Our International Valuation Newsletter series addresses current hot topics and upcoming themes. While some articles may focus on particular sectors or asset classes, all will have one thing in common: The provision of insights into the development and practical implementation of solutions to common challenges when valuing businesses and business assets. The newsletter is therefore of interest to those involved in valuations for transactions, financing, tax, accounting, restructuring and dispute resolutions, among other areas. It is also highly relevant to academics, lawyers and government or tax authorities.

In this edition we look at several international developments. The situation regarding the heightened tensions in the Middle East as military attacks by the US and Iran took place against each other on Iraqi soil remains unstable. Despite both countries showing signs of de-escalation there is a possibility of yet another war in the region.

Some progress was seen on another persistent uncertainty though, Brexit. The UK parliament finally approved the withdrawal bill that will see it leave the EU on 31 January 2020. Questions remain about the impact on people and the economy, however, which will largely depend on any trade agreements negotiated by the UK, especially with the EU.

Another saga – the trade dispute between China and the US – shows signals of abating. The two countries have agreed to sign a phase one agreement. This is one reason why many stock markets have risen over recent months. In January 2020, the Dow Jones even broke the 29.000 points line for the first time ever. Despite not holding on to this record, it shows investors’ confidence in the economy.

A stable economy is an important aspect for the topic of our focus article in this edition: the valuation of ships. Healthy economic conditions are important for shipping companies to grow and improve profitability, which can lead to higher valuations.

In addition, you can find an update on recent capital market data that are relevant to any valuation analysis. 

Here are the latest developments at a glance:

• Major stock market performances: All indices gained on a quarterly and yearly basis, with the NASDAQ outperforming all (+12.2% on a quarterly and +35.2% on a yearly basis)
• EURO STOXX 600 sector multiples: Valuation multiples of most sectors have risen over the past four quarters
• Current risk-free rates for major currencies: Interest rates rose in Q4 2019 for the first time since Q3 2018 for all areas except Switzerland

We hope you enjoy this newsletter and look forward to discussing with you any questions you might have regarding valuation trends and practices.

Read the full document here below.