Robert Kindler may have been off by 12 months when he predicted that 2013 would be the year that mergers and acquisition activity picked up.
Kindler, the head of global M&A at Morgan Stanley, made a new forecast Monday, telling CNBC's "Squawk on the Street" that after 12 drowsy months, dealmaking volume should increase 10 percent to 15 percent in 2014. He also expects to see more cross-border and stock deals, especially if stock prices continue to rise.
(Read more: )
"I did think sitting here that it would be a great year for M&A and it ended up being a flat year," he said. "It's hard to know. I think part of it is there's been uncertainties in the market, but part of it was that the market really ran this year. The market ran, but CEOs and managements hadn't really changed their view of the world, so valuations got out of whack."
(Read more: )
M&A activity reached an eight-year low in 2013 and dipped below the dot-com levels of 13 years ago, falling by 6.2 percent from 2012, according to Ernst & Young. This year's decline came despite a flurry of megadeals, including Vodafone's agreement to sell its stake in Verizon back to the U.S. wireless carrier for $130 billion, the third-largest corporate deal in history.
Because of uncertainty in the markets, corporate leaders were reluctant to take on debt to complete deals, Kindler said, even with ultralow interest rates.
(Read more: AIG selling aircraft leasing unit in $5.4 billion deal)
"People always talk about, 'Debt is so cheap, so why won't you do a deal,?" Kindler said. "Well, you do have to pay it back eventually. If you're taking a long-term view, just because debt is cheap doesn't mean you should borrow. You really have to get down to fundamental value."
—By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street"