The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

Finance and Covid-19: The biggest dangers lurk in risk-free markets

As government debt burdens keep rising to fight the virus, so do the chances of sudden sell-offs that could suck all markets into a vicious downward cycle.

vaccine-dollar-covid-syringe-coronavirus-960x535.png

Euromoney asks the head of investment banking at a large firm if he fears that the true extent of the economic damage from the coronavirus will only appear when the vaccines roll out and governments rein in emergency support.

He is not, it turns out, a worrier.

Rather, he expects the boom conditions that helped his business pull in record revenues in 2020 to roll over into 2021, albeit with some differences.

“Remember that, after the devastation of the Spanish flu we had the roaring 20s,” he says, later asking not to have this quote attributed to him.

He thinks M&A will be up at least 15% and maybe more in the 12 months ahead as Covid winners consolidate their industries and laggards restructure.

“Boardroom and management confidence is back,” he says.

Some of those M&A deals will be accompanied by equity raising; many of them by debt. Financing at close to zero rates makes most M&A deals earnings-accretive quite quickly, although it does less for the disciplined analysis of potential return on investment above its cost. Equity investors just like to hear about earnings growth.

Rates are the big wild card
Shanx Tandon, Credit Suisse

Banks, including this banker’s, are confident and have ample capital and liquidity to extend big bridge loans.


You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree