Weekly research notes covering the full spectrum of asset classes

Gentiloni’s Shopping List

February 24, 2017 / Marco Fraire

Background and MPS On Thursday, the Italian parliament approved a law that will create a 20 billion-euro fund that will be used to recapitalize troubled Italian banks. Montepaschi, predictably, will be the largest beneficiary after their failed capital raising program. The bank was projected to need EUR 8.8B; thanks to the conversion of the subordinated bonds into non-trading equity, the intervention of the state […]

The Curious Incident of the Oil Markets

February 24, 2017 / Daniel Leach Canibano

Has the market euphoria stemming from the OPEC deal gone to far? Since November, the oil markets have been wrought with ambiguity. The November OPEC agreement (read about it here : [link to OPEC deal article]) saw OPEC members accept an oil production cut that was meant to rise prices from their incredibly low USD […]

Merger post-mortem?

February 21, 2017 / Tasleem Ahmad

Kraft Heinz Company announced an offer to acquire 100% of Unilever Company on 2017-02-19. This, by our calculations, created a pre-merger speculation opportunity with a time horizon of one-month and a maximum expected annualized return of 300% measured in expected share price performance. Kraft Heinz then promptly withdrew the offer following serious backlash from the […]

Drilling for profits

February 18, 2017 / Tasleem Ahmad

Company Overview & Background Seadrill Partners LLC is an offshore deep-water drilling company listed on the New York Stock Exchange (NYQ). The company owns, operates, and acquires offshore drilling units. It provides operations in oil and gas exploration and development in regions across the world. Seadrill has a very concentrated revenue profile with BP accounting […]

Response to BSIC – Bullish spread call in a debt trap

February 15, 2017 / Mate Rimar

Our colleagues at the Bocconi Students Investment Club discovered an interesting market, the Brazilian equity market. As the MSCI World index reached its 20-month high on the 14th, BSIC’s call spread is in the money; however, their analysis failed to mention the tail risks associated with such a trade. As future asset allocator, and users […]