗿𝗮 𝗔𝗺𝗶𝗱 𝗥𝗲𝗰𝗼𝗿𝗱 𝗟𝗼𝘄𝘀 #Hedge #funds sold Turkish lira positions as the lira depreciated 0.6% in a day, driven by reduced state bank interventions. As reported by Bloomberg’s Kerim Karakaya and Tugce Ozsoy Darici, the lira depreciated 0.6% in a day, while outflows from foreign investors exceeded $𝟮 𝗯𝗶𝗹𝗹𝗶𝗼𝗻. Despite Turkey’s 50% benchmark interest rate—the second highest globally—and a 49% inflation rate, the lira has weakened by 14.5% this year. The report highlights a critical shift in market dynamics and investor sentiment. 

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The European Parliament has recently approved the final EMIR texts, known as “EMIR 3.0” that were agreed between the Council of the EU and the European Parliament in February and which introduce changes to the current EMIR framework in the EU. This article highlights the main new requirements of which derivative end-users should be aware so that they can start preparing for these upcoming change to EMIR.

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Key points to consider when evaluating the chart of the September 2024 Turkish Lira futures contract (in USD) traded on the Bovespa exchange are as follows: 1. Trend and Price Movements: • The chart shows that the value of Turkish Lira futures increased overall from April to July. • The upward trend that began in early April showed a significant increase in May and followed a fluctuating pattern in June, with a slight decline recorded in July. 2. Recent Price and Change: • As of July 9, 2024, the price of the September 2024 futures contract stands at 34,657.0 USD. • The price’s 11.14% decline indicates a short-term pullback or correction in the futures market. 3. Support and Resistance Levels: • It can be observed from the chart that prices found support at the 34,500 USD level and attempted to stay above this level. • The 34,000 USD level appears to be a resistance level, and staying above this level is important for the continuation of the upward trend. 4. Volatility: • The pronounced price fluctuations in June indicate increased market volatility and suggest that investors should be more cautious. 5. Advice for Investors: • These types of futures contracts are preferred by investors for speculative or hedging purposes. • It is important to closely monitor market conditions and economic indicators and to implement risk management strategies. This chart and information provide investors with an insight into market conditions and help them predict future movements. Futures contracts traded on the Bovespa exchange allow investors to develop various strategies. #economy #turkey #lira #data #sustainability #eurusd #istanbul #banking

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