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December 26, 2010

M&A tops $2.2 trillion in first yearly rise since 2007

M&A tops $2.2 trillion in first yearly rise since 2007

LONDON/HONG KONG (Reuters) – Mergers and acquisitions rose for the first year since 2007, potentially marking the start of a new, multiyear M&A cycle in which emerging economies account for a bigger share of global dealmaking.

Thomson Reuters data showed announced M&A grew nearly a fifth this year, to $2.25 trillion globally. The preliminary figures show emerging markets made up a record 17 percent of transactions, and energy was the busiest sector.

Next year could be busier still. Executives, bankers, big investors such as Schroders, and analysts at banks including Credit Suisse, Nomura, and Societe Generale are among those predicting a further rise.

Cheap debt, record cash piles, the need to outpace sluggish economic growth, and positive market reactions to many deals in 2010 should embolden companies to strike more deals, they say.

“We feel M&A volumes will improve next year, there’s certainly going to be more cross-border activity than ever, and Asia — again — will be a bigger part of the equation,” said Scott Matlock, chairman of international M&A at Morgan Stanley .

Deutsche Bank , the world’s fifth-busiest merger adviser, said next year could bring a bigger rise.

“The increase in M&A activity in 2011 should exceed that of 2010,” said Henrik Aslaksen, Deutsche’s global head of M&A.

“There’s more confidence, there’s ample liquidity, financing costs are attractive, and there’s an intense focus amongst corporates to identify growth opportunities,” he added. “The pipeline is very broad-based. It’s not just confined to one to two sectors.”

Senior executives on average expect $3 trillion of M&A next year, a recent Thomson Reuters/Freeman survey found.

GOLDMAN LEADS

That means 2011 could be the second of several years of rising deals — earlier this year Citi analysts said the world was “in the foothills” of a new M&A cycle. These cycles typically last years: the last peaks came in 2000 and 2007.

Bankers say a combination of cheap stocks, as measured by price-to-earnings ratios, and even cheaper debt means many deals would offer a big boost to earnings.

The optimism comes despite a slower fourth quarter and the worst spate of withdrawn deals since the height of the credit crisis: two collapsed BHP Billiton deals, in Canada and Australia, alone cut $100 billion from M&A volumes.

Jeffrey Kaplan, global head of M&A at Bank of America Merrill Lynch , said it was still “challenging to get deals done,” despite “good momentum going into 2011 for both corporate and private equity activity.”

With about a fortnight to go, Morgan Stanley is lagging archrival Goldman Sachs , after beating it to the No. 1 ranking last year for the first time in 13 years.

Goldman Sachs, under M&A head Gordon Dyal, has advised on $513.1 billion of deals to Morgan Stanley’s $499.5 billion.

‘LAND-GRAB’

Emerging markets deals hit a record $378 billion, while developed markets lagged. Global M&A increased 19 percent, while U.S. M&A rose 11 percent and activity in Europe climbed 5 percent.

Colin Banfield, Citigroup’s head of M&A for Asia-Pacific, said currency rates were aiding the region’s companies, which were growing “more ambitious” and contemplating bigger deals.

But aside from several major telecommunications tie-ups in the developing markets, and the odd banner deal such as Chinese carmaker Geely’s purchase of Volvo from Ford, many deals from newer markets were aimed at securing resources or technologies.

“We’re still in the early days of emerging markets M&A,” said Matlock at Morgan Stanley.

“When it gets really hot is when people decide they want to buy and build truly global multinational corporations, and we’re not there yet. It’s more focused on acquiring natural resources or on opportunistic deals.”

Energy and power was the year’s busiest sector, with a near-40 percent rise in announced deals to $482 billion, followed by the financial and basic materials sectors.

Asian companies including China’s Sinopec Corp and Thailand’s PTT Exploration and Production struck deals that ranged from buying stakes in oil fields to Korea National Oil Corp’s hostile takeover of Britain’s Dana Petroleum.

“Asian players, led by China, are making a land-grab for resources to fuel their economies for many years into the future,” said Jeremy Wilson, co-head of natural resources at JPMorgan .

December 12, 2010

Govt to Issue Rp2 Trillion of Bonds Next Week

Filed under: Uncategorized — bigcapital @ 8:29 am
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Govt to Issue Rp2 Trillion of Bonds Next Week

 NEWS – Theindonesiatoday.com – The Government plans to issue four series of Rupiah bonds in Dec. 14, 2010, to raise Rp2 trillion for financing the state budget.

 Yudi Pramadi, head of public relation bureau at the Finance Ministry, said that four government bonds series to be offered are SPN20111215, FR0055, FR0053, and FR0056 series with nominal price of Rp1 million per unit.

 He said SPN20111215 series is the new issuance with discount interest payment and will due in December 15, 2011. The FR0055 series is the reopening bond which carries fixed rate of 7.37% and due in September 15, 2016.

 Also the reopening bonds are FR0053 and FR0056 series. FR0053 series carries coupon of 8.25% and due in July 15, 2021 while FR0056 series with 8.37% coupon will mature in September 15, 2026.

 Yudi said the bond settlement is scheduled for December 16, 2010

November 30, 2010

South Australian businesses strongest in ‘growth, cashflow’ – survey

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South Australian businesses strongest in ‘growth, cashflow’ – survey

SOUTH Australian small-to-medium-sized enterprises had the nation’s strongest business conditions and equal-highest cash flow position in the September quarter.

The latest NAB SME quarterly survey shows business conditions in SA rose by one index point, to eight, in the three months to September 30.

Nationally, the index fell by an average of one index point.

SA and Western Australia reported the nation’s strongest cash flow position, at 11 points.

NAB state general manager nabbusiness Jacqui Colwell said the results showed SA’s small businesses continued to outperform their Australian counterparts.

“South Australian SMEs have maintained the highest, or equal highest, business conditions nationally for the past year,” she said.

“The SA economy is characterised by steady growth without the level of peaks and troughs experienced in other states.”

Ms Colwell said the September quarter results highlighted the effects of ongoing global economic uncertainty, speculation around interest rates and this year’s drawn-out federal election.

“(This) caused some business owners to defer investment plans, focus on reducing debt levels and (curb) discretionary spending,” she said.

The survey also reveals that confidence among SMEs for the December quarter has improved strongly.

The 12-month outlook was “optimistic” at 25 points.

Other key results from the survey show:

* Small businesses operating in the finance and accommodation sectors had the strongest cashflow positions, with 28 and 14 points respectively. Construction and retail were the weakest in this area.

* Cash flows and borrowing costs were the most critical issues for SMEs.

*Business services, finance and health were the strongest performing SME sectors in the September quarter.

“The period leading up to Christmas is critical for many industries, particularly the retail sector which, unlike the Australian tourism industry, can benefit from the appreciating dollar,” said Ms Colwell.

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