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- The Satisfaction of the Nordic tourist with the Azores as a destinationPublication . Vieira, José Cabral; Couto, Gualter; Pimentel, Pedro; Menezes, António Gomes de; Moniz, Ana Isabel Arruda; Sousa, FábioTourism is considered a strategic economic sector for the outermost regions of Europe. In the Azores, Tourism is a dynamic and growing activity. New segments have emerged, such as ecological and sustainable tourism, nautical tourism and wildlife tourism. Currently, new niches are being developed around sports (surf, paragliding and diving are recent examples), religion, nature, healthcare and wellbeing. The latest products and services serve as alternatives or complements to the more traditional venues of hotels and restaurants. The latter have managed to continuously upgrade their standing in global markets via large investments in modernization, innovation and employee training. Progressively, the Azores are becoming a desirable destination to inhabitants of modern and stressful urban areas of Europe and North-America. Specifically, Northern European markets are considered strategic for the region. The typical Nordic Tourist seeks products and services easily found in the Azorean touristic market. Also, visitor inflows from Northern Europe can mitigate the effects of seasonality, a phenomenon still very visible in the region’s sector. Because tourism is a very competitive business worldwide, it is crucial to employ policies that enhance competitiveness. It is reasonable to argue that these policies should be guided by accurate knowledge of the strong and weak characteristics of the Azores, as a destination competing in a global market. Under this context, this paper seeks to comprehend how the typical Nordic visitor feels pleased with his stay in the Azores. Using a large database of responses from tourists, we employ econometric methods to assess the degree of satisfaction of the average Nordic visitor with the Azores as a destination.
- Banking Products In PortugalPublication . Couto, Gualter; Pimentel, Pedro; Toste, Luís Miguel da SilvaThe offerings of financial products to investors have evolved considerably over the last decades. This study was undertaken to understand the importance of financial products in Portugal for banks and private clients. Different financial products can provide to banks an important role on their revenues and liquidity. For clients allows to invest their savings according the risk, complexity and potential return they pretend be exposed. Financial products can be divided into four groups: deposits, investment funds, securities, and insurance banking. The six largest banks with Portuguese headquarters were identified based on an analysis of net asset value, and the products offered were analyzed. It was found that on an overall basis, the offerings of financial products available in banks are rather diverse and, at the same time, uniform. It was also noted that investment decisions are dependent on the investors and there are financial innovations that attract differentiated savings.
- Empirical analysis of the Hsia option-pricing based model cost of capitalPublication . Neves, João C.; Pimentel, PedroThe cost of capital is a fundamental concept in strategic decisions such as capital investments, capital structure, new issues, mergers and acquisitions, spin-offs and other corporate restructurings. This paper explores empirically the option-based model developed by Hsia (1991) for estimating the cost of equity and the cost of capital of the firm. The composition of the sample in this exploratory study is all 17 non-financial companies listed in the Euronext Lisbon that are included in the market index PSI20. The Hsia model is used for estimating the cost of equity and the cost of capital of the firm for these 17 companies and is compared to the estimates obtained from the Capital Asset Pricing Model (CAPM) and the traditional weighted average cost of capital (WACC). The difference between the means of the cost of equity estimated by Hsia model and CAPM is not statistically significant at 1% level and their correlation of 46.2% is statistically significant at 1% level. However, the differences at the individual level are quite large. One of the limitations found in this study was the inconsistency on the computation of the cost of debt. The problem arise from the fact that the cost of debt do not follow the pattern expected in the theory, but we also find that the Hsia model is unable to deal with potential inconsistencies of the financial market.
- High Speed rail transport valuation and conjuncture shocksPublication . Couto, Gualter; Nunes, Cláudia; Pimentel, PedroIn the present paper we derive the optimal investment policy of investment in the high speed rail (HSR) project, under uncertainty, using the real options analysis (ROA) framework. We assume that the HSR demand, the main source of uncertainty, follows a geometric brownian motion with random jumps, complying with abrupt change of level caused by random events. The occurrence of such events is caused by external shocks. We assess the impact of these shocks in the HSR demand threshold, along with the investment opportunity value, and the option to differ. We consider several distributions for these jumps, and we compare with the base-line case (where exogeneous jumps are not considered).
- Evaluation of the surrender and the minimum guaranteed rate of return options in life insurance productsPublication . Pimentel, Pedro; Pereira, RicardoThis paper aims to value a Guaranteed Investment Contract (GIC), offered by insurance companies, with a minimum rate of return and an option to surrender the contract (surrender option) at any time before the maturity date. The valuation framework uses a set of different models to value each one of these two options included on a GIC contract commercialized by a Portuguese financial group. We estimate that the surrender option value is around 1.18 percent of the net premium and that the value for the minimum guaranteed rate of return option varies between 0 an 7 percent, according to the used model.
- Introducing random investment in high speed rail transport valuationPublication . Couto, Gualter; Nunes, Cláudia; Pimentel, PedroIn this paper, we extend Couto et al. (2012) high-speed rail (HSR) transport valuation model based on real options analysis, in order to embrace random investment. Optimal timing to invest, value of the option to defer and investment opportunity value are assessed considering uncertainty upon HSR demand and investment expenditures, both following a geometric Brownian motion with jumps driven by Poisson processes. Numerical results presented, showing the consistence with the former model and the additional uncertainty impact.
- Tourism development potential in an insular territory : the case of Ribeira Grande in the AzoresPublication . Couto, Gualter; Pimentel, Pedro; Ponte, João Crispim Borges daThe Autonomous Region of the Azores is one of the most sustainable destinations in the world. Being an archipelago comprised of nine small islands, quality and sustainability are critical features in the tourism sector, inducing the need for thorough and technical strategic development processes. Ribeira Grande is an important municipality in the Azores, which envisioned tourism as a strategic sector to develop when the partial liberalization of the air passenger transport sector occurred in 2015. However, this destination had little tourism maturity and competitiveness and required some structural planning work. The development of a strategic plan for tourism for the municipality of Ribeira Grande, including the selection of tourism products, is explained in detail in this article, which highlights the main challenges and results of the process.