NEW YORK (Reuters) – Global bank executives said that dealmaking conditions have begun to improve, with some predicting a better outlook for strategic mergers and acquisitions at an industry event Tuesday.
Both M&A activity and initial public offerings (IPOs) faltered last year after Russia’s invasion of Ukraine and the U.S. Federal Reserve’s aggressive rate hikes to tame inflation.
“The M&A deals are coming a little faster,” Bank of America CEO Brian Moynihan told the Goldman Sachs U.S. Financial Services Conference on Tuesday.
Moynihan said that as the interest rate environment stabilizes, there would be more scope for dealmaking.
Goldman Sachs Chief Financial Officer Denis Coleman said a lot of clients had an appetite and interest in “doing something strategic”, but he cautioned that sponsors or private equity firms are cautious due to the higher cost of capital.
The capital markets environment has improved recently, which encouraged large listings in the United States including the listing of Arm Holdings.
On the deals front, Goldman Sachs was among the advisers to Pioneer Natural Resources, which agreed to sell itself to ExxonMobil in a $60 billion deal.
In a recent transaction, U.S. health insurer Cigna is in talks to merge with Humana, a source familiar with the matter told Reuters, a deal that could exceed $60 billion in value and would be certain to attract fierce antitrust scrutiny.
“Our dialog has never been stronger, conversations and pitches are happening,” Truist Financial CEO Bill Rogers said.
Moynihan said BofA will outperform the industry on investment banking fees in the current quarter.
“We’ll be at about $1 billion in fees this quarter,” reflecting a low single-digit decline that “outperforms the industry.” The industry-wide investment banking fee pool is expected to drop by 10% to 15%, he said.
Independent investment bank Evercore is also optimistic about the outlook for deals.
“There is no question that activity levels are high in our firm. But the announcements will depend on market stability and confidence levels, no board wants to announce a deal and get the stock crushed,” Evercore Chairman and CEO John Weinberg said.
Meanwhile, trading in equities and fixed income, currencies and commodities are on track to be flat on an annual basis, Goldman’s Coleman said.
Goldman expects compensation expenses to rise by a low single-digit percentage this year, reflecting the performance of its core businesses, Coleman said.
Goldman bosses are considering bigger bonuses to retain star traders and dealmakers this year as the bank looks to win over some who were disappointed by smaller payments in 2022, Reuters reported last month, citing sources familiar with matter.
(This story has been refiled to correct the spelling of Bank of America CEO’s last name in paragraphs 3, 4 and 10)
(Reporting by Saeed Azhar and Tatiana Bautzer; Editing by Lananh Nguyen and Alexander Smith)
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
