2020 Year in Review – a Pandemic, a Trade-War, and All-Time Highs28.1.2021
Financial Markets Overview
2020 proved to be a year of challenges (to say the least!!!). COVID, drought & bushfires, trade wars and Australia’s first economic recession in 29 years – 2020 had it all.
The March Quarter was the most volatile trading period in history, with financial markets reaching all-time highs in February 2020 before falling by over 40% with some of the biggest daily losses in history. The market rallied in the following Quarters as market sentiment strengthened, lifted by historically low interest rates and trillions of dollars in global government stimulus. At the close of the calendar year the All-Country World Index had risen 14.3%, although the ASX200 closed down 1.5%.
As businesses looked to consolidate and strengthen balance sheets in March, M&A markets came to a grinding halt. However, investor sentiment quickly rebounded as the RBA slashed the cash rate to 0.1% and the Federal Government delivered $213 billion in stimulus packages.
Global M&A activity for the year fell to US$377 billion in the March quarter from US$800 billion in the previous quarter. This rebounded to over US$1,200 billion in the December Quarter, the highest transaction value Quarter since the Global Financial Crisis.
Against this backdrop of volatility, InterFinancial acted as lead advisor on eight transactions across 2020. All but one of these closed during COVID, and six closed in the second half of the year.
Outlook for 2021
2021 has started with a bang, with no signs of M&A activity slowing down. Low interest rates, a new boss in the White House, and the hope of COVID vaccinations easing travel restrictions are all fuelling investor confidence.
We wish all of our clients and colleagues a prosperous year, and look forward to announcing more successful transactions in the coming months.
InterFinancial’s Transactions – 2020 in Review