Sébastien GALANTI

GALANTI
Sébastien

enseignant-chercheurs

Domaine de recherche : Macroéconomie et Finance

Bureau : A227

E-mail : sebastien.galanti@univ-orleans.fr

Travaux

  • Publications dans des revues scientifiques
  • Ouvrages et rapports
  • Documents de travail et autres publications
  • Communications

2022

Investment and access to external finance in Europe: Does analyst coverage matter?

Sébastien Galanti, Aurélien Leroy, Anne-Gaël Vaubourg


We aim to determine whether analyst coverage improves European firms’ access to capital markets and investment. Based on a data set that includes firms from several European countries between 2000 and 2015, we implement a treatment effect framework and an instrumental variables (IV) approach, in which the intensity of industry-level waves in coverage is used as an instrument for firm-level coverage. We show that analyst coverage is favorable to firms’ debt and share issuance and their investment expenses. Our paper emphasizes the key role of financial analysts in improving European firms’ financial conditions

Lien HAL

2021

Bond Fund Fragility: Flow Reactions to Extremely Negative Return Shocks

Raphaëlle Bellando, Laura-Dona Capota, Sébastien Galanti


We study the relationship between French bond mutual fund returns and their flows to assess whether mutual funds can generate financial instability. We show that mutual funds that present very negative short-term returns experience greater outflows than other funds (this effect appears at the bottom negative return quintile). Furthermore, regardless of the mutual funds’ returns, investors seem to redeem more during periods of financial stress. Additional results show that for institutional investors, the nonlinear effect appears more frequently, starting from the second quintile of negative returns. This confirms the fragility stemming from negative shocks to bond mutual funds.

Lien HAL

2020

Industrie de la gestion d'actifs : de l'émergence à l'apparition de nouveaux risques

Sébastien Galanti, Françoise Le Quéré


Résumé non disponible.

Lien HAL

Unbundling financial services: The case of brokerage and investment research

Sébastien Galanti, Anne-Gael Vaubourg


Résumé non disponible.

Lien HAL

2017

Optimism bias in financial analysts' earnings forecasts: Do commissions sharing agreements reduce conflicts of interest?

Sébastien Galanti, Anne-Gaël Vaubourg


Implemented in May 2007, the French rules governing commission-sharing agreements (CSAs) consist of unbundling brokerage and investment research fees. The goal of this paper is to analyze the effect of these rules on analysts' forecasts. Based on a sample of one-year-ahead earnings per share forecasts for 58 French firms during the period from 1999 to 2011, we conduct panel data regressions. We show that the analysts' optimistic bias declined significantly after CSA rules, which suggests that these rules are effective at curbing the conflicts of interest between brokerage activities and financial research. Our results are robust tothe impact of the Global Settlement and the Market Abuse Directive.

Lien HAL

Information efficiency on an emerging market: analysts’ recommendations in Tunisia

Sébastien Galanti, Zahra Ben Braham


We use a unique database, collected by aggregating analysts’ reports on the Tunisian Stock Exchange. We study the price impact and the excess returns following analysts’ recommendations. Results are qualitatively in line with the literature. However, although often significant, the results are not as bold as one expects in a frontier market. We hypothesize that the market is not liquid enough for trades to fully convey the information content of recommendations. Moreover, we find that reiterated recommendations have more impact than revised recommendations. Studying reiterated recommendations provides original results. This is important, as it suggests that it could be more profitable for investors to follow reiterations on emerging markets

Lien HAL

La relation firme-analyste explique-t-elle les erreurs de prévision des analystes ?

