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CUHK Business School Research Reveals Companies with Exceptionally Confident CEOs Performed Better in the Stock Market During the Pandemic

HONG KONG SAR – Media OutReach – 4 November 2021 – Overconfidence, or the tendency to underestimate risk and overestimate returns, is often cited as a leading factor behind some of the biggest corporate failures in history, from the Enron scandal at the turn of the millennium, to the spectacular collapses of investment banks Bear Sterns and Lehman Brothers during the global financial crisis of 2007 to 2008. With the world now in the grip of a new crisis brought about by the COVID-19 pandemic, a recent research study is challenging the stereotypical discourse on overconfident business leaders and suggests that a touch of conceit in CEOs may help to lead their companies through the storm.

An area that overconfident CEOs excelled at is withholding bad news and accentuating good news, according to the study. (Source: iStock)

 

The study CEO Overconfidence and the COVID-19 Pandemic was co-conducted by Maggie Hu, Assistant Professor of Real Estate and Finance at the School of Hotel and Tourism Management and the Department of Finance; Desmond Tsang, Associate Professor at the School of Hotel and Tourism Management at The Chinese University of Hong Kong (CUHK) Business School; and PhD candidate Wayne Wan Xinwei at the University of Cambridge. The researchers theorised that overconfident CEOs could be beneficial to their firms during unprecedented times of crisis, and the COVID-19 pandemic provided a perfect backdrop for them to test their theories. They found that companies with exceptionally confident CEOs performed better in the stock market during the COVID-19 pandemic.

 

“The COVID-19 pandemic has brought an unrivalled level of uncertainty to our world. It has also become a test for CEOs in whether they can keep their companies intact,” Prof. Tsang says. “We found that overconfident CEOs actually provided strong leadership and kept both their employees and investors positive during a crisis.”

 

Overconfidence and Abnormal Returns

Using data from the U.S., the research team looked at companies’ stock market performance from January 22, 2019, to March 23, 2020. Only companies with the same CEOs since 2018 were included in their sample to control for any possible haphazard performance of newly appointed CEOs.

 

The researchers measured the level of CEO overconfidence by investigating CEOs’ options holdings. As senior managers, CEOs typically are vested in their companies’ stock options which they can exercise anytime. A CEO is considered more confident by researchers if they are willing to wait for a later date to exercise their stock options, as it may mean the CEO is confident enough to seek a higher payoff somewhere down the line.

 

According to the results, companies with more self-assertive CEOs displayed significantly higher abnormal returns, defined as returns that are unexpectedly and unusually large, during the COVID-19 period compared with companies with CEOs that have relatively less confidence. Given that COVID-19 brings negative impact of 0.52 percentage point in terms of daily abnormal return and 1.57 percentage points in terms of three-day cumulative abnormal returns, the overconfident CEOs mitigate the negative impact of the COVID-19 by about 37% on abnormal returns, and 33.7% on cumulative abnormal returns over the period studied, respectively.

 

The researchers then looked at whether the positive effect of overconfident CEOs would differ among different firms, specifically those highly affected by the pandemic. They measured how much the sampled companies suffered from the COVID-19 pandemic. They looked at companies’ exposure to the pandemic by calculating the frequency of the COVID-19-related keywords used when the management discussed their results in their quarterly reports. They found that the positive effect of overconfident CEOs was even more pronounced in firms that suffered more from the pandemic.

 

“Super confident CEOs had a crucial role in mitigating negative market reaction due to the COVID-19 pandemic because their positivity helped them to manage investor perception,” Prof. Tsang says.

 

The ‘CEO Magic’

So how did self-assured CEOs successfully manage investor perception during the crisis? The researchers explain that while the market sentiment was generally pessimistic for all firms, super confident CEOs tended to be more effective in managing public perception, which then influenced investors’ perception of their firms. As a result, investors maintained a positive attitude towards the companies’ stocks. This ability to keep a positive image of the company was extremely important for companies that faced high uncertainty and lack of resources during the pandemic, according to the study.

