After three bad years, investment banks are now becoming more bullish about the M&A and IPO pipeline. More work in the final quarter is expected, which can only be good for business.
M&A deal volume in the US rose 29% in the third quarter to $119bn, besting Europe, which managed $100bn, where deal volumes fell 17%. Although European M&A activity bounced back in 2002, since the final quarter of that year deal volumes have consistently fallen.
JP Morgan, however, remains optimistic about the prospects for M&A for the final quarter in the US. The firm expects October's momentum to be carried through to the end of the year. October represented the biggest month for US M&A since July 2001 - the the final week alone, $80bn worth of deals were announced.
October was also busy on the US IPO front, with 10 deals raising $1.26bn. This represents the most deals in a month for a year. Even more positively, the average share price of IPOs issued this year in the US has climbed 33% above the original offer price.
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