ESCP Europe

Item type

Study and report

Dissertation

• MIM Master in Management Grande Ecole

Language

English

Publication year

2012

Note

• Annexes.

Regions

HONG-KONG

There is significant evidence that European equities are currently undervalued. The current state of crisis that plagues the global economy has caused the share price and market capitalization of a number of European companies to plummet while liquidity was greatly affected leaving most of them without reasonable access to public equity for their financing needs. Moreover, due to the heightened risk aversion and the flight-to-quality tendency of investors in bear markets, some companies see very little trading volumes on their stocks as well as little interest from analysts. These factors also contribute to driving the stock price downwards and widening the gap between the market value and the intrinsic value of the company.