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The persistence of zombie firms in a low yield world

1. März 2018
In the fourth part of our series on the impact of rising yields, we discuss the rising incidence of zombie firms in recent years. Bottom-up data of some 3,000 companies in the FTSE All World index show that the percentage of zombie firms has more than tripled to 2.0% of firms in 2016 from 0.6% in 1996. Such firms are defined as those with an interest coverage ratio under 1x for 2 consecutive years and a price to sales ratio under 3x. That matters because zombie firms are linked to fading business dynamism and because years of low interest rates should have led to fewer such firms, not more. There are early signs we are at a turning point, however. The numbers for 2017, with two-thirds of firms reporting, suggest that zombie firm incidence declined sharply last year. If this proves to be a real trend, it may give central banks confidence that continuing to raise rates and pull away from unconventional monetary policy will have some advantages. [mehr]

Weitere Dokumente zum Thema "International"

203 (49-60)
25. Juni 2019
For the first time ever the Fed is undertaking a thorough academic review of its policy strategy, tools, and communication practices. The reviewers are some 30 academic experts on monetary policy and macroeconomics. Listen to Peter Hooper, Global Head of Economic Research, discussing the background to the review, the low-rate monetary policy and what a downturn could mean for financial stability. [mehr]
27. Mai 2019
Die Fundamentaldaten für die Weltwirtschaft sind zwar nach wie vor günstig, aber das erneute Aufflammen des Handelskonflikts macht die Märkte nervös. Rücksetzer um rund 5% an den Aktienmärkten sind in einer durchschnittlichen Hausse-Phase normal. Falls sich jedoch die weltweite Handelsordnung – gefühlt oder tatsächlich – grundlegend und unerwartet änderte, würde die Marktkorrektur sicherlich deutlich stärker ausfallen. [mehr]
15. Mai 2019
Who pays when a tariff is imposed on an imported product? Formally, of course, it is the importer that is assessed the tariff. But if the exporter has lowered her price, the tariff-inclusive price may not be higher than the prevailing price before the tariff was introduced. [mehr]
8. Mai 2019
China's USD 12-trillion stock market is a vast and complicated panoply of different share types across a wide variety of markets, exchanges and share classes. With the rising role of A-shares amongst international emerging markets (EM) indices, understanding the market dynamics of China's equity markets will be increasingly critical, as Chinese equities are set to become an increasing proportion of the global opportunity set, driven by their increasing role in EM equities. Deutsche Bank’s research team looks at the distinguishing features of China's onshore and offshore markets. [mehr]
15. April 2019
Sowohl die Märkte als auch die Daten haben sich wie erwartet in den vergangenen Wochen erholt. Die Befürchtungen, die zu Jahresbeginn aufkamen, haben sich aber nicht vollständig verflüchtigt. Vorerst hat sich an den globalen Märkten ein neues Gleichgewicht eingestellt: In den meisten wichtigen Ländern läuft die Konjunktur weiter rund und die Aktienkurse steigen. [mehr]