 

Another area that overconfident CEOs excelled at is withholding bad news and accentuating good news, according to the study. While it’s an activity that may be deemed questionable by some, it turns out to be quite valuable during a crisis. According to the study results, overconfident CEOs indeed withheld more bad news, which resulted in less negative stock price reactions during the pandemic.

 

However, despite the marginal edge gained by companies who are helmed by overconfident CEOs during the pandemic, the researchers found that even a highly overconfident CEO would not be able to save companies with inherently higher risk or weaker foundations from going under. For firms with a high risk of failure and bankruptcy, rational investors simply would not be swayed by any amount of spin-doctoring conjured up by overconfident CEOs.

 

“Our study shows that extremely confident CEOs can make a difference for the survival of a firm during a crisis, but they are not all-powerful. If a company is fundamentally unsound, then no matter how confident the CEOs are, it’s going be hugely difficult for them to pull a rabbit out of the hat and save the day regardless of how much smoke and mirrors they employ,” Prof. Hu says.

 

All in all, the beneficial impact of conceited CEOs only worked for companies with more cash holdings, lower leverage, higher ROA (return on assets) and larger market capitalisation before the crisis. In addition, the study highlights that this positive effect only lasted during the crisis period. This impact was no longer notable in the post-crisis recovery period when companies started to bounce back following government interventions and aids.

 

The researchers believe the study has strong implications for companies searching for the right leader. “Companies should think twice before turning down any overconfident CEO candidate because they can be highly beneficial in curbing stock price crashes at crisis times,” says Prof. Hu. “But they should also bear in mind that when the storm is over, then the magic of overconfident CEOs could vanish immediately.”

 

Reference:

Hu, Maggie and Tsang, Desmond and Wan, Wayne Xinwei, CEO Overconfidence and the COVID-19 Pandemic (November 22, 2020). Available at SSRN: https://ssrn.com/abstract=3716618 or http://dx.doi.org/10.2139/ssrn.3716618

 

This article was first published in the China Business Knowledge (CBK) website by CUHK Business School: https://bit.ly/3BDcmnE.

 

About CUHK Business School

CUHK Business School comprises two schools – Accountancy and Hotel and Tourism Management – and four departments – Decision Sciences and Managerial Economics, Finance, Management and Marketing. Established in Hong Kong in 1963, it is the first business school to offer BBA, MBA and Executive MBA programmes in the region. Today, CUHK Business School offers 9 undergraduate programmes and 18 graduate programmes including MBA, EMBA, Master, MSc, MPhil and Ph.D. The School currently has more than 4,500 undergraduate and postgraduate students from 20+ countries/regions.

In the Financial Times Executive MBA ranking 2021, CUHK EMBA is ranked 19th in the world. In FT‘s 2021 Global MBA Ranking, CUHK MBA is ranked 48th. CUHK Business School has the largest number of business alumni (40,000+) among universities/business schools in Hong Kong – many of whom are key business leaders.

More information is available at http://www.bschool.cuhk.edu.hk or by connecting with CUHK Business School on:

Facebook: www.facebook.com/cuhkbschool

Instagram: www.instagram.com/cuhkbusinessschool

LinkedIn: www.linkedin.com/school/cuhkbusinessschool

WeChat: CUHKBusinessSchool

#CUHKBusinessSchool

Symphony showcases front office, operations, and wealth workflows at Innovate 2021

New York and London – News Direct – 4 November 2021 –

Symphony – the leading markets’ technology and infrastructure platform – showcased front office, operations, and wealth workflows that are solving for markets industry challenges in its flagship conference Innovate 2021, held yesterday in New York City.

Symphony showcased for the first time how its secure and compliant collaboration platform is integrating the technology of the two companies it acquired earlier this year: StreetLinx’s counterparty mapping platform and Cloud9’s markets voice and electronic communication platform into one powerful inter-firm workflow.