Régis Breton, Sébastien Galanti, Christophe Hurlin, Anne-Gaël Vaubourg


L'article vérifie dans quelle mesure l'intensité de la relation entre une firme et un analyste financier améliore ou dégrade la précision des prévisions produites par cet analyste sur cette firme. A partir d'un échantillon de prévisions de Bénéfices Par Action (BPA) sur 208 entreprises françaises, nous régressons l'erreur de prévision des analystes sur un ensemble de variables observables. Puis nous décomposons l'effet fixe de la régression et utilisons l'effet couple firme-analyste comme mesure de l'intensité de la relation. On montre qu'un effet couple faible (important) est associé à une erreur de prévision faible (importante), suggérant qu'une relation étroite entre une firme et un analyste tend à biaiser la prévision de ce dernier. Les analystes expérimentés et spécialisés dans le suivi des firmes à forte capitalisation semblent cependant moins sujets à ce biais.

Lien HAL

2016

The profitability of financial analysts' recommendations: evidence from an emerging market

Raphaëlle Bellando, Zahra Ben Braham, Sébastien Galanti


This article aims at measuring recommendation value on the Tunisian market and uses a database of 6646 recommendations (2005-2009). We apply the methodology of calendar-time portfolio analysis. This consists in simulating a portfolio that would include stocks depending on the recommendations issued. In order to measure abnormal (or “excess”) returns, the raw return of the portfolio is then compared to the evolution of the stock index and to the prediction of the Capital Asset Pricing Model. Portfolios following buy recommendations have raw monthly returns around 2% to 3%, but their excess return is not statistically different from zero. The portfolios following sell recommendations have a positive raw return but a significant negative excess return, which is explained mainly by the strong uprising trend of the Tunisian market on the sample period. Furthermore, although portfolios that follow upgraded recommendation have a positive raw return, the abnormal returns of upgrade or downgrade portfolios are not significantly different from zero. We build long-short portfolios, some of which earn a positive significant excess risk-adjusted return of 1.19% per month. Finally, the fact that “sell” signals are largely more informative than “buy” signals suggests that the market trend on a five years scale probably influences the ability of analysts to pick stocks that evolves reversely from the trend

Lien HAL

Archival data of financial analysts' earnings forecasts in the Euro zone: problems with euro conversions

Sébastien Galanti


In multi-country studies, researchers frequently extract data in a single currency rather than in native currencies. This approach can be misleading for financial analysts’ forecasts in the euro zone when researchers are using the IBES database. We suspect that forecasts of earnings before the birth of the euro on January 1, 1999 are kept in national currencies, although they are supposed to be displayed in euros, which can severely distort results concerning earnings forecast accuracy. We propose a simple procedure for checking for the existence of this error, as well as a quick solution to overcome it.

Lien HAL

Quelles incidences d'un élargissement du rôle des fonds d'investissement collectifs ?

Sébastien Galanti, Françoise Le Quere


La désintermédiation bancaire se traduit par un rôle plus important des acteurs du shadow banking. Les fonds d’investissement attirent une part considérable de l’épargne des français qui auparavant étaient dirigée vers les banques. Cette évolution interroge sur l’efficacité ainsi que sur les risques d’un mode d’intermédiation hors champs régulé. La littérature académique s’efforce de mieux connaître le comportement de ces acteurs et d’identifier les risques de leurs pratiques. La littérature empirique propose de vérifier si certains de ces risques – délégation, implications en cas de rachats massifs et contagion sur les prix d’actifs ; sensibilité au herding des gérants etc. - peuvent être mis en évidence. Nous nous proposons d’effectuer ce type d’évaluation pour des fonds mutuels français ouverts investis en actions ou en obligations.

Lien HAL

2015

Euro PP : comment situer le Placement Privé parmi les modes de financement des PME-ETI ?

Sébastien Galanti, Iarina Lazar


Launched by the end of 2012 in France, the EuroPP market aims at promoting the Private Placement as a complementary solution to the banking financing of small and medium enterprises. It is a partnership between an undertaking bank and different partners –mostly Insurance Companies. This article shows that this financing lies midway between banking and market financing. However its future success is not certain. It will depend on the success of the other alternative financings: Stock Exchanges dedicated to the SMEs, business angels, and SMEs’ loans securitization. Moreover, the policies of enhancing bank loans to SMEs (initiated by the French government or the European Union), and also the relative weakness of SMEs’ demand for financing, lead us to mitigate the prospects of a sudden growth of the Private Placement market.

