Jim Armitage: Yes, things are looking up, but there's still a long way to go
This is still a 'risk-off' market. Expect a trickle of deals, sure, but not a flood
The markets have had one of their better weeks. Yesterday saw the FTSE 100 close 2.66 per cent up from Monday's start point, two big takeover deals trundled into London and, to top it all, Wall Street's golden boy Jamie Dimon, head of JPMorgan, declared that he sees green shoots all over America.
Make no mistake, it was a good day for bankers. Dimon steered his investment banking division ("casino" division if you're that way inclined) to far greater heights than most expected. Trading revenues were up 18% and overall profits for the bank were up 31%.
And, whether or not you believe corporate takeovers are good for the economy, they are, in normal times at least, a strong indicator of confidence. So to have two big deals in a day inevitably led to talk that the end was nigh for the drought of City deals.
But is it really? Certainly, there are arguments that say "yes": debt is cheap and easy to come by for big potential bidders, corporate balance sheets are full to the brim and the global economy is in better shape than a year ago. Share prices have fallen from their recent highs and the pound is weak, making our stock market-quoted companies look affordable to predators.
However, there are as many reasons to be fearful as greedy. Do you really buy that the world economy is on the mend when China's growth is slowing, the Eurozone remains a mess and every market under the sun gyrates wildly whenever those dread letters "Q" and "E" are mentioned together? Many shareholders don't. They would prefer the chief executives of the companies they own to refrain from taking big risks on takeovers until there is real long term clarity that the economy is fixed. Give our money back to us, don't waste it on acquisitions, they say.
Shareholders are a cautious bunch, and rightly so. To use the jargon of the investment bankers, this is still a "risk-off" market. Expect a trickle of deals, sure, but not a flood.
- 1 'Women should not laugh in public,' says Turkey's Deputy Prime Minister in morality speech
- 2 The secret report that helps Israel hide facts
- 3 Is Ebola coming to Britain? UK health officials issue warning to doctors as outbreak fears grow
- 4 Richard Dawkins says 'date rape is bad, stranger rape is worse' on Twitter
- 5 Danish TV reporter is all business up top, all party down below
The secret report that helps Israel hide facts
A day in the life of Vladimir Putin: The dictator in his labyrinth
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Boozy, ignorant, intolerant, but very polite – Britain as others see us
Were 'Poor Doors' added to mixed developments so wealthy residents don't have to go in alongside social housing tenants?
- < Previous
- Next >
iJobs Money & Business
£350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...
£25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...
£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...
£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...