Symphony CEO Brad Levy said: “Harnessing networks and connecting with purpose has never been more important. This year’s Innovate gave us the opportunity to highlight how we can help bridge this gap across workflows and client segments, bringing finance and tech together for the benefit of users, clients and counterparties.”

The hundreds of financial professionals that joined the day’s sessions in person and online learned about the innovation and digital transformation taking place across markets directly from Symphony partners, customers, developers and innovators. Innovate 2021’s highlights included discussion panels with industry leaders and live demonstrations of Symphony’s platform and partnerships.

Chief product officer Michael Lynch added: “We were thrilled to showcase such a diverse set of innovations, all meant to help our customers be more connected and efficient—moving beyond legacy disparate systems into a holistic ecosystem of interoperability and collaboration.”

Videos from all the sessions will be posted on innnovate.symphony.com.

About Symphony Symphony is the most secure and compliant markets’ infrastructure and technology platform, where solutions are built or integrated to standardize, automate and innovate financial services workflows. It is a vibrant community of over half a million financial professionals with a trusted directory and serves over 1000 institutions. Symphony is powering over 2,000 community built applications and bots. For more information, visit www.symphony.com.

Contact Details

Symphony Communication Services

Odette Maher

+44 7747 420807

odette.maher@symphony.com

Company Website

https://symphony.com/

View source version on newsdirect.com: https://newsdirect.com/news/symphony-showcases-front-office-operations-and-wealth-workflows-at-innovate-2021-442870921

Authorities in Laos Destroy 4.2 Hectare Marijuana Farm

Marijuana plantation destroyed in Bolikhamxay Province, Laos
Authorities destroy a marijuana plantation in Bolikhamxay Province, Laos (Photo: KPL)


Authorities have destroyed a large marijuana plantation over four hectares in size in  Bolikhamxay Province.

Cyberport Venture Capital Forum 2021 concludes drawing 110,000 views

Premier venture capital event attracts 2,500+ online and offline participants and facilitates 300+ deal flow

HONG KONG SAR – Media OutReach – 3 November 2021 – Cyberport’s premier annual venture capital event, the Cyberport Venture Capital Forum (CVCF), ended on a high note today. Presented for the first time in a brand-new hybrid format of online and offline engagement, the two-day CVCF main forum gathered a host of global venture capital experts, investors, innovation and technology enterprises and Cyberport start-ups. Together with the spotlight events, including Cyberport FinTech InnoCon 2021, Edventures Global Business Acceleration Summit and the world-renowned venture event Silicon Dragon Online 2021 held during CVCF, the affair attracted more than 2,500 participants. Since its launch on 20 October, CVCF’s interactive online platform has recorded a total of around 110,000 page views.

 

The one-on-one meetings arranged by CVCF for investors and start-ups received all-round enthusiastic feedback. More than 300 meetings were arranged to facilitate deal flow.

 

Dr. George Lam, Chairman of Cyberport, said, “With the successful conclusion of this year’s CVCF, I would like to thank the over 100 distinguished speakers for sharing their insights and practical tactics with no reservation. I believe the participating investors and start-ups have gained a much deeper comprehension of the future developments of venture capital and the dynamics of the fundraising marketplace. I am also pleased to see investors and start-ups being enabled to exchange and explore future opportunities for win-win collaboration, with a sizable number of fundraising matching meetings successfully held at the event. Cyberport will continue to promote and facilitate the connection of start-ups with investors in hopes to expand their business network and turn the fruits of their innovations into business opportunities.”

 

The start-up workshop held on the second morning of the main forum assembled professional investors to share with start-ups their practical skills on topics such as positioning in an ever-changing environment, strategies for retaining talents, getting the best out of your angel investors and mentors, and intellectual property strategies in the digital age.

