Tag Archives: Stock Market
As the New Year begins, expectations in the M&A are high. There was an overall decline in activity in 2016 as compared to 2015. To most of the deal makers, it is due to the uncertainties that come with political environment. However, as the year unveils, stabilization in the new administration will dictate the market, with predictions of favors in the Mergers and Acquisition markets.
2017 Expectations in the Merger market.
2016 showed a drop in activity by a 25% decline in activity and reduction in deals. According to M. Bolsinger from Dechert; there are a lot of expectations from the new administration; running from changes in tax policies, interest rates, to other macroeconomic drivers. It is until the changes stabilize that great deals in M&A will crop. Bolsinger is also optimistic on the available opportunities in the financial sector based on the president’s elect promise to replace Dodd-Frank. From his perspective, there is uncertainty of performance in the environment and healthcare sectors.
It is also expected that M&A importance will be of significance in 2017. The US$1.7tn is the amount of money reported to be lying idle in the financial sectors, which is expected to be put in the M&A market for a significant whopping change. Also, there is the need to invest in the organic growth around the world. According to J, Packee, Baird, most investors concentrate on the inorganic investment. It is reported that dry powder stood at US$800bn in Q3 which would have been invested in the sector.
The first quarter of 2017 is expected to show an increasing trend in the deal activity due to the sudden drop of uncertainties from the pre-election period. According to Eurazzo, who works for an international investment company in Paris, the drop in uncertainties can be seen from the trends in the US stock market.
In addition, higher expectations in the M&A deal sector is linked to the emphasis on quality of deals in 2016 which slowed down activities. It is however expected to be different in the first and second quarters of 2017, since there is more confidence in the inventory deal as high quality deals venture the market.
Expectations in the private equity activity in 2017
It is reported that private equity activity in 2016 in North America remained strong, which is in contrast with the drop in the corporate M&A. In the first, second and third quarters of 2016, there were 781 private equity deals valued at US1bn, which is just five fewer from 786 deals in 2015. The technology, industrial and chemicals, and the business services sectors are the top three sectors that largely contributed to the private equity deals in 2016.
According to West Monroe, the last seven years have recorded such a high competition in the private equity deals. This is due to the emphasis in quality deals, speed and valuation, and availability of active strategic buyers. Also, the financial sponsors have made the private equity business easy and convenient. This is because, private equity firms assemble portfolio companies and then roll up add-ons to those companies.
However, according to Bolsinger, the high competition is due to: fewer and fewer large-cap deals; and availability of very acquisitive strategies that sit on a lot of cash while still fostering big threats to the private equities.
Eurazzo sees the long term deals between a business owner and a private equity firm much more sufficient than the short term deals. This is due to the fact that businesses take long to be more productive.
The driving force of the increase in the inbound deal value by 21% in mid-market M&A.
The inbound deal value went up by 21% to US$22.9bn in Q1-Q3 in 2016 especially from the Asia based acquirers. The Asian countries engage in M&A for various reasons such as acquiring better technology or to expand their market share.
The success of great deals in M&A is the buying of beneficial brands and investing back to the countries’ businesses to enhance them. Also, a strict state control helps in improving M&A deals as evident from the China State Council.
The challenges facing the M&A deals.
Cultural differences makes it difficult for some investors to invest and succeed in foreign areas. This is due to political and cultural differences, as well as communication barriers. However, buying a well-established business can conquer the challenges.
The expansion of private debt for M&A activity.
In 2016, the closed end private debt fund had more than US$131bn, which is the highest amount recorded ever. The increased debts according to Monroe is due to the low interest rates. Also, investors have turned up in large numbers to seek for direct lending, which proves to be more convenient rather than the traditional way of banking market.
Indian stock market made history today. Indian stock benchmarks Sensex crossed 25,000 and Nifty crossed 7,500 mark respectively. Rupee also strengthened to 11 months high against US dollar. This is all because India gets its long waited single party government in the Lok Sabha election 2014. BJP led by Narendra Modi is the prime creator of this magic.
Sensex climed 1470 points to touch the all time high of 25,373.63 and ended on 24,121.74 points. Nifty also climed 440.35 points to hit 7,563.50 and ended on 7,203 points.
Indian rupee today gets strengthened to 11 months high of 58.62 against US dollar and ended on at 58.79.
