Since the 1850s and the industrial revolution, the growth of the world population has been increasing steadily. In 2017, there are about 7.6 billion people in the world, 962 million of whom are over 60 years old. According to a UN report, there will be 11.18 billion of them, including 3.1 billion over 60 years old by the end of the century. Growth will therefore represent more than 222% for this segment of the population compared to 47% for the overall population. So, have a look on this: The activity related to the elderly, a market of the future.

If we compare these figures with data on economic activity related to the elderly, we can see that there is a strong potential in this market. Thus, according to the Director of Global Thematic Management at CPR AM Vafa AHMADI, “for more than 15 years, companies linked to ageing have had an average growth rate in turnover and results that are higher than the rest of the economy (between 1 and 1.5%) and a lower cost of capital”.

Similarly, Bank of America Merill Lynch now estimates the silver age industry at $7 trillion and could reach $15 trillion by 2020, an increase of more than 200%.


Even if these economic data remain projections, the market retains the growth potential of older people’s activity in relation to demographic data. In addition to this structural trend of the silver age, its purchasing power is linked to the importance of the assets held by this segment of the population, which reinforces the hypothesis of a positive evolution of this market.

These are the reasons why the financial markets are interested in the activity of the elderly. In recent years, several UCITS/SICAV funds have emerged that specialise in the silver age business. These funds mainly include the health, financial services and cyclical consumer sectors that provide solutions for people over 55.

The main funds dedicated to this sector in France are Generali Investments Sicav SRI Ageing Population, CPR Global Silver Age (Europe), CPR Silver Age (world), LO Funds – Golden Age, Schroder International Selection Fund Global Demographic Opportunities, Robeco Global Consumer Trends Equities and Performance Vitae.

To conclude, we can also add a psycho-behavioural component to this subject with the evolution of generations and mores. Children no longer necessarily live close to their parents’ home due to increased mobility and telecommunications. It is now possible to “take care of your parents at a distance”. Thus, it is not uncommon today to have people over 60 years of age alone or with their spouse who need care or home help services and who have little or no opportunity to travel.

The solutions proposed by the silver age companies then take on their full meaning because they adapt to these new parameters and enable these people to be cared for at home. In addition, there is a real need for autonomy for these people, which is likely to lead to the emergence of innovative services based in particular on new uses of artificial intelligence in full development.

One example is a person in need of 24/7 assistance, it may be financially difficult to assume and practically impossible to find a solution other than a retirement home but can be accomplished effortlessly by a robot at a lower cost and perhaps under more satisfactory conditions for the population concerned, the inadequacy of staff and resources in retirement homes being regularly pointed out.


Sources: Bank of America Merill Lynch, UN, Morningstar with-a-management-th%C3%A9matic.aspx

Antoine NODETAntoine NODETMay 24, 2018


The company created seventeen years ago presents itself as a “digital biotech”, a sector in vogue on the American stock markets and which as a result obtains very generous valuation ratios. In fact, they are software publishers designed to help patients follow their treatments for chronic diseases, heavy treatments such as cancer.

Authorisations are required because of the impact on health, as medical devices, the risk being in the delivery of care. These schemes may be reimbursed to a greater or lesser extent depending on the country and health systems. They can only be issued on medical prescription. This is actually the only difference with a traditional publisher. The barrier to entry is not that of a conventional biotech or pharmaceutical.

The basic principle put forward by society is that prescriptions are poorly followed up due to painful side effects (in the case of cancer) or fatigue (need for continuous daily monitoring).

The company now has two software programs for type I and type II diabetes. They allow remote monitoring via a web portal allowing follow-up by the doctor to adjust the insulin dose and manage side effects. The patient sends their blood glucose levels and insulin intake frequency. The device works for all insulin brands and is authorized in France by the Haute Autorité de Santé. According to initial clinical data, 80% of patients would reach their glycated hemoglobin target at six months of treatment follow-up compared to only 40% without the software.

In France, the company has an exclusive agreement with Sanofi, which distributes it with its insulin Lantus, Sanofi’s flagship product. Voluntis will receive 30% royalties on the sales of the device. Another example of sources of income is the agreement with an American mutual insurance company, the only one at the moment, but which is rich in lessons, even if it is a small structure on an American scale with 850,000 policyholders. Insured persons using insulin on WellDyne Rx’s list will systematically be prescribed the VOluntis device. Indeed, proper compliance with diabetes treatment would result in a saving of $4,690 per year because complications would be avoided.

In addition, the company is developing similar devices for oncology to improve the monitoring of side effects that often lead to discontinuation or inadequate monitoring of therapy.

The company, which has raised more than €43 million since its creation, raises €32 million in funds for its initial public offering. In 2017, the company posted revenues of 8MM which are milestone payments by its partners and the annual loss amounts to 10M. This means that the fundraising will represent just under two years of operation at this rate. EBITDA would be in balance in 2020, or even positive. The company aims for a turnover of 50 million euros in 2021, which would allow it to achieve operational balance “from 2022”.