 

Among the spotlight events this year was the Edventures Global Business Acceleration Summit (Edventures GBA Summit), organised jointly by Cyberport and Esperanza. Founder of Esperanza John Tsang commented, “Themed ‘Think Big with EdTech, From Quick Fix to Driver of Change’, the Edventures GBA Summit this year explored how education technology (EdTech) has transformed from an auxiliary tool for remote learning during the COVID pandemic into an innovative instrument that drives learning in the 21st century.”

 

EdTech experts from mainland China, United States, Finland, Israel and Hong Kong deliberated on a huge variety of topics. These included the trends, development and opportunities of the global application of EdTech, how to cross the digital divide chasm, the transformation of new models of workforce development in the digital age, different funding models for EdTech ventures, validating efficacy and learning outcomes, and fostering cross-sector and cross-border partnerships. The topic on developing Hong Kong as an education innovation hub in the Greater Bay Area was also discussed, with a report on this fascinating area to be published by Esperanza in the first quarter of 2022.

 

Peter Yan, Chief Executive Officer of Cyberport said, “The pandemic has accelerated digital transformation within society, driving the development of EdTech and its adoption by the general public. These developments have prompted us to reimagine our models of education and talent cultivation in the 21st century. Cyberport’s EdTech community continues to grow and now consists of more than 140 EdTech start-ups who are thriving under the various support programs provided by Cyberport. I am keen to see more talented entrepreneurs join Cyberport in the future to inject new impetus into the Hong Kong growing EdTech ecosystem.”

 

Another highlight of CVCF was the final presentation of the “Edventures Global Business Acceleration Fellowship” in which 12 promising EdTech start-ups from Israel, Canada, India, Sweden, the United Kingdom, the United States and Hong Kong presented their innovative solutions for early childhood education and special education, K12 learning programmes, higher education, career development, and lifelong learning. The Global EdTech Startups Awards (GES Award) China Final was also held during CVCF, with four of the six finalists coming from the Cyberport community. They were AESIR, Find Solution AI, Connect AR and Big Bang Academy. Find Solution AI won the China Final and will enter the global contest on behalf of the China region, while Big Bang Academy was the first runner up.

 

To provide start-ups with an all-round platform to explore venture opportunities, more than 100 online booths will be featured until mid-November as part of CVCF and its series of spotlight events. Through this platform, start-ups can showcase their innovative technology solutions, participate in investor matching and put forward project pitches.

 

More information about the contents and speaker line-up of Cyberport Venture Capital

Forum 2021 is available at:

http://cvcf.cyberport.hk/

Click here to download high resolution photos.

1.    Cyberport Venture Capital Forum 2021 recorded X views in total. The event received more than 2,500 participants online and offline. Since its grand opening on 20 October, CVCF’s interactive online platform has recorded a total of around 110,000 page views.

 

2.    Dr. George Lam, Chairman of Cyberport, thanks the over 100 distinguished speakers for sharing their insights and practical tactics with no reservation, allowing participating investors and start-ups to gain a much deeper comprehension of the future developments of venture capital and the dynamics of the fundraising marketplace.

 

3.    The one-on-one meetings arranged by CVCF for investors and start-ups received all-round enthusiastic feedback. More than 300 meetings were arranged to facilitate deal flow.

 

4.    Industry experts shared their new trends, development and opportunities at the Edventures GBA Summit. Founder of Esperanza John Tsang (left) and Dr. George Lam, Chairman of Cyberport (middle) held a dialogue with young moderator Ryan to kick-off the summit.

 

5.    Peter Yan, Chief Executive Officer of Cyberport introduces Cyberport’s EdTech community which now consists of more than 140 EdTech start-ups who are thriving under the various support programs provided by Cyberport.

 

6.    The Global EdTech Startups Awards (GES Award) China Final was also held during the summit. Cyberport start-up, Find Solution AI won the China Final and will enter the global contest on behalf of the China region, while Big Bang Academy was the first runner up.