Lien HAL

2006

Les styles de gestion de portefeuille existent-ils?

C. Aaron, I. Bilon, Sébastien Galanti, Y. Tadjeddine


Résumé non disponible.

Lien HAL

Which side are you on? How institutional positions affect financial analysts' incentives

Sébastien Galanti


Résumé non disponible.

Lien HAL

2005

Les styles de gestion de portefeuille existent-ils?

C. Aaron, I. Bilon, Sébastien Galanti, Y. Tadjeddine


Résumé non disponible.

Lien HAL

2004

La gestion collective dans un marché agité : La dynamique des styles à partir des cartes de Kohonen

C. Aaron, Sébastien Galanti, Y. Tadjeddine


Résumé non disponible.

Lien HAL

2018

Gestion du risque de prix dans les filières de matières premières

Raphael Chiappini, Yves Jegourel, Sebastien Galanti


Résumé non disponible.

Lien HAL

Les recommandations sur actions des analystes financiers sont-elles informatives et profitables ? Application à un marché frontière.

Sébastien Galanti, Zahra Ben Braham, Raphaëlle Bellando


Le chapitre montre que les recommandations d'analystes sur le marché tunisien ont un impact sur les cours boursiers. Bien que faible, cet impact atteste d'une contribution à l'amélioration de l'efficience informationnelle. Ensuite, on montre que des portefeuilles suivant les recommandations ont des rentabilités excédentaires positives. Là encore l'ordre de grandeur est faible, mais il montre néanmoins que suivre les recommandations permet d'obtenir un profit supérieur à celui issu d'un suivi passif de l'indice de marché.

Lien HAL

2022

Investment and access to external finance in Europe: Does analyst coverage matter?

Sébastien Galanti, Aurélien Leroy, Anne-Gaël Vaubourg


We aim to determine whether analyst coverage improves European firms’ access to capital markets and investment. Based on a data set that includes firms from several European countries between 2000 and 2015, we implement a treatment effect estimate and an instrumental variables (IV) approach, in which the intensity of industry-level waves in coverage is used as an instrument for firm-level coverage. We show that analyst coverage is favorable to firms’ debt and share issuance and their investment expenses. Our paper emphasizes the key role of financial analysts in improving European firms’ financial conditions.

Lien HAL

2017

Optimism bias in financial analysts' earnings forecasts: Do commissions sharing agreements reduce conflicts of interest?

Sébastien Galanti, Anne-Gaël Vaubourg


Implemented in May 2007, the French rules governing commission-sharing agreements (CSAs) consist of unbundling brokerage and investment research fees. The goal of this paper is to analyze the effect of these rules on analysts' forecasts. Based on a sample of one-year-ahead earnings per share forecasts for 58 French firms during the period from 1999 to 2011, we conduct panel data regressions. We show that the analysts' optimistic bias declined significantly after CSA rules, which suggests that these rules are effective at curbing the conflicts of interest between brokerage activities and financial research. Our results are robust tothe impact of the Global Settlement and the Market Abuse Directive.

Lien HAL

2016

Archival data of financial analysts' earnings forecasts in the Euro zone: problems with euro conversions

Sébastien Galanti


In multi-country studies, researchers frequently extract data in a single currency rather than in native currencies. This approach can be misleading for financial analysts’ forecasts in the euro zone when researchers are using the IBES database. We suspect that forecasts of earnings before the birth of the euro on January 1, 1999 are kept in national currencies, although they are supposed to be displayed in euros, which can severely distort results concerning earnings forecast accuracy. We propose a simple procedure for checking for the existence of this error, as well as a quick solution to overcome it.

Lien HAL

Euro PP : comment situer le Placement Privé parmi les modes de financement des PME-ETI ?

