And now for a little euphoria….

sally euphoria

Two little snippets caught the eye today which will fuel either side of the bull-bear debate. First, the Bank of International Settlements(BIS) is expressing some concern about the “euphoric” state of capital markets….

 “… it is hard to avoid the sense of a puzzling disconnect between the markets’ buoyancy and underlying economic developments globally….  Despite the euphoria in financial markets, investment remains weak. Instead of adding to productive capacity, large firms prefer to buy back shares or engage in mergers and acquisitions.

And secondly, right on cue, we get a timely update on M&A activity for the first 6 months of the year from ThomsonReuters….

Year-to-date global deal volume as of June 26 surged to $1.75 trillion, up 75 percent from the year-ago period, according to Thomson Reuters data. That was the highest level since 2007, when deal volume reached $2.28 trillion.

And as funding becomes cheaper and cheaper there is no surprise to see valuations – that would be risk pricing in our book – loiter into rather punchy territory…

Buyers on average paid targets 13 times EBITDA in the first half of the year, compared with 11.8 times in the same period last year. That was the highest level since 2008, according to Thomson Reuters data.

Hmmm….2007….2008……climax or climb aboard?

Value

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