SOARING equities markets are giving a major boost to confidence and should lead to a strong recovery in mergers and acquisitions and in share listings through 2013, top investment bankers at Deutsche Bank said yesterday.
Market activity, and thus bank revenues, have been falling ever since the financial crisis. But Deutsche Bank reports increasing optimism, forecasting a healthy recovery at last this year.
“There is a lot of positive feeling now that the Eurozone has stabilised and that we can now move into a growth phase,” said UK equity capital markets head Lorcan O’Shea.
“There is a significant pipeline of IPOs coming through in the UK.”
Although it is too soon to say what impact this will have on employment in the industry, there will clearly be hopes that the sector-wide collapse in jobs will come to an end or even reverse as more bankers are needed to work on the deals.
Deutsche expects mid-sized deals to be the first to come through as cautious firms and investors test the market.
Well-trailed deals, like joint venture minority unwinds delayed by the financial crisis, should also be early beneficiaries of the new optimism.
A particularly helpful change is that US investors are increasingly likely to fund activity in the UK and Europe, the bankers said, as they become more confident that they have now seen the bottom of the Eurozone crisis.
Private equity groups are also expected to take advantage of the rising tide to offload assets they have been sitting on through the lean years, as well as seeking to raise funds in the improved climate.