56243
International banks’ apprehension about dealing with Russia has helped VTB’s investment banking arm VTB Capital increase its Russian fee income this year to over $90 million from $56 million in 2015.
International banks’ apprehension about dealing with Russia has helped VTB’s investment banking arm VTB Capital increase its Russian fee income this year to over $90 million from $56 million in 2015.

Global M&A Deals Reach $3.1t

The outlook for 2017 remains uncertain, with Brexit negotiations, the nature of Trump’s presidency as well as the French and German elections, all under question

Global M&A Deals Reach $3.1t

Global merger and acquisition activity has soared to $3.1 trillion so far this year—its third highest since 2007—even as the deal value saw over 22% decline last year, says a report.
According to global deal tracking firm Mergermarket, despite a series of “political shockwaves”, global M&A activity till date amounted to $3.1 trillion through 16,194 deals, PTI reported.
The M&A deal tally so far this year registered a 22% decline in value terms and 10% fall in number of transactions over last year. Last year, the global deal tally stood at $3.9 trillion.
However, global M&A activity till date of $3.1 trillion managed to reach its third highest deal value since 2007, when transactions worth $3.7 trillion were announced.
The report further noted that October 2016 marked the peak of yearly M&A activity, with 1,362 deals worth $454.3 billion representing the highest monthly deal value since May 2007 when $546.7 billion transaction were announced.
The year 2016 witnessed just 38 big ticket transactions (worth more than $10 billion) aggregating $911.5 billion. In the corresponding period last year, there were 57 such deals worth $1.5 trillion.
Going forward, “the outlook for 2017 remains uncertain”, Mergermarket said, adding that “with Brexit negotiations, the nature of Trump’s presidency as well as the French and German elections, all under question’’.
Sector wise, energy, utility and mining attracted deals worth $582.8 billion by way of 1,351 deals, followed by industrials and chemicals ($498.5 billion, 3,056 deals) and technology ($401.4 billion, 2,115 deals).
The report further noted that Chinese dealmakers engaged in 242 deals worth $171 billion outside of Asia, 3.5 times higher than 2015’s previous record value.
US deal-making accelerated towards the end of the year, with a flurry of mega deals (AT&T/Time Warner, Level 3/Century Link, Energy Transfer/Sunuco) bumping up the deal value, it added.

 Russia Bucks the Trend
Investment banking deal volumes in Russia rose almost 50% in 2016, with domestic advisors leading the charge, but continued sanctions and the economic contraction mean the industry remained a shadow of its former self.
According to Thomson Reuters data up to December 14, equity capital market volumes in Russia have more than doubled to $3.1 billion this year, while capital raisings in debt markets rose by a quarter and the value of takeover deals involving Russian targets was up 65% at $36.5 billion.
But the combined total is down by 50% on three years ago.
Meanwhile total fees for M&A, ECM, DCM and loans rose to $359 million from $241 million in 2015, with the “bulge-bracket” banks such as JPMorgan, UBS and Goldman Sachs increasing their share of the pie but remaining well below their 2013 market share.
“Immediately after the sanctions were imposed there was some confusion while banks learnt how to comply with them. Now that the financial community has had time to fully understand the rules, the situation has improved,” said Riccardo Orcel, deputy chief executive of VTB Group, Russia’s second-largest bank, which itself is a target of the western sanctions.
International banks’ apprehension about dealing with Russia has helped VTB’s investment banking arm VTB Capital increase its Russian fee income this year to over $90 million from $56 million in 2015, making it the only major industry player to exceed what it made in Russia in 2013.
Starting in 2014, sanctions limited access to international capital for certain Russian businesses, scaring away investors and spooking compliance departments at top banks.
International banks can do deals but they have to ensure proceeds from capital raisings are not used for any purpose restricted by sanctions.
The western and retaliatory Russian sanctions are still in place but Russia is once again increasing in significance for some investment bankers, especially amidst speculation that the election of Donald Trump as president of the United States could result in the easing of sanctions.

 

Short URL : https://goo.gl/6BYbBT
  1. https://goo.gl/6ESsz1
  • https://goo.gl/9HBjRI
  • https://goo.gl/Bozrlr
  • https://goo.gl/6jfZEl
  • https://goo.gl/cSJ19y

You can also read ...

China has announced plans to gradually remove foreign ownership caps for limits for car, ship and aircraft makers.
US Treasury Secretary Steven Mnuchin said he’s considering a...
In South America, soybean farming has been a major driver of deforestation across the region including in the Amazon rainforest.
Officials from around the world came together to create and...
Central Asia Trio Test Investor Conviction
Central Asian financial markets lacked clear direction after a...
the 2018 forecast remains lower than all but five of 38 predictions  from economists surveyed by Bloomberg.
With Brazilian economists cutting their growth forecasts for...
North Korea Leader Could Pursue Reforms Under a Different Name
North Korean leader Kim Jong Un’s promise to build “socialist...
Int’l Community Backs Afghan Reforms
Major economic powers and international institutions have...
Taiwan FDI Increases
According to the statistics of the investment commission of...
Pak Trade Deficit to Widen
Pakistan’s trade deficit is likely to swell to record $36...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus