Dealmakers set for worst fourth quarter since ‘02

ADVISORY firms and investment banks face another troubling few months, after the worst start to the fourth quarter for M&A and equity fundraisings since 2002.

Global M&A activity since the start of the fourth quarter earlier this month has reached just $58.9bn (£37.4bn), down from $99.2bn at this point a year ago, data from Dealogic shows.

UK M&A activity was even more subdued, with activity at its lowest ebb since 1998. Deals worth just $2.8bn have closed since the start of October. This compares to a peak of $31bn in the same period in 2005 and $3.9bn a year ago.

Equity market activity globally is also at 2002 lows, as companies have shelved IPOs and share placements until they can be certain of better prices in calmer conditions.

Companies worldwide have raised just $3.6bn on stock markets in 88 transactions since the start of October – down from $62bn a year ago.

UK equity placements are down, but not yet plumbing the lows seen in 2008. Ten UK companies raised a total $102m in the past two weeks, down from $2.4bn a year ago but still higher than the paltry $52m raised in 2008.