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Barclays Wealth sees value in likely M&A trend

Date: 21 Jan 2010

The wealth manager says the environment is ripe for M&A since firms with strong balance sheets can borrow at record low rates. It also sees value in non-cyclical equities, renminbi appreciation and shorting gold.

Keywords (click to search): [Barclays Wealth] [non-cyclical equities] [M&A] [renminbi] [gold] [David Turner] [anpreet Gill] [Michael Crook]

Leigh Powell
Barclays Wealth has pinpointed opportunities for investors to profit from the anticipated revival in global merger and acquisition (M&A) activity this year.

The financial crisis and the freezing of credit markets prompted a dramatic drop in M&A transactions to levels not seen since 2002, from a peak in 2006.

But over the past year a rebound in equity markets and valuations, the rehabilitation of credit markets and global economic recovery have created an environment ripe for M&A.

David Turner, investment strategist for Barclays Wealth, notes that companies with strong balance sheets can now borrow at some of the lowest rates ever known.

“At present, non-financial balance sheets do not look excessively leveraged, and haven’t for some time,” he said. “What has changed over the past year is the ability of the corporate sector to issue debt.”

He points out that forward-looking measures suggest equity markets...

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