Introduction: corporate finance versus project finance The usual way in which a company raises finance to run and grow its business is called corporate finance, where equity investors and debt lenders provide capital to the company as a whole. Most … Continued
Data centres are a new(ish) form of infrastructure investment that because of the sheer scale of AI-related investment are getting a lot of attention. Data centres are not new but what is somewhat new is that they are increasingly be … Continued
In this article we look at the different ways of financing infrastructure. The key point is that there is no single best way of investing in infrastructure, it can be done through the public or private sector and through a … Continued
* The weighted average cost of capital, or WACC, is used in valuing companies. A standard approach to valuing companies, often called the discounted cashflow or DCF method, is first,ย to estimate the cashflows that the company will generate in future, … Continued
This page brings together a number of posts that I call key financial concepts. Each is explained simply for non-experts, mostly without any diagrams or equations. They are intended to be helpful to students or anybody just curious about finance. … Continued
Bubbles are an enduring feature of financial and commodity markets. But it is when they are driven by debt that their bursting becomes dangerous * The best book I’ve read on financial bubbles is William Quinn and John D. Turner’s … Continued
Selling shovels instead of trying to find gold is an old piece of wisdom about booms and bubbles * It’s a clichรฉ about booms and bubbles that you can probably more dependably make money from selling shovels than actually finding … Continued
Latest data show that the US dollar remains the dominant trading currency globally, and is still the pre-eminent foreign reserve currency, though slowly losing ground, mainly to other developed country currencies. * Perhaps the question I have been asked most … Continued
Debt rating agencies have no particular expertise or special information on sovereign debt, especially for developed economies, so their views don’t matter * News that Fitch downgraded the US sovereign debt rating from AAA (the highest rating) to AA+ (the … Continued
A crumb of comfort during the 2008/09 financial crisis was the thought that we were living through historic times. But to face another historic event barely a decade later is perhaps a bit much. The financial – macro relationship The … Continued
Recent news that the EBRD (European Bank for Reconstruction and Development) is thinking of lending to Sub-Saharan Africa shows how institutions evolve to find new goals rather than quietly close down. The EBRD, which I believe enjoys a high reputation … Continued
We have had a long period of economic growth since the great recession of 2009, leading many market commentators to fear a recession is overdue. One fairly reliable indicator of coming recession is an inverted yield curve – meaning that … Continued
P2P (peer-to-peer) lending is the biggest and most developed form of alternative finance. But does it have any enduring value to add in the financial system? * P2P lending platforms have sprung up in many countries since the global financial crisis, … Continued
As we commemorate the 10th anniversary of the Lehman Brothers bankruptcy, which marked the point where the US financial system truly moved into crisis, it’s worth reviewing the innovations that led to the real estate bubble that lay behind Lehman’s … Continued
The high and rising level of Chinese corporate and local government debt has been a concern for several years. Recent data from the People’s Bank of China suggests the true figure may be much higher than we thought, but things … Continued