We are not in a position to comment on these figures, as no financial analysis has been distributed except to a few referenced persons, as is now the practice despite Europe’s desire to make progress in terms of market information and efficiency and its Mif2 text. This practice reminds us of the transactions made under the columns by the “wet feet” at the Palais Brongniart not so long ago. Except that this practice of the unregulated market is now protected by lawyers.

Apart from the absence of financial information, the following reservations lead to strong reservations about the advisability of subscribing.

First of all, this assumes that the patient is equipped with a smartphone and is able to use it.

Then, what will be the degree of adoption of the system? Once adopted, how long will the patient comply with this discipline? It is striking to note that at the time of the connected objects, the patient must read his blood sugar level and then transfer it to his smartphone. Tedious and not very modern. For example, how many people persist in transferring data to a paper document? Why should it be different with this device?

What about the doctor’s remuneration for the follow-up? In France, remuneration is based on consultations. However, it must be acknowledged that we finally have a more modern, pragmatic and professional Minister of Health who is ready to modernize a system that is based on outdated economic analysis. There are fewer and fewer general practitioners and less and less time.  Assuming that the numerus clausus is removed, the situation will not improve all at once.

The current Facebook scandal is a timely reminder of the importance of confidentiality and the value of health data. There is a real risk here.

Finally, if diabetes is THE disease of the 21st century, it is not certain that measures or new treatments will not be able to contain it. In addition, there are competing systems including the connected pump. Insulin sensors, which are currently very popular with patients, the first concerned and ultimately decision-makers, provide information on the insulin dose to be taken. Without violating data confidentiality and in a way that diabetics consider simple.

If we believe in this project, it is certainly too early to judge its potential success. Especially since the valuation is ambitious with a market capitalization of 128 M now for a turnover of 50 M targeted in 2021.

To early, too ambitious, too expensive.

Hugo KAISERHugo KAISERMay 17, 2018


Socially Responsible Investment (SRI) has a 300-year history. At the origin of SRI is the willingness to invest in accordance with its values. This will mainly result in the refusal to finance certain sectors but also in the desire to support the most disadvantaged. The religious philanthropic movement’Quaker’, for example, refused to invest in arms and the slave trade and advocated integrity and solidarity. The development of SRI has been eventful but very real and mainly driven by the emergence of new approaches such as ESG criteria, for Environment, Social, Governance, or sustainable development themes thanks to a mobilisation around climate change. But for most investors, SRI is still far too vague a concept. If it were to be summed up in one word, one could agree to use the word: utility. Indeed, this is the very principle that governs this management style because it makes it possible to make the investment useful for society. This term, which seems to be a good seller, must be accompanied by a transparency obligation.

Some will consider the addition of extra-financial criteria in asset management to be destructive of performance, while others will criticize the purely marketing aspect of SRI. In order to counteract these hasty judgements, it seems essential to bring to the forefront the scope of SRI and the benefits provided by this management style.

The purpose of this exercise is not to preach to the convinced, but rather to bring to the forefront an alternative to traditional asset management unfortunately still too focused on the short term and immediate returns.

Some approaches focus more on what the company produces, others on how it behaves.

    • exclusion: for ethical reasons, linked to sustainable development or public health for example, certain activities are excluded: tobacco, weapons, fossil fuels, nuclear energy, etc.
    • sustainable themes: certain themes or sectors are structurally privileged because they are considered to contribute positively to sustainable development: renewable energies, energy efficiency, water, etc.
    • l’impact investing: this investment aims, in addition to financial performance, to achieve a concrete environmental or social impact, for example by enabling certain disadvantaged communities to improve their standard of living: microfinance, energy access projects, agricultural development in emerging countries, etc.
  • Approaches focusing on corporate behaviour include:
    • le Best in Class: after a detailed review of the environmental, social and governance policies of the companies in the investment universe, the “most responsible” companies in each sector are selected.
    • The Best in Class does not imply a priori sectoral deviations but many variants of it such as the Best in Universe or the Negative Screening implies them.
    • Normative filters: they aim to exclude companies that do not comply with certain international conventions such as the United Nations Global Compact.
    • Commitment: rather than excluding companies with weaknesses in certain ESG aspects, the manager will engage in a structured dialogue with them to try to change their practices.

Of course, all these approaches can be combined, which can further complicate the understanding of the approach. But then why are there so many ways of doing SRI?

  • Each one has his own idea of what is socially responsible:
      • Most French investors have a positive or neutral view of nuclear power, unlike their neighbours.


  • Responsible managers and investors pursue different objectives:
    • Materiality or responsibility: some focus on ESG issues that can have an impact on the value of the company and therefore on a limited number of criteria while others favour a holistic view of the company whether the issues are material or not.
    • Risk conviction or budget: strong SRI convictions can lead to significant sectoral deviations that do not always meet institutional investors’ allocation and risk budget constraints.