Millions of people already have their own ISA, but if you are completely clueless when it comes to stocks and shares ISAs, don’t worry. This guide offers you a beginner’s introduction to the subject to give you an overview of what they are and some key points you need to know if you are thinking of investing.
- What is a stocks and shares ISA?
First of all, let’s look at what a stocks and shares ISA is. Essentially, it is a type of investment account that invests the money you put into it in the stock market. Depending on the specific account you get, it might invest in different types of companies.
Then, if the shares your money is invested in grows, you will earn dividends. These dividends can then be reinvested or you might be able to withdraw them, depending on the specific account you have.
- What is the annual savings limit?
One really important point about the stocks and shares ISA is that there is an annual limit as to how much you can put into your account. For the current tax year (2012/13), you can save up to £11280 in your investment ISA. Alternatively, you can also save up to have of that amount in a cash ISA. It’s also worth remembering that you can only open one new stocks and shares ISA per tax year, and even though you can hold multiple ISAs, the £11280 limit is the overall limit for all of your ISAs.
- What are the risks?
Now let’s have a look at the risks of the stocks and shares ISA. As we have already seen, it is a type of investment in the stock market. This means that as well as the potential to earn dividends, your money can also go down as well as up. This will depend on the performance of the stock market. You are usually recommended to save for the long term with a stocks and shares ISA to give your money the best chance of growing.
- What are the benefits?
One big benefit of this type of account is that it is tax-free. This means that if you earn dividends on your money, you won’t have to pay any tax on them. This is one of the main reasons these ISAs are so popular with investors.
Also, if you choose the best stocks and shares ISA you can find, the fund will be very careful about where they invest your money to give it the best possible chance of growth. The flexibility of being able to save part of your annual allowance in the form of cash is another benefit that appeals to many people.
- How do I choose an account?
When you are trying to choose the best stocks and shares ISA for your needs, it is important to do some research to see what is out there and the kind of account that might work for you. As well as past performance of the fund, look at things like the terms and conditions, the fees attached, how easy it is to access your money and the reputation of the provider to ensure that your investment has the best chance of success.
A particular mutual fund investment’s failure or success does not depend on their previous or present performance. It may be very attractive to buy funds when they are doing well in the market; however you being the new investor it is not advisable to buy funds depending on their past performance. The reason behind this advice is because you as an investor would want to buy mutual funds when the rates are low and sell them at the maximum price as much as you can.
Funds that are currently established have limited number of stocks in the market. This makes easy to analyze which stock is doing well and which one is not doing well. The stock that is doing well puts a huge effect because of their size being small and it is easy to evaluate this smaller stocks. It is very hard to remain at the same or top position as far as the stock market is concerned, that is the reason why we feel the effect to be less when the stock market is growing.
If you want maximum benefits from your mutual fund investment then you need to follow religiously the expanses and the tax charges that are applicable on these mutual funds. Some fund’s fees would cost you more than the other ones; in this case you should be able to negotiate the price in the market or with the stock broker in order to get good returns as an investor. In the long run if your fees or taxes are increased even by smaller percentage then it could be that your hard earned returns is being enjoyed by someone else. Being an investor it is very important to learn how the government taxes are applicable on your mutual fund investment. So the best ways to know about all this taxation is by reading prospectus that are available at the firm offices.
To buy bonds securities and stocks, a mutual fund manager always finds different ways to pull information from different small investors. This means that your investment is being analyzed by different buyers and you need not make any more investment on that particular mutual fund. Well if you are planning to buy different type of stocks that are available in the market then the investment might be required. However if you have sufficient funds then you could even go for international funds, which would give you more returns than the domestic funds.
There is an element of risk taken by the fund managers in order to get healthy returns. At times you may not agree with fund manager’s risk taken on the investment since you may not be thinking as he is doing. As far as we know, all mutual fund investment bears a minimum risk which is important to acknowledge.
Worries about Europe’s debt problem grew after Germany and the stocks were falling again today. In the morning the Dow Jones Industrial Average had lost 74 points and down to 10,437, Nasdaq was down to 17 points to 2,300, and S&P had down to 1114 after lost 6 points.
Germany’s ban effect the euro as it continues to fall. After Germany’s announcement euro fell down in the morning to the 4 year low of $1.0144.
What is short sell?
It is a bet that short sellers play, they expect that the value of an asset will fall.