Special Features
Bankers Revise Predictions Of 2011 M&A Activity In The Middle East
As a result of the dramatic events currently taking place across the Middle East, investment bankers across the region are now describing 2011 as “a year of anticipation”. Compared to predictions made as recently as January 2011, when bankers predicted a 20% increase in M&A volumes, revised activity levels will now remain “flat to down” compared to 2010.This was revealed in the M&A Barometer – Special Situation Update, a report prepared by financial PR advisors M: Communications and business information provider Zawya as a follow up to the original M&A Barometer published in February this year.
Interviews with 12 of the region’s leading investment bankers reveal that economic activity in 2011 will be highly disrupted. A potential pick up in the latter half of the 2011 will be almost wholly dependent on the outcomes of the political upheavals across the region with some bankers feeling gloomy about regional M&A prospects for 2012 as well.
According to a majority of bankers, the previous estimate of an increase of 20% in M&A activity during 2011 no longer remains realistic. However, although disruptive in the short term, there is general consensus that the political changes that have taken place over the past weeks will in the long term have positive effects on economic activity in the Middle East.
As a result of the political unrest, bankers now expect to see increased government investments directed towards domestic economies in sectors such as infrastructure, healthcare and education. This is regarded as a strategic move by regional governments in order to more effectively manage the expectations of national populations. Similarly, Sovereign Wealth Funds are expected to revisit their investment strategies and redirect capital flow to investments within national and regional borders.
Despite the fact that Egypt has seen some of the most dramatic political events, bankers still believe that the Egyptian economy has the potential to see very high levels of economic activity once the situation stabilises. Other findings also reveal that Financial Services is the sector most likely to suffer, mainly due to loss of credibility and confidence.
The M&A Barometer will be made available to all Zawya subscribers at www.zawya.com