This complexity, which results from the history of SRI and the different needs of investors, may at first sight be perceived as daunting, but it is in fact an opportunity for investors to invest in an SRI fund that truly meets their expectations and answers the question: What is important to you?

  • The reputational risk: choose a fund with at least one normative filter.
  • Get a performance that is not too far from that of the benchmark index while being SRI: favour a Best in Class approach without adding exclusionary or normative filters.
  • Avoid certain long-term ESG risks: opt for a Best in Universe or Negative Screening approach or, at a minimum, for a Best in Class approach focused on materiality.
  • Having an impact in terms of sustainable development: focus on investing impact and sustainable themes.
  • Benefit from financial opportunities linked to structural changes: focus on sustainable themes.

According to a meta-analysis combining 2200 studies conducted in 2015 by Friede, Busch and Bassen, about 90% of the data conclude that the use of ESG criteria in asset management does not penalize the company’s financial performance. More importantly, the vast majority of studies report superior results compared to traditional asset management.

ESG factors are of strategic importance in asset management, an ESG risk optimization approach within an asset allocation contributes to increasing the potential for performance while minimizing risks. A comparison between different diversified portfolios showed even more conclusively that the risk of the portfolios could thus be reduced by about a third.

It is therefore possible to have a positive impact thanks to its investments, making them useful to society, without any counterpart in terms of performance.



On paper, the new lease accounting standard (ifrs 16) is a non-cash adjustment that does not change much. However, this new standard will have a significant impact on financial aggregates and ratios as well as on the perception of risk shifting.

ifrs 16

EBIT (earnings before interest & tax) margins are artificially inflated, EV/EBIT multiples distorted, EPS adjusted upwards or downwards and balance sheets are overwhelmed by assets and liabilities relating to leased property. The purpose of this article is therefore to clarify the concrete impacts of ifrs 16, both financial and operational, and to identify the sectors most affected by this new accounting system

At the beginning of 2018, it is time to forecast and understand the debates that will shake the financial world.  As the valuation of listed companies reflects the expectations and valuations of operators, there is no doubt that the new ifrs 16 standard will be one of the topics of this financial year.

Published in January 2016, the new ifrs 16 standard on leases will be applicable from 1 January 2019. In short, this new IASB standard transforms off-balance sheet commitments, operating leases, into assets and liabilities. This new accounting rule is a real earthquake since, according to PWC, one out of two listed companies would be affected, which would represent nearly 3000 billion euros of off-balance sheet commitments related to rental contracts.

The assets concerned are real estate assets, vehicles, plants, equipment and production tools. The consideration of these former off-balance sheet commitments is therefore a major issue and has already been the cause of bankruptcy. In 2011, the U.S. bookstore Borders had $2.8 billion in off-balance sheet commitments related to its store leases, which was seven times the amount of debt recorded on the balance sheet[1].

Explanation of IFRS 16 and impact on the financial statements

For lessors, the distinction in IAS 17 between finance leases and operating leases is maintained and their recognition substantially unchanged.

IFRS 16 is a major change for lessees (tenants). Previously, rents related to operating leases were recorded off-balance sheet and impacted the income statement through rent charges and the balance sheet on cash.

From now on, tenants will recognize most leases directly on the balance sheet using the finance lease accounting model (also known as leasing or capital lease). Only rentals of less than 12 months and properties of low unit value (less than 5000 euros) may be exempted. Thus, a lease is finally considered as an asset purchase contract with a finite life generating a debt to purchase it.

What are the impacts of this change on the lessees’ financial statements?

  1. Balance sheet
    For the balance sheet, payments due under operating leases (currently recorded as off-balance sheet commitments) will be recorded directly in the balance sheet at their discounted value in the form of financial debt.

    In return, the lessee will recognise as an asset a right to use the asset corresponding to the financial debt related to the lease of the asset plus any pre-contract payment and/or costs related to the dismantling and restoration of the asset. The asset in question will be amortized on a straight-line basis and the debt will be reduced by the payments of the due dates provided for in the contract.

    According to Pierre Phan Van Phi, partner at EY, “About 85% of the lease contracts will now appear on the balance sheet in the form of this debt and asset,…, and can reach up to 20% of the balance sheet total depending on the sector”[2]. We can already see the obvious impacts on debt ratios, asset efficiencies and capital employed ratios as well as the implications this may have on the income statement.

    Income statement

  2. The main consequence of IFRS 16 is to change the nature of the expenses and their recognition rate. Old rent charges, corresponding more or less to the cash payment of rents to the lessor, become depreciation charges (related to the recognition of a new asset on the balance sheet) and financial interest charges (related to the increase in financial debt).

    Thus, the EBITDA margin (earnings before interest, tax, depreciation & amortization) finally becomes the EBITDAR margin (R for rent). The elimination of rent charges therefore mechanically inflates the EBITDA margin.

    Amortization expenses will be increased by the amortization of the right of use, which should remain stable for the entire life of the contract unless it is renegotiated.

