Announced M&A volumes of $40.7bn were down -26% from last week. So far, quarter to date, M&A volumes are averaging +11% above last quarters levels.
Sandler O’Neill’s Weekly M&A Trends:
Equity markets declined on higher volume
- The S&P 500 declined by 3% and the Russell 2000 growth index declined by 4.2% in the week. Quarter to date the S&P 500 has declined by 9.3% and the Russell 2000 growth index has declined by 11.9%.
- Average daily U.S. equity trading volumes increased by 11.5% in the week. Quarter to date volumes are now 1% higher than the 1Q12 average. Average daily U.S. volumes reflect the total number of shares traded on Tape A, Tape B, and Tape C in millions.
- Equity mutual funds experienced net outflows of $7 billion in the week according to ICI data (on a one week lag). Flows have now been negative in twelve out of the previous thirteen weeks.
- Volatility, measured by the average CBOE VIX, rose by 8.8% to 24.0, and the DB currency VIX rose by 5.3% to 12.3.
Investment banking activity was weaker across the board
- Equity underwriting volumes of $9.6 billion declined by 23% from the prior week’s level. Quarter to date, equity underwriting volumes are averaging 17% below the 1Q12 weekly average. We note that there have been no IPO pricings since Facebook’s $16 billion IPO on May 18. Note: prior weeks are subject to revisions.
- Corporate debt underwriting volumes of $45.8 billion declined by 20% from the prior week. Quarter to date, corporate debt underwriting volumes are averaging 38% below the strong 1Q12 weekly average.
- Announced M&A volumes of $40.7 billion declined by 26% from the prior week. Quarter to date, announced M&A volumes are averaging 11% above the 1Q12 weekly average.
- Completed M&A volumes of $24.5 billion declined by 62% from the prior week. Quarter to date, completed M&A volumes are averaging 18% above the 1Q12 weekly average.