The Faber Report

JPMorgan Investment Head Expects a Resurgence of M&A Activity


Mergers and acquisitions are due for a rebound, the head of investment banking at JPMorgan Chase told CNBC today.

M&A Titan Shares Outlook

“The truth of the matter is 2009 was the record level of issuance, both in the U.S. and globally," Doug Braunstein said, "for equity, for high-grade debt and most importantly high-yield debt and as we come into the first quarter it continues…”

According to Braunstein, investors are coming back into the market because “the risk profile from an fundamental economic stand point is better and we are taking our money that isn’t cash and moving it back.”

So, what does this mean in terms of M&A deals coming into the year?

Braunstein's expectation is, "as the economy strengthens and this access to capital continues to be a vibrant driver of liquidity, and with trillion dollars of cash on balance sheets, companies are going to start using the cash."

M&A Hot Stocks

Braunstein added it's important to remember that "the cycle time of an M&A deal from beginning to announcment is usually 3-6 months. And so if you believe that this quarter is the beginning of a sense of growing optimism about the U.S. economy, then I think our expectation is than it's not until the third or fourth quarter that your actually see deals announced."

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