    The EBIT margin is also artificially increased since it is no longer reduced by full rental expenses but only by the depreciation part. As the financial charges come later, they increase substantially at the beginning of the contract but will decrease as the rents are paid.

    Finally, the impact on profits, the bottom line, will not be equal depending on the company’s profile. Indeed, growth companies, which significantly increase their number of leases, will see their profits reduced in the short term while mature companies, which see their number of contracts decrease or mature, will see their profits increase.

    Cash flow statement
    Finally, the impact on cash flows is simple to understand. Operating cash flows will increase due to higher EBITDA or depreciation charges, while cash flows will be reduced by the additional interest expense.

    Impact of IFRS 16 on financial analysis and valuation ratios

    IFRS 16 has no direct “cash” impact, the amounts paid to the lessor remain intact. The study of the consequences on the three financial statements has already shown that EBITDA and EBIT margins are artificially increased. But what about the other ratios and aggregates?

    First of all, it is clear that the debt of the companies concerned is likely to increase significantly. Thus, the liquidity and leverage ratios (Gearing, net debt/EBITDA) will deteriorate sharply in the first years of the contract and then begin a phase of improvement throughout its life cycle thanks to the gradual reduction of the debt linked to the payment of rents.

    The question here is whether this increase does not jeopardize the company’s financial stability and solvency in the early years of the lease agreements. This significant increase in debt could, for example, lead companies to postpone certain investments or rethink their capital allocation policies. In addition, the interest expense coverage ratio is also expected to deteriorate in the early years of the contract, but less significantly as the EBIT margin will also increase.

    On the operational efficiency ratios, several impacts can be observed. The turnover ratio of assets measuring revenue per euro of assets used will deteriorate due to the increase in assets related to the right of use recognised.

Similarly, ROCE (return on capital employed), which measures the effectiveness of capital allocation, will be degraded in the early years of lease contracts given the disproportionate increase in capital employed compared to the increase in EBIT. Thus, these newly restated ratios will more accurately show the efficiency of companies that use leasing on a massive scale.

In terms of valuation, the EV (enterprise value) will increase according to the debt generated by the leases. Thus the EV/CA of companies using rental will be clearly assessed. As far as the EV/EBITDA ratio is concerned, the situation is much less clear. This ratio will depend on the rent/EBITDA ratio and the rental period. To illustrate this point, here are two extreme cases:

The company has a high Rent to EBITDA ratio and a short contract term. EBITDA will increase significantly, EV will increase slightly so the EV/EBITDA ratio will be reduced
The company has a low Rent to EBITDA ratio and a long contract term. EBITDA will grow slightly. The EV will increase significantly. Thus the EV/EBITDA ratio will increase
With regard to the PER, the impact of IFRS 16 is relatively small. However, this ratio will depend on the company’s situation. In the case of mature companies, the PER will be slightly lower due to the partial increase in profits as indicated above.

Industries impacted by IFRS 16 and potential operational implications

It goes without saying that the areas to look at carefully are those where renting is a common and important practice. The food and non-food retail sectors will crystallize the interest of the financial community.

But these are not the only sectors. The aeronautics sector (in particular airlines), the transport sector in general, the hotel industry and the retirement homes sector will be strongly affected by this transformation.

Thus, there is a significant derating risk for players in its industries with low margins, long leases and balance sheets that are already “raised”. This does not suit an actor such as Steinhoff who is already caught up in an accounting scandal and full of debt.

The possible operational implications are multiple. Today the advantage of leasing is that the asset is fully available for the company’s business but remains mostly off balance sheet. This advantage disappears completely with IFRS 16. In order to reduce their financial leverage, some players will be forced to sell assets.

One can imagine, for example, in the supermarket distribution sector, a movement of store sales. But other players with controlled leverage could take advantage of this to buy back assets. The same applies to hotels and retirement homes. This impact could be acceptable to commercial real estate developers hurt by the rise in interest rates.

impact ifrs 16 sur les états financiers
Young businessman l

As far as the duration of the contracts is concerned, it is highly likely that a renegotiation of the rental contracts will take place. Longer-term contracts will generate greater debt and therefore higher financial charges at the beginning of the contracts.

The variance in the impact of long-term contracts will be greater on the income statements. Thus, contracts will probably be shorter in order to limit the size of financial charges. Companies will probably also renegotiate their borrowing terms with their bank to ensure that their covenant is not breached.

However, not everything is lost for companies. One way to circumvent the impact of this standard is to transform certain leases into service contracts that are still off-balance sheet commitments.

Thus, even if this new IASB standard has no cash impact, it is synonymous with upheaval for several industries. This big bang balance sheet will have to be analysed with the greatest attention and the leverage of companies will once again be at the heart of the debates, especially in retail, transport, aeronautics, hotels and retirement homes.

