Report
Is the return on equities excessive (at the expense of employees or investment) or, on the contrary, insufficient (to attract savings to companies)?
We look at the situation in the euro zone and wonder what to think about the return on equities. We can actually hesitate between two analyses: The return on equities is too high, as shareholder remuneration captures too much of the value added at the expense of wages and investment; The return on equities is too low, on the contrary, given the risk associated with holding equities, and this causes investors to invest in risk-free assets instead of financing companies. An examination of developments since the 1990s leads to the conclusion that the second hypothesis (low return on equities, which explains why savings have moved into risk-free assets) is more appropriate than the first (excessive shareholder remuneration).
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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