Sébastien Galanti, Iarina Lazar


Ouvert fin 2012 en France, le marché de l’Euro PP promeut le Placement Privé comme une solution complémentaire au financement bancaire pour les Petites et Moyennes Entreprises et Entreprises de Tailles Intermédiaires (PME-ETI). Il consiste en un partenariat entre une banque organisatrice et différent partenaires –principalement des assureurs. Cet article montre que, si sa mise en oeuvre constitue effectivement un chaînon manquant entre le crédit bancaire et le financement de marché, son succès futur n’est pas garanti et dépend des financements alternatifs : cote boursière dédiée aux PME, « business angels » et titrisation de crédit PME. De plus, les différentes politiques de soutien au crédit aux PME initiées par le gouvernement français ou l’Union Européenne, ainsi que la relative faiblesse actuelle de la demande de financement de la part des PME-ETI nous amènent à relativiser les perspectives d’essor rapide de ce marché.

Lien HAL

2014

Recommendation Value on an Emerging Market: the Impact of Analyst' Recommendations on Stock Prices and Trading Volumes in Tunisia

Zahra Ben Braham, Sébastien Galanti


Financial analysts issue "buy", "sell" or "hold" recommendation about stocks. Recommendations have value if investors trade upon them, which should affect prices and trading volumes. We use the methodology of event study to analyze price and volume reaction to the recommendation release. With a database of 6646 recommendations about 55 companies on the Tunisian Stock Exchange (BVMT) from 2005 to 2009, we show that prices and volumes react significantly to recommendations level. However, we only provide a weak evidence of reaction to changes in recommendations. We explain this result by a special feature of this market place: the systematic release of monthly recommendations, in contrast to developed markets where new recommendations are issued only if new information is available. This can focus investors on the confirmation of the recommendation, rather than on their revisions. We also find a special feature of emerging stock markets, which is that volumes are abnormally low for most of the event period following a "sell" or "hold" recommendation, whereas in that case they are abnormally high in more liquid markets.

Lien HAL

The Performance of Portfolios Based on Analysts' Recommendations: the Tunisian Case

Raphaëlle Bellando, Zahra Ben Braham, Sébastien Galanti


This article aims at measuring recommendation value on the Tunisian market and uses a database of 6646 recommendations (2005-2009). We apply the methodology of calendar-time portfolio analysis. This consists in simulating a portfolio that would include stocks depending on the recommendations issued. In order to measure abnormal (or “excess”) returns, the raw return of the portfolio is then compared to the evolution of the stock index and to the prediction of the Capital Asset Pricing Model. Portfolios following buy recommendations have raw monthly returns around 2% to 3%, but their excess return is not statistically different from zero. The portfolios following sell recommendations have a positive raw return but a significant negative excess return, which is explained mainly by the strong uprising trend of the Tunisian market on the sample period. Furthermore, although portfolios that follow upgraded recommendation have a positive raw return, the abnormal returns of upgrade or downgrade portfolios are not significantly different from zero. We build long-short portfolios, some of which earn a positive significant excess risk-adjusted return of 1.19% per month. Finally, the fact that “sell” signals are largely more informative than “buy” signals suggests that the market trend on a five years scale probably influences the ability of analysts to pick stocks that evolves reversely from the trend.

Lien HAL

The Performance of Portfolios Based on Analysts' Recommendations: the Tunisian Case

Raphaëlle Bellando, Zahra Ben Braham, Sébastien Galanti


This article aims at measuring recommendation value on the Tunisian market and uses a hand-collected database of 6646 recommendations (2005–2009). We apply the methodology of calendar–time portfolio analysis. This consists of simulating a portfolio that would include stocks depending on the recommendations issued by financial analysts. In order to measure abnormal (or ‘excess’) returns, the raw return of the portfolio is then compared to the evolution of the stock index and to the prediction of the Capital Asset- Pricing Model. Some of the portfolios we build earn a positive significant excess risk-adjusted return of 1.19% per month. Beyond the results that are in line with the literature, we provide two original results. First, ‘sell’ signals are informative, whereas ‘buy’ signals are not. We suggest that it is related to large (small) firms having more ‘buy’ (‘sell’) recommendations and to the direction of the market trend over the period. Second, the fact that recommendation levels have more impact than recommendation changes is explained by the specific informational context on that market, which is that recommendations are systematically disclosed each month, whereas on other markets, recommendations are produced only when the analyst has some new information to disclose.