1] Pichelot.N (2017), “IFRS 16 standard: when USD 2,800 billion of leases are recognised in the balance sheet” Les Echos 13/07/2017

2] EY (2017), “IFRS 16, How to prepare for its application? ” (online), EY

Ayouba KELIMAAyouba KELIMAMarch 19, 2018

  1. major producing countries and production levels

Sugar is produced from sugar cane or beet. A distinction is made between brown sugar (Free On Bord side on the New York market) and white sugar (Free On Bord side on the London market). There are more than 130 sugar producing countries in the world. However, 10 countries account for about 78% of world production, including Brazil (23%), India (15%), EU-28 (9%), China (6%), Thailand (6%), the United States (5%), Mexico (4%), Russia (4%), Pakistan (3%) and Australia (3%).


>The specifications for sugar listed in London are:

  • Contract size: 50 tonnes
  • Quotation price: dollar and cent per tonne
  • Quotation deadline March (H), May (K), August (Q), October (V), December (Z),


>The specifications of sugar listed in New York

  • Tcontract size: 112,000 pounds (1 pound =0.453592kg)
  • Quotation price: us dollar per pound
  • Quotation deadline March (H), May (K), July (N), October (V)


The price of sugar is influenced by certain fundamentals, in particular the evolution of stocks, production forecasts, climatic conditions and any other geopolitical events that may disrupt the supply chain, in this case armed conflicts, strikes, etc.

In 2017, the price of brown sugar fell sharply (-11%). The abolition of production quotas imposed by the European Union on 1er October 2017 has not been conducive to improving things. It has led to a massive arrival of sugar on the international market. The latter is already saturated by a sharp increase in world production, whether in Brazil, Asia or India, and the decline in agrofuels made from sugarcane.



<However, analysts continue to monitor the price of ethanol, which is a very important driver of sugar prices. Brazil is a major producer of ethanol from sugar, traders will look closely at the break point between the price of ethanol and the price of sugar. Any impact in Brazil is highly significant on the world sugar market.


  1. b) Analysis of USDA bi-annual report



The production of ethanol from sugar cane in Brazil is a factor to be integrated into fundamental analysis. But the share of Brazilian production devoted to ethanol production is low, averaging 0.35 million tonnes over the last three years. The influence of this data on prices is small in a context where the expected level of production is high.

c- Technical analysis of the future sugar market quoted in London (Daily chart)

From the point of view of technical analysis, all moving averages (20, 50 and 100) are on a downward trend. There has been a downward trend since May 2017. This trend is in line with the analysis of the fundamental data related to production forecasts, which were based on lower consumption and higher production. However, there was a price change between November 2017 and January 2018 in a channel characterized by the range phase formed by price levels between $399.30 and $350.90. The next publications, particularly those to be published in May 2018, will provide a more precise market orientation by the end of the year.


Williams TEPINHIWilliams TEPINHIMarch 14, 2018


Oil is the main source of energy in modern society. It is also a source of war and pollution and our dependence on black gold divides public opinion. The use of oil is very different: indeed, the more developed a country is, the more the use of oil is dedicated to transport. In addition, the oil shocks of the XXème siècle allowed leaders of developed countries to understand that oil should be better used where it is not possible to replace it. Oil is used everywhere. It is the foundation of consumer society. Its cost was very cheap for a fossil commodity until recently, it is present in our economy as an essential, almost irreplaceable product. It is both a source of energy and a highly prized raw material. We begin to be aware of it when its price increases, because its impact is felt in our movements, our food, our comfort, our tranquility.

>Production, consumption and reserve of oil

World oil consumption is growing rapidly. It increased by 11% between 1970 and 2000, and it is estimated that it will increase by a further 30 to 40% by 2030. This is the result of a combination of several factors:

A GALOPPING DEMOGRAPHY: the world population will increase to 9 billion between 2020 and 2050. Even if the countries with the highest population growth are not the most industrialized, this population growth will have an impact on global oil consumption.

THE EMERGENCE OF NEW INDUSTRIALIZED COUNTRIES: Some countries, such as China and India, which together represent about a quarter of the world’s population, are in full economic development. Their expansion generates high oil consumption. By 2030, it is estimated that oil consumption in these emerging countries will account for 50% of world consumption

EXPANSION OF THE TRANSPORT SECTOR: 97% of transport depends on petroleum products. The globalisation of the economy and trade implies a significant development of the transport sector. It is estimated that transport currently accounts for 50% of oil consumption; this proportion is expected to rise to 60% by 2030. In other words, oil consumption for the transport sector alone is expected to increase by about 35% by 2030


There are few alternatives comparable to oil. Those with the greatest potential will only be able to replace oil if there is a willingness or a need to break with oil-based traditions. This is why agrofuels are widely supported by oil companies: they allow them to maintain control over distribution networks, and from a use point of view, agrofuels represent only a technological evolution. They do not change consumer behaviour, and that is what interests those who master distribution networks.

