Possible impact of corporate governance profile on a Russian bank valuation

This paper aims at explaining the differences in valuation of banking firms in Russia through the impact of selected elements of corporate governance. We rely upon value-based management theory to test the hypothesis that expenses on corporate governance system create shareholder value. The price at which share stakes are acquired by strategic foreign investors is for us a criterion of market-proven value, so we use the standard valuation tool, i.e. price-to-book-value of equity (P/BV) multiple, as the dependent variable. The set of corporate governance parameters whose materiality for a would-be external investor we would like to test includes: the degree of concentration of ownership and control; maturity of corporate governing bodies; degree of Board independence; qualification of external auditors; stability of governing bodies (Management Board and Board of Directors); and availability of external credit ratings from the world's leading rating agencies. We test our approach on a sample of acquisition deals and public offerings over the period 2004-2008 that we develop for the first time. Firstly, we find out which factors are statistically significant and relevant to a bank's selling price. Secondly, a least squares multiple linear regression model is devised to check how each individual variable impacts the dependent variable. We discover that external investors attach value to high concentration of ownership, external credit rating coverage, stability of the Board of Directors, and involvement of well-established external auditors. Investors of a strategic nature tend to pay a higher acquisition premium. Independence of the Board of Directors might be perceived by external strategic investors as a disadvantage and might destroy shareholder value

Structural phase transition and dielectric relaxation in Pb(Zn1/3Nb2/3)O3 single crystals

The structure and the dielectric properties of Pb(Zn1/3Nb2/3)O3 (PZN) crystal have been investigated by means of high-resolution synchrotron x-ray diffraction (with an x-ray energy of 32 keV) and dielectric spectroscopy (in the frequency range of 100 Hz - 1 MHz). At high temperatures, the PZN crystal exhibits a cubic symmetry and polar nanoregions inherent to relaxor ferroelectrics are present, as evidenced by the single (222) Bragg peak and by the noticeable tails at the basis of the peak. At low temperatures, in addition to the well-known rhombohedral phase, another low-symmetry, probably ferroelectric, phase is found. The two phases coexist in the form of mesoscopic domains. The para- to ferroelectric phase transition is diffused and observed between 325 and 390 K, where the concentration of the low-temperature phases gradually increases and the cubic phase disappears upon cooling. However, no dielectric anomalies can be detected in the temperature range of diffuse phase transition. The temperature dependence of the dielectric constant show the maximum at higher temperature (Tm = 417 - 429 K, depending on frequency) with the typical relaxor dispersion at T < Tm and the frequency dependence of Tm fitted to the Vogel-Fulcher relation. Application of an electric field upon cooling from the cubic phase or poling the crystal in the ferroelectric phase gives rise to a sharp anomaly of the dielectric constant at T 390 K and diminishes greatly the dispersion at lower temperatures, but the dielectric relaxation process around Tm remains qualitatively unchanged. The results are discussed in the framework of the present models of relaxors and in comparison with the prototypical relaxor ferroelectric Pb(Mg1/3Nb2/3)O3.Comment: PDF file, 13 pages, 6 figures collected on pp.12-1

Domain structure in the monoclinic Pm phase of Pb(Mg1/3Nb2/3)O3 - PbTiO3 single crystals

The domain structure of (1-x)Pb(Mg1/3Nb2/3)O3- xPbTiO3 single crystals with composition x ~ 0.33 in the range of the morphotropic phase boundary (MPB) was studied. Based on the analysis of spontaneous strain compatibility and charge of domain walls, we have established the permissible domain arrangements for the ferroelectric phases of different symmetry, which are expected to occur in the range of the MPB. Examination of (001)-oriented unpoled and electrically poled (along the [001] direction) crystal plates in polarizing microscope reveals a monophase state with the domain structure compatible with the structure theoretically predicted for the Mc monoclinic phase (space group Pm), which was recently discovered in the compositions close to the MPB by x-ray and neutron diffraction studies. In the unpoled crystal the 180 deg. walls between the domains whose spontaneous polarization vectors are parallel to the plane of the crystal plate (i.e. a-domains) are observed. The domain structure of the poled crystal is predominantly composed of crystallographically prominent Wf walls parallel to (001) (i.e. the plane of the crystal plate) and inclined S walls parallel to [110] or [1-10] direction. In poled and unpoled samples the optical rotatory polarization effect is found, which is related to the inhomogeneity of the sample resulting from the mixture of domains.Comment: PDF file, 30 pages, 15 figures (3 in color) collected on pp.18-3

Quality of governance and bank valuation in Russia: An empirical study

This paper aims at explaining the differences in valuation of banking firms in Russia from a quality of governance point of view. A sample of acquisition deals and public offerings over the last 5 years is collected with the view of discovering factors that investors deem significant in making a decision whether to invest in a given banking firm and, if so, at what price. We use price-to-book-value of equity (P/BV) multiple as standard measurement of valuation and the dependent variable. As for explanatory variables, we put together a set of proxies for quality of bank governance and management, such as degree of concentration of control, managerial experience, degree of compliance with corporate governance best practices (e.g. degree of Board independence, qualification of external auditors), stability of bank’s governing bodies (Management Board and Board of Directors), and availability of external credit ratings. We find out which factors are statistically significant and relevant. A least squares multiple linear regression model is devised to check how individual variables explain the differences in valuation. We discover that external investors attach value to high concentration of ownership, sheer size of the bank, stability of the governing bodies, involvement of well-established external auditors and also that strategic investors tend to pay higher acquisition premiums. The features of the Board of Directors such as its independence, maturity and stability appear to create less value if any.Bank; corporate governance; valuation; Russia