 

Viola Lam, CEO and Co-founder of Find Solution AI (left) and Peter Yan, Chief Executive Officer of Cyberport (right)

 

7.    Presented for the first time in a brand-new hybrid format of online and offline engagement, more than 100 online booths will be featured until mid-November as part of the Cyberport Venture Capital Forum and its series of spotlight events to provide start-ups with an all-round platform to explore venture opportunities. Through this platform, start-ups can showcase their innovative technology solutions, participate in investor matching and put forward project pitches.

 

More information about the contents and speaker line-up of Cyberport Venture Capital Forum 2021 is available at: http://cvcf.cyberport.hk/

About Cyberport

Cyberport is an innovative digital community with around 800 on-site start-ups and technology companies. It is managed by Hong Kong Cyberport Management Company Limited, which is wholly owned by the Hong Kong SAR Government. With a vision to be the hub for digital technology, thereby creating a new economic driver for Hong Kong, Cyberport is committed to nurturing a vibrant tech ecosystem by cultivating talent, promoting entrepreneurship among youth, supporting start-ups on their growth journey, fostering industry development by promoting strategic collaboration with local and international partners, and integrating new and traditional economies by accelerating digital transformation in the public and private sectors.

For more information, please visit www.cyberport.hk

#Cyberport

Justin Sun Makes Another Lavish Investment in TRON Ecosystem

SINGAPORE – Media OutReach – 3 November 2021 – TRON founder Justin Sun recently tweeted about his plan to establish a $1,111,111,111 (roughly $1.1 billion) fund to power the growth of the TRON ecosystem and provide developers with more efficient and affordable developing tools. Meanwhile, it can also allow the protocols in the network to yield more returns while giving users access to transactions at the lowest costs.

 

Justin Sun, the founder of TRON, has long been seen as the bellwether of the crypto industry and has navigated TRON to lead the races in DeFi, DApp, stablecoins, and distributed storage, among others. This year, Justin and his TRON went a step further to enter the NFT market. After clinching Beeple’s “OCEAN FRONT” with $6 million, Justin Sun then won the bids for “Femme nue couchée au collier (Marie-Thérèse)” by Pablo Picasso at $20 million and “Three Self-Portraits” by American artist Andy Warhol at $2 million. Later, he purchased the NFT of Time magazine’s first computer-themed cover, a whole set of NFT artworks named “Cube” by the renowned artist Pak, ROCK ID 87 of the EtherRock series, and avatar Tpunk #3442. He donated most of the artworks, which are worth over ¥300 million, to APENFT Foundation.

 

Besides launching the first NFT standard TRC-721 this March, TRON has improved the world’s largest distributed storage system BTFS, providing a comprehensive and efficient infrastructure to transform artworks into NFTs on the blockchain. TRON is also proactively making inroads into GameFi and NFTFi: “WIN NFT HORSE”, a horse-racing game jointly launched by APENFT Foundation and WinkLink, is going to launch its IGO on Binance NFT.

 

TRON has been on a fast track of development since its inception and has grown into one of the world’s top three public chains, boasting upwards of 60 million users, more than 2.5 billion transactions, the world’s largest DApp ecosystem, and a TVL of over $11.7 billion. It also hosts the most-circulated stablecoin worldwide and supports on-chain circulation of major stablecoins including USDC, USDT, TUSD, and USDJ. Moreover, the daily transfer volume of TRON-based stablecoins has topped $10 billion multiple times already.

 

 

On October 30, TRON and BitTorrent officially launched the cross-chain scaling solution BitTorrent Chain (BTTC) with its Testnet enabled. As BTTC arrives, TRON will see the emergence of a closed-loop ecosystem of layer 1 and 2 networks with sound cross-chain connectivity, integrating both a robust underlying network of Global Human Settlement Layer and a heterogeneous, scalable cross-chain network BitTorrent Chain that features high throughput and full compatibility with EVM.