We could mention hydrogen, in the same kind of problem of distribution networks (and production, because hydrogen is an energy carrier, just like electricity, and not a energy source).
Solutions for the production and use of decentralised energy sources, while they may be a viable alternative, are not preferred because they imply a change of habit for suppliers and consumers. If technology could offer us a new source of clean energy compatible with current uses and distribution methods today or in the near future, it would undoubtedly become the norm. But such energy sources do not exist: those that present themselves as such are only lures boasting biased qualities. It is generally “sufficient” to analyse their sectors as a whole in order to become aware of the aberrations they constitute, or the conditions under which they could really constitute (even partially) a credible alternative (and to become aware that these conditions are not respected)


When an economy is largely based on oil exports, it is certain that GDP (Gross Domestic Product) will increase or decrease according to the rise or fall in oil prices. After being stable for more than three years, around $110 oil began to fall in June 2014, reaching about $50 a barrel in December. Since the beginning of 2015, the tremors have been severe, the price is now around 60 dollars, such a variation has particularly serious consequences for the countries producing black gold.

Let us take the case of Venezuela the dependence on oil is extreme, oil represents 95% of exports and constitutes two thirds of the State’s revenues. The inexorable fall in oil prices had considerably reduced Venezuelan monetary receipts and dealt a terrible blow to imports, leading to the shortage of many essential products. All these factors have led to an uncontrolled rate of inflation, to the point that the Central Bank of Venezuela refuses to provide this year’s figures on price increases.


The geopolitics of oil describes the impact of oil demand and supply on the policies of countries that consume and produce this essential raw material for today’s economic lifestyle. As the oil deposits are limited and their geographical location does not generally coincide with that of the consuming countries, oil resource exploitation is a source of tension. Consumer countries, generally with high power military, are then tempted to use powerful means of pressure (military or economic) to gain access to these resources. Oil, a highly strategic, has been frequently associated with international confrontations since the beginning of the xxe century.

In Iraq and Syria, the Islamic State of Caliph Ibrahim has seized vast oil fields and intends to exploit them as war booty.

For the peoples of this region, oil is not a manne but an evil that corrupts leaders and, instead of strengthening states, weakens them permanently. The Iraq war willed by Bush was first and foremost a war for control over the country’s oil resources, in order to prevent China from having access to oil fields essential for its development. It actually led to the destabilization of all the States in the Region.
In Palestine, the battle for water resources is raging. The State of Israel and the settlers suffocate Palestine by opening or closing the tap as they see fit.
In Africa, the Mali war is not – unlike the humanitarian storytelling we are told – a war without economic stakes. The proximity of Niger’s uranium sites, exploited by Areva, as well as the exploitable resources in North Mali, are at the heart of this conflict.


Fossil fuels are the main contributors to greenhouse gas emissions and therefore to the increase in temperature of the Earth’s surface that we have observed since the end of the 19th century.

In the major industrial countries, they provide most of the energy needed to manufacture consumer goods. That is to say their economic and strategic importance! The foreseeable decrease in their availability before the end of the century, first the oil, then natural gas, and finally coal, is worrying for the future of highly consuming countries.


Knowing that oil exploitation is a source of wealth and economic success,

But this energy is non-renewable and since its consumption continues to grow for growing needs, which could explain the increase in its production.

Oil discoveries are decreasing as they occur, even those found are in geographical areas where climatic conditions are extreme, requiring new drilling methods that are very advanced or even non-existent.

However, it is estimated that oil reserves have a finite consumption period, which already explains the presence of renewable energies, even if black gold remains irreplaceable.

Then a world without oil can put an end to our dependence on oil, which is present almost everywhere, this is our daily life. Oil companies will be or are even in the process of being confronted with this impasse, if the oil is over we will no longer be able to talk about oil companies because insurance companies do insurance, electricity companies produce electricity, and oil companies?

We must be courageous to say that they will disappear unless they diversify their activity beyond oil.

Several renewable energy companies are emerging and will multiply. The problem is that renewable energies are manufactured and their use depends only on climatic factors, such as the sun, wind etc.

Imagine a future where the means of transport have changed their operating configuration, no more turbojet engines with kerosene, no more propellant for rockets, the situation is getting more complicated. Will it be necessary to destroy any mechanical system working with black gold?

Then humanity will know a new phase, because depending on renewable energies would be eternal, and will change our habits

However, some countries whose economies depend on oil have begun to address the issue of energy alternation by directing their investment towards other activities in order to relay their economies. Profitability in oil production remains high, which is the cause of their economic boom. The question would be to know if they will then experience the same growth as they did during the black gold era?

Perhaps one thing could reassure us, since oil is often seen as the nerve of war and certain geopolitical tensions, and its absence could stabilize international relations.

Maya COUMESMaya COUMESMarch 8, 2018


The contractualization of derivatives

The International Swaps and Derivatives Association (ISDA) is a major player in the world of finance, bringing together the main players in OTC markets. Based in New York, ISDA aims to harmonize international contractual practices for derivative products by creating a standardized framework contract [1]in order to ensure the legal certainty of these transactions. British law is applicable to this agreement, but now seems to be in question since the announcement of Brexit in June 2016.

