Sharon Yeshaya, chief financial officer of Morgan Stanley, said the finance, healthcare and tech sectors in the Americas and Europe were the hottest areas, but momentum was building. develop elsewhere as well.
“What we are seeing are some really strong pipelines,” Ms. Yeshaya said in an interview after the bank announced a profit increase to $ 3.7 billion. “The force is expanding.”
The frantic pace has persisted despite the economic upheaval caused by the pandemic, trade disputes and geopolitical tensions, Matt Toole, director of transaction intelligence at Refinitiv, wrote of the record quarter. Vibrant stock markets, low borrowing costs and the emergence of new buyers from specialist acquisition companies will continue to support activity, he wrote.
“With the all-time high for full-year transactions broken in less than nine months and five consecutive quarters of over $ 1,000 billion in M&A activity, we have very little data to make real historical comparisons,” Mr Toole wrote.
Nevertheless, many factors can slow down. Stricter regulators in the United States, rising prices for goods and services, and measures taken by central banks to reduce stimulus efforts “will all help this cycle have yet to go,” he said. writing.
While maintaining an optimistic outlook, the bank chiefs recognized that there are many factors that could slow things down, including supply chain issues that have been going on for months and driving up prices for materials and goods. And economic indicators remain mixed: While bank chiefs have cited increased consumer spending as a positive sign, consumer confidence is declining.
Perhaps the biggest potential disruptor remains the Federal Reserve. Central bank officials may cut some of their economic support measures as early as next month and have started debating when they might need to raise interest rates to bring inflation under control.
But Jason Goldberg, analyst at Barclays, said the patchy recovery is just not a major concern for banks right now, especially when it comes to the deals they help close. Volatility is historically the biggest obstacle to closing deals, he said, so analysts are keeping a close eye on the stock market. But he expected global agreement activity to remain high for some time.