No. 1037 - A method for forecasting unquoted shares of non-financial corporations in the Italian financial accounts
Data on the market value of unquoted shares are published each quarter in Italy's Financial accounts and are based on corporate balance sheet data. These data, however, are reported at nominal value, available only at annual frequency, and released with a delay of more than one year. Therefore, several estimations are required. This paper proposes a new method for forecasting the value of outstanding amounts and transactions of unquoted shares.
When compared with alternative methods, the model we propose provides more accurate forecasts, showing a significant reduction in the mean error relative to the values based on final balance sheet data. This new approach enables timely and more precise estimates of unquoted shares, which constitute a relevant component of firms' financial structure and are useful to understand both their valuation and their strategies for financing investment needs.
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