The application of British law to the ISDA framework contract

The application of British law is not surprising since the “common law”, a particularly flexible legal system based on custom and case law, differs very widely from the “civil law” applied mainly in Europe and in particular in France. The flexibility of the common law has been the driving force behind this system, which allows it to cover all types of financial transactions. The second factor that influenced the choice of English law is economic, so it is necessary to remember that London remains the world’s leading financial centre before New York even after the vote in favour of Brexit[2]. This predominance of the common law is confirmed by the recognition of English court decisions in the Member States under European law. However, the release of the UK in Europe seems to be redistributing the cards.

The questioning of the English law applicable following Brexit

The ISDA master agreement governed by British law provides that the English courts have jurisdiction to settle a dispute relating to the contractual clauses stipulated. Once the UK has left the European Union, it will be considered a third country[3], which implies that a counterparty established in a Member State of the European Union who wishes to have a court decision taken by an English court recognised by its domestic law must be subject to an exequatur procedure. Exequatur is a procedure making a judicial decision or arbitral award made abroad [4] enforceable on French territory. The provisions applicable to the exequatur procedure vary according to the country of origin of the decision invoked. Thus, it can be seen that this new requirement resulting from the UK’s exit from the European Union neutralizes the flexibility of the “common law” appreciated until now by ISDA. The association therefore raises the question of choosing to apply French law to the ISDA framework contract.

Alternatives under study by ISDA

Working groups on this issue have already been created by ISDA to assess the issues and changes to be expected following the approach to the implementation of Brexit[5]. French and Irish law are listed for the amendment of the applicable law of ISDA contracts. Similarly, the creation of a Court representing 27 Member States with jurisdiction over disputes relating to ISDA framework contracts governed by British law. This would facilitate the enforcement of court decisions taken on the basis of a contractual breach of an ISDA framework contract.
[1] ISDA Master Agreement

[2] “Financial centre : London in the lead, Frankfurt jumps,” Guillaume Benoit, les Echos, 11/09/2017

[3] Not a member of the European Union

[4] Terence Richoux, Court Counsel


Benjamin CHOUKROUNBenjamin CHOUKROUNMarch 6, 2018


It is likely that you are already familiar with Bitcoin, the number one cryptocurrency in full expansion in 2016 and 2017, but it should be noted that there are several other virtual currencies whose main characteristics are not to have a tangible form, and especially not to respond to a single body but rather to a borderless control protocol, in theory accessible from any computer.

Among the most frequently cited are Ether (ETH) and Ripple (abbreviation: XRP). While the former is also an electronic currency distributed under a free licence, the latter, in addition to serving as a currency of exchange, also boasts of accelerating international transactions by working in parallel with the traditional banking system, a system that appears to be cheaper, faster and without risk.

California-based start-up Ripple, founded in 2004, uses a transaction protocol called blockchain, based on its own cryptographic currency that allows it to offer services such as currency or raw material exchange and real-time funds transfer. Compared to Bitcoin, which focuses more exclusively on the currency aspect by encouraging minors to provide more and more computer power to the network, Ripple is first and foremost a transactional network that uses its cryptocurrency to accelerate exchanges (a few seconds for a transaction between Spain and Mexico, compared to four days for traditional banking institutions and a few hours for Bitcoin).

And banks and governments are scrambling to take advantage of the system. The National Bank of Abu Dhabi, for example, uses Ripple to provide its clients with fast and cost-effective cross-border transactions. This will arouse the curiosity of online traders who don’t want to miss the boat: after all, if Bitcoin, Ripple’s ancestor and competitor, continues its rapid rise on the markets, the additional advantages offered by the second can only stimulate reliable and rapid growth.

So, since there are no minors, how do we trade Ripple? According to rules established by Ripple, one billion XRPs are traded each month and if the value of the currency fluctuates, the future could be bright for those who have thought about investing their dollars or euros in a few XRPs.

There has long been doubt about the cryptographic currencies that were appearing on the markets, and the slightest decline in value is accompanied by a slight panic effect among investors, a reaction that is understandable since the technologies used by these networks are so new and high-tech that it is difficult to predict their future movements.
Yet Ripple’s recent alliance with MoneyGram and the deployment of the system by 11 of the world’s 100 largest banks can only contribute to a promising future for XRP, and it will take more than occasional market doubts to stop it.



Can the Ripple dethrone Bitcoin? Forbes France, 2018.

Ripple’s XRP is the biggest loser of the cryptocurrency bloodbath Business Insiders, 2017.



Whether it is the major audit firms or investment banks or the most well-known financial markets, it would seem that they are all on the same wavelength: this year 2018 has an unprecedented number of deals and seems to be continuing on the same trajectory.

Surprisingly, as globalization has become more and more prevalent over the years, it appears after consulting the various opinions of the largest M&A and Private Equity (PE) institutions that the biggest deals will always take place in the most developed economies and not in emerging countries (excluding China).

