‘M&A conditions in a sweet spot’ – Beulah
Australian market conditions are ripe for merger and acquisition (M&A) activity through 2016, after a bumper 2015, a funds manager believes.
Beulah Capital chief investment officer, Dr Peter Mavromatis, said 2015 was the busiest period for takeover activity since the global financial crisis hit, providing a bright spot in a difficult year on the markets for investor, and forecast that M&A moves could intensify over the next 12 months.
"M&A conditions are in a sweet spot," he said.
"In a flat market it's important to consider some more alternative strategies, and takeovers is one which has shown an ability to add outperformance during ordinary market conditions.
"Australian companies look attractive to overseas buyers… the local share market's poor start to the year means that potential Australian takeover targets are now cheaper.
"The continued weakness in the Australian dollar makes Australian companies more attractive and there is unlikely to be a dramatic tightening of interest rates any time soon.
"Add to this the ongoing struggle for companies to grow organically, and more confidence by boards to initiate activity and it's a powerful mix."
Mavromatis noted that Beulah's Takeover Target Portfolio delivered an eight per cent return for investors in 2015, returning 15 per cent per annum since 2011.
AUTHOR
Staff Writer
Recommended for you
T. Rowe Price believes Australian growth is successfully managing to shrug off consumer weakness, but the firm’s multi-asset team is not yet positive enough to increase its underweight position.
Iress has issued an update denying the validity of “certain statements” made by an alleged threat actor, following a cyber incident last weekend.
The latest budget papers have outlined a $10 million provision for ASIC greenwashing enforcement activity as well as funds for a sustainable labelling regime to be partially met by industry levies.
Betashares has expanded its fixed income solutions with the launch of a new ETF offering exposure to subordinated bonds issued by the big four Australian banks.
