January 13, 4:53 am
After two challenging years, the global corporate finance market is set to witness a long-awaited recovery. Possible interest-rate cuts have revived the market outlooks for this year, bringing a much more optimistic scenario than thought before.
According to data presented by AltIndex.com, the transaction value in the global corporate finance market is expected to grow by 16% year-over-year and hit $2.81trn in 2024.
After a brutal 2022, which saw a steep 72% drop in global IPO activity and a 29% decline in the total value of M&A deals, 2023 brought new headwinds for the corporate finance market. High inflation, rising interest rates, and the gloomy economic outlook made investors more wary of taking risks and less likely to invest, causing the total value of IPO deals to plunge by 30% to only $120bn, while M&A deals dropped by 17% to $2.3T, the lowest level in a decade.
Deal-making was down, especially for venture capital and private equity firms, which saw 39% and 35% declines, respectively. At the same time, strategic deals, in which a company buys or sells all or part of another company, were down by almost 15%.
However, possible interest-rate cuts in the year ahead brought back optimism in the market. According to a Statista survey, the total transaction value in the corporate finance market, including IPOs and M&A deals, is expected to hit $2.81trn in 2024. Although this represents a 16% increase compared to last year, that is still $1.1trn less than the $3.91trn reported in 2021, showing the road to a full recovery will be long.
Mergers and acquisitions are expected to see an 11% growth this year, with the total transaction value rising to $2.57trn, up from $2.3trn in 2023. The IPO sector will see much more significant growth, with the total value of deals doubling from $120bn in 2023 to $240bn this year.
In global comparison, the United States is the absolute leader in IPO and M&A activity and has the lion`s share in the corporate finance market. According to Statista, around 40% of the total transaction value in 2024, or $1.15trn, will come from American companies; 15% more than last year.
Although Europe and Asia will see similar growth rates, their market shares remain much smaller compared to the United States. Statistics show the European market will see $585bn worth of IPO and M&A deals this year, up from $511bn in 2023, making 20% of the market total. The total transaction value in the Asian market is expected to jump from $668bn to $770bn, representing 23% of this year`s total.
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The information provided by AltIndex is solely for informational purposes and not a substitute for professional financial advice. Investing in financial markets carries inherent risks, and past performance doesn't guarantee future results. It's crucial to do your research, consult with financial experts, and align your financial objectives and risk tolerance before investing. AltIndex creators and operators are not liable for any financial losses incurred from using this information. Users should exercise caution, seek professional advice, and be prepared for the risks involved in trading and investing in financial assets, only investing what they can afford to lose. The information in this application, derived from publicly available data, is believed to be reliable but may not always be accurate or current. Users should verify information independently and not solely rely on this application for financial decisions. By using AltIndex, you acknowledge that it doesn't offer financial advice and agree to consult a qualified financial advisor before making investment decisions.
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