Despite a pleasing start to the year for the announced M&A operations, which for the first half of 2018 represent $2500 billion1, up from $2300 billion in 2007, it must be noted that the various events in Europe or the United States and China – trade war, attack & rescue of Italia Telefonica by activist funds, delayed increase in interest rates between the FED and the ECB, the impact of a possible Brexit that is taking a long time to take shape, etc. – are all factors that have an impact on the success of the M&A operations. – raise some doubts about the strength of financial markets in the medium term.

That being said, the fall in markets in February was presented by experts as a correction related to the upward trend of 2017. This correction has made it possible to recover the volatility lost on the markets and we can now see that it has been filled without being able to make any significant increase. The stagnation of market prices reflects the atmosphere of uncertainty in which investors find themselves, given the events mentioned in the previous paragraph.

Private Equity still profitable….
Macro events have not yet affected the Private Equity (PE) market in the first quarter of 2018, it seems, since EY is seeing an increase in deal closings worldwide in the first quarter of 2018 compared to the first quarter of 2017.

financial markets

Source: EY Q1 2018 PE report

This good performance can be attributed to last year’s exceptional capital raising, where PE funds attracted more than $640 billion, which required the capital raised to be used. However, the first figures for the second quarter seem less promising for Europe with a general decline in deal closures over the same period attributed to the political instability faced by some countries, such as England and Italy.

Notwithstanding this mixed view and given the uncertainties in the financial markets, more and more analysts are recommending that the equity portfolio be reduced to switch to alternative management where certain types of hedge funds perform better than traditional funds in a bearish market.

These recommendations are supported by the EY study which reveals that 55% of existing private equity funds will this year seek to create a new fund with, for 60% of them, the certainty that this fund will raise more capital than the current funds.

If current macro instabilities persist or even worsen, then the recession feared by some economists may come true, which will most certainly lead to a disinvestment of some of the capital invested in financial markets into private markets.

And ever-larger M&A deals….
According to Bain & Capital but also JP Morgan & Chase, the most prominent M&A sectors today are in the healthcare (Pharmaceuticals & Healthcare), technology (Technology, Media&Telecommunication) and consumer (Consumer & Retail) sectors.

This trend in the above-mentioned sectors is reflected in the activities of large groups that are now increasingly aggressive in their acquisition policies, such as Philips through its Accelerate plan to acquire various companies mainly in the health sector, just as General Electrics is divesting2 the sphere of railway equipment and lighting manufacturing to also focus on the health sector.

Beyond these companies, we are seeing the emergence of increasingly important mega-deals such as the acquisition of Shire by Takeda for nearly $77 billion, the acquisition of Script Holdings by Cigna for $68 billion or the battle between Comcast and Disney to acquire 21st Century Fox, which is currently rising, given the latest offer made by Disney, to $80 billion.

This type of operation is likely to intensify even more since the judgment handed down in the United States last June on the United States vs. AT&T case, where the judge considered that AT&T’s acquisition of Warner Time did not constitute a violation of anti-trust rules.

Cash-rich groups that are reluctant to launch large-scale M&A transactions at the risk of being pinned by the Department of Justice (DoJ) or the Securities Exchange Commission (SEC) will certainly move to the left, supported even more by very particular shareholders referred to in JP Morgan&Chase’s report: activists.

This echoes Deloitte’s report on the issue of M&A deals, which reports that 65% of the companies surveyed by their study want to use their cash to undertake M&A transactions compared to 58% the previous year. This study shows that corporates will tend to rely more on external growth than organic growth to create growth.

The year 2018 looks promising both in terms of the number of M&A deals and their importance, but also in terms of PE deals, despite somewhat battered financial markets.

Several things seem to be emerging: first of all, the disappointing performance of equity markets influenced by macro elements which, if the trend continues in this direction, will see the capital of financial markets move towards private markets, on which PE funds, and more broadly hedge funds, operate.

Secondly, the trend seems to be converging towards a clear desire to acquire already mature companies, which have significant multiples and no longer mainly start-ups as could have been done in the past – with a few exceptions, such as the Fintech sector. The reasons for this are linked to a more uncertain economic climate, which does not favour risk-taking, high availability and regionalisation of deals.

Indeed, intercontinental deals seem, in general, to be slowing down and one may wonder whether there is not a desire for protectionism in view of the current international political climate.

As a result, if the deals are large, then it is likely that the synergy effects will be greater and particular attention will be paid to the quality of due diligence to best estimate the potential goodwill to be paid.

Overall, the M&A and PE sectors seem to have a bright future ahead of them despite an economic situation that remains tense and a market in full transformation.


AGEFI HEBDO N°621 du 5 juillet 2018, p.26-27

The Economist, p.58, November 18TH-24TH 2017 issue (General Electrics)

1 AGEFI Hebdo n°621 du 5 juillet 2018, p.26

2 A hauteur de $20 milliards d’ici 2020

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