 

In a further effort to drive adoption, Justin Sun announced his plan to earmark $1 billion to encourage the migration of projects from Ethereum to BTTC. As a critical bridge connecting assets on TRON with many other heterogeneous chains, BTTC allows users from other chains to jointly contribute to the growth of the TRON ecosystem.

 

#TRON

Lao Government and EU Meet to Consider LAK 210 Billion Contribution to Education and Nutrition.

Yesterday, the European Union Delegation to Laos, together with the Ministry of Health, the Ministry of Education and Sports, the Ministry of Agriculture and Forestry, the Ministry of Planning and Investment and the Ministry of Finance, hosted the fourth Inter-Ministerial Budget Support Steering Committee.

ADB Donors Pledge USD 665 Million to Support ASEAN Green Recovery

Vietnamese coal-fired power plant

Four Asian Development Bank donors have pledged USD 665 million for green infrastructure development in Southeast Asia, which is one of the world’s most vulnerable regions to climate change.

Incomlend Capital Receives Capital Markets Services Licence from Monetary Authority of Singapore, Expanding Trade Finance Investment Opportunities for Investors

Incomlend Capital aims to raise and manage US$500 million for the Incomlend ESG Invoice Financing Programme

SINGAPORE – Media OutReach – 3 Novemver 2021 – Incomlend Capital, an Incomlend Group company, has received the Capital Markets Services (CMS) licence from the Monetary Authority of Singapore (MAS) to conduct fund management activities. The CMS license allows the company to set up and manage funds and collective investment schemes. Incomlend Capital now offers institutional and accredited investors a range of competitive and stable trade finance investment solutions.  

 

Incomlend Capital aims to provide investors with superior returns in the trade finance receivables market on a risk-adjusted basis. Investors will benefit from the fund management team’s active portfolio management, risk management, and security selection in addition to having their investments in a transparent, secured, and ring-fenced asset-holding structure.

 

One of the significant funds that Incomlend Capital will be managing is the Incomlend Environment Social, and Governance (ESG) Invoice Financing Programme, Asia’s first ESG-focused structured finance programme. Incomlend Capital aims to raise US$500 million for the programme and is in the advanced stages of discussion with institutional investors. This includes the US$60 million investment from the European alternative asset manager, Fasanara Capital.

 

The initiative allows Small and Medium Enterprises (SMEs) that meet the ESG and financial criteria to access quick turnaround invoice financing solutions. It also connects socially conscious investors with responsible, sustainable SMEs and enabling investors to find investments that better fit their values and financial goals.

 

Furthermore, Incomlend Capital will allow accredited investors access to the Incomlend Group’s global invoice financing marketplace through the management of funds. The marketplace currently gives SMEs access to working capital solutions by matching proven exporters and importers with world-class investors. Since its launch in 2016, Incomlend Group has financed over $500 million in trades in over 50 countries.

 

Incomlend Group currently counts prominent venture capital funds, including Sequoia Capital and GTRVentures, and logistics multinational corporations, such as CMA CGM, as its strategic partners. With the CMS licence, Incomlend Capital is looking to partner with more global fund managers to place their products with accredited and institutional investors.

 

Incomlend Capital CEO Swajit Rath commented:

“As a global financial hub, Singapore is a nexus for investors seeking access and quality investment opportunities across markets in the Asia Pacific and the world. With the CMS licence, we can deliver bespoke investment solutions and support that enable investors to achieve optimal returns at a risk level suited to their unique needs. It’s also a strategic move to scale Incomlend Group’s global invoice financing marketplace. With more investors and funding, we can deliver alternative working capital solutions to more quality SMEs globally, enabling them to accelerate their business growth.”  

About Incomlend Capital

Incomlend Capital is an Incomlend Group company that offers managed fund services to institutional and accredited investors. The Singapore-based fund management company combines custom-tailored advice, the latest technology, and industry research for investors to achieve optimal returns at a risk level suited to their needs. For more information, visit www.incomlendcapital.com.

#IncomlendCapital