Most investment bankers and lawyers expect to see mergers and acquisitions (M&A) and equity capital markets continue to boom in 2018.
A huge 77 per cent of respondents to a Thomson Reuters survey said they expected to see M&A activity increase over this year, while 21 per cent predicted it would escalate by more than a quarter.
Meanwhile 60 per cent of corporations put "funding acquisitions" in their top three priorities for using cash reserves in 2018.
“Many companies are in good health, with expectations of steadily rising revenues, capital expenditures and employment,” said Matthew Toole, director of Deals Intelligence at Thomson Reuters.
“Rather than sit on cash, the widely shared expectation is for companies to deploy capital on strategic acquisitions – a trend we’ve seen so far in 2018 with double-digit percentage gains for deal-making across all regions.”
So far this year, global deal activity has rocketed by 38 per cent compared to the same period last year to hit more than $800bn – the strongest start to a year since 2000. European M&A activity is at a 12-year high.
"Undervalued assets" were a key driver behind the deals, according to 47 per cent of respondents, who also cited "high-growth businesses" and "achieving economies of scale" as reasons for the M&A increase.
Regulatory compliance also came up, especially in Europe where 51 per cent of respondents saw this as driving consolidation. Sweeping new regulation has already hit the asset management industry this year, and upcoming data protection laws will also cause a stir across a range of sectors.