Lien HAL

2013

Does the firm-analyst relationship matter in explaining analysts' earnings forecast errors?

Régis Breton, Sébastien Galanti, Christophe Hurlin, Anne-Gaël Vaubourg


We study whether financial analysts' concern for preserving good relationships with firms' managers motivates them to issue pessimistic or optimistic forecasts. Based on a dataset of one-yearahead EPS forecasts issued by 4 648 analysts concerning 241 French firms (1997-2007), we regress the analysts' forecast accuracy on its unintentional determinants. We then decompose the fixed effect of the regression and we use the firm-analyst pair effect as a measure of the intensity of the firm-analyst relationship. We find that a low (high) firm-analyst pair effect is associated with a low (high) forecast error. This observation suggests that pessimism and optimism result from the analysts' concern for cultivating their relationship with the firm's management.

Lien HAL

2011

Does soft information matter for financial analysts' forecasts? A gravity model approach

Régis Breton, Sébastien Galanti, Christophe Hurlin, Anne-Gaël Vaubourg


We study whether the financial analysts' concern to maintain good relationships with firms' managers in order to preserve their access to 'soft' qualitative information entice them to issue pessimistic or optimistic forecasts. We use a gravity model approach to firmsanalysts relationships and propose a measure of soft information. Our database contains the one-year ahead EPS forecasts issued by 4 648 analysts about 241 French firms (1997-2007). We find that a low (high) pair-effect is associated with a low (high) forecast error. This suggests that pessimism and optimism result from analysts' concern to preserve access to soft information released by managers.

Lien HAL

2008

When the payment mode affects the quality of advices. Financial analysts, fund managers, and brokerage commissions

Sébastien Galanti


Sell-side"analysts advise fund managers with recommendations to buy or sell a stock. But being compensated with commissions proportional to the amount traded can drive the analyst to bias his advice. In a two-agent model, it is notably shown that the probability of a biased equilibrium to occur increases with commission rate, but decreases with the weight of analyst rating. Moreover, the fund manager can cross-check the recommendation with his own signal–this may represent access to an in-house"buy-side analyst". The fund manager does not necessarily follow the sell-side analyst if its own signal is precise enough . The model hence provides a theoretical rationale for recent empirical results about the independance of sell-side analysts.

Lien HAL

When the Payment Mode Affects the Quality of Advices. Financial Analysts, Fund Managers, and Brokerage Commissions

Sébastien Galanti


Résumé non disponible.

Lien HAL

2004

Se distinguer sans s'isoler : le rôle du Consensus des analystes sur le marché d'actions

Sébastien Galanti


Résumé non disponible.

Lien HAL

Les styles des gérants OPCVM actions en France 1999-2003

C. Aaron, Sébastien Galanti, Y. Tadjeddine


Résumé non disponible.

Lien HAL

2003

What do analysts do? Investor decision and analyst rémunération mode

Sébastien Galanti


Résumé non disponible.

Lien HAL

2002

Incentives and constraints in information production: a study of financial analyst' behavior and representations

Sébastien Galanti


Résumé non disponible.

Lien HAL

2008

A Note on a Useful Distinction: Rules, and what Makes Rules Work?

Sébastien Galanti


Résumé non disponible.

Lien HAL

2007

When the Payment Mode Affects this Quality of Advices

Sébastien Galanti


Résumé non disponible.

Lien HAL