JPMorgan Chase & Co.’s head of global banking, Carlos Hernandez, said companies are only just beginning to “test out the limits of what is possible” for new stock sales and deals, driven by the strength of the world economy.
“If economic fundamentals continue as they are now, next year the price of equities will continue to increase, the size of deals will continue to increase, and though interest rates are rising they are still benign on a historic basis,” Hernandez said in an interview in Dubai on Sunday. “The global economy is the best it’s been since 2007.”
Hernandez said that only a few years ago, deals over $100 billion weren’t considered possible. And while people had been expecting the market to correct after setting records this year, he said conditions were favorable for the good times to continue.
In the Middle East, Hernandez said JPMorgan’s business is doing “very well” as governments in the region look to diversify their funding away from a reliance on oil. Hernandez declined to comment on the arrests of senior princes, ministers and businessmen in a sweeping crackdown by Saudi Arabia’s Crown Prince Mohammed Bin Salman. Hernandez said the opportunities in the country for investors were “huge” and couldn’t be ignored.
Almost every government in the Middle East “has tapped the bond markets, and that presented an opportunity for banks like us,” he added. “Everybody is looking at the region and saying if Saudi Arabia and the United Arab Emirates are doing these privatizations, that is a huge opportunity.”
His bullish comments follow those of Citigroup Inc.’s head of capital markets origination, Tyler Dickson, who last month said he expects outstanding times to continue for new stock and bond sales. In M&A, Broadcom Ltd.’s $105 billion plan to buy Qualcomm Inc. would mark the biggest ever technology deal.
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