M&A activity to boost equity markets

Growing merger and acquisition (M&A) activity and increasing investment suggest that firms are finally putting their massive cash piles to work, a trend which is likely to give equity markets another leg-up towards the end of the year.

Deals such as Verizon’s $130bn (€98bn) swoop for the rest of its US wireless business have pushed this year’s global M&A volume to $1.56 trillion, up 1% from the same period last year, according to Thomson Reuters data.

Combined with an uptick in capital spending by US and Japanese firms, they reflect improving corporate confidence which is encouraging companies to spend some of their dormant cash.