Deloitte: Increased confidence in Central Europe

Deloitte index of confidence showed as investing units desired by professionals in the field of optimism, having increased by 30 percentage points from its lowest level before six months and showed initial signs of recovery transactions in mergers and acquisitions in Central European region. However, the future economic environment is still cause for concern.
„Governments and central banks have taken unprecedented action to boost the economy and uplift occurred in global markets in recent times suggest that efforts in this direction helps to restore confidence,“ says Garrett Byrne, Leader in the „services transactions in mergers and acquisitions of Deloitte Central Europe. „The report confirms that conclusion, noting that despite the likelihood that the number of transactions and the availability of loan funding to maintain low levels for several months, the participants again demonstrate willingness to consider business opportunities and to undertake projects.
According to Todor Todorov, Deputy Director Department of Corporate Finance of Deloitte Bulgaria, clearly there are signs of revival in the market. „We expect activity to increase during the last quarter of this year. Since the beginning of the year in the country have announced nearly 50 deals with the active participation and funds for equity investment. Of course the quality of assets helps to increased interest, „he says. „An eloquent example is the process for the sale of Devon, which is currently run and attract more than a dozen candidate buyers. Unfortunately, our market is small and not really expect such opportunities every month, supplement expert.
„On the other hand believe that there will be many challenges as a result of corporate restructuring. In the coming months a lot of companies will have to revise its capital structure and to attract investors to strengthen its balance sheet and continue to pursue attractive projects. In most cases, this transaction will be between 2 and 5 million, but I am convinced that this is an opportunity for equity funds to build well-diversified exposure to cyclical industries, which will lead the market in about a year „, said Todor Todorov.
The picture that stands out among the professionals in the field of investment shares, is optimistic in Western Europe and the USA, but still can not say the same for the Central European market of mergers and acquisitions, despite the views of many that the region will face better than others affected by the global economic crisis.
According to participants in the study, the market for mergers and acquisitions in Central Europe is still deeply frozen. However, the expected decline in market activity to stop, only 19 percent of respondents believe that it will continue – a significant change compared with supporting a decrease of 80 percent of the respondents before six months. A clear majority (65 percent) among participants who believe that market activity will not change over the next six months. Central Europe still offers good quality assets, „said Byrne.
„A second wave privatization transactions and evaluations are more attractive compared with their respective Western European alternatives. Despite stagnation among professionals in the field of mergers and acquisitions that occurred over the past six months, now there are signs of returning the focus of portfolio investments day to day to expand the scale in the direction of search and analysis of new investment opportunities, an early sign of recovery in the market.
In addition, the study shows that players in the equity investment transactions with more hope, with 76 percent of them seek more investment opportunities in the forthcoming period – an increase compared to October 2008 when 66% are overlapping this view. Search for „treasures“ of low prices in a difficult financial situation will be a key element for players in the conclusion of transactions for equity investment by the end of 2009
Along with these positive results, more than half (51 percent) of respondents expected to continue deteriorating economic situation in the subsequent period, while 43% believe conditions will remain unchanged. „Although at first glance this is not positive, it still shows a significant improvement compared with the end of 2008, when 92 percent of respondents were pessimistic attitudes about the economic situation and no improvement is expected,“ says Byrne.
According to Byrne main issue that is debated among financiers in the region is „Are we there back?. „Ultimately, only time will tell, and while confidence is still weak, may still be early to revitalize the market of mergers and acquisitions. But judging by the majority of respondents are likely to be already reached the bottom and the worst is behind us, „he supplemented.

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