Global markets start 2017 on firm footing

Oil, gold and base metal prices advance as signs of solid factory growth in China and Europe give global manufacturing sector a solid boost heading into the new year


The dollar resumed its climb after last week’s stumble, and both Asian and European stocks rose after the New Year holiday. Photo: Reuters
The dollar resumed its climb after last week’s stumble, and both Asian and European stocks rose after the New Year holiday. Photo: Reuters

Global markets marched confidently into 2017 on Tuesday.

The dollar resumed its climb after last week’s stumble, and both Asian and European stocks rose after the New Year holiday, according to a Reuters report.

Oil, gold and base metal prices also advanced, as signs of solid factory growth in China and Europe gave the global manufacturing sector a solid boost heading into the new year, it said.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6% as most regional markets reopened after the New Year holiday.

It ended 2016 with a 3.7% gain, its best year in four. Australian shares were the region’s best performers, closing up 1.2%. Hong Kong’s Hang Seng rose 0.7%. In China, the Shanghai Composite climbed 1%.

China was Asia’s worst performing major stock market in 2016 with an 11.3% loss in its worst year in five.

A private business survey showed China’s factory activity picked up more than expected in December as demand accelerated, with output reaching a near six-year high, added the Reuters report.

India M&As hit an all-time high in deal value

The value of announced mergers and acquisitions (M&As) deals involving Indian companies reached an all-time high at $72.4 billion in 2016, up 97.1% compared to 2015, according to data collated by Thomson Reuters.

This is the highest-ever annual period for overall Indian announced M&As in terms of deal value, surpassing the annual record set in 2007 ($67 billion), driven by industry consolidation, restructuring and asset sales. The number of deals grew only 0.8% compared to 2015.

But in value terms, M&A deals last year surpassed the cumulative deal activity of the past two years. The largest deal last year was the acquisition of Essar Oil Ltd by Rosneft and a consortium of other investors.

Domestic M&As witnessed the best-ever annual period on record in terms of deal value with $28.2 billion, up 186.2% from 2015.

The number of deals grew 8.3%. Total cross-border M&As amounted to $42.8 billion, driven by a 75.3% and 69.7% increase in inbound and outbound M&A activity, respectively, from 2015.

Rupee bond issuances reach record high

In 2016, Indian rupee-denominated bond proceeds amounted to Rs3.3 trillion, which is an annual record high, according to Thomson Reuters.

That represents a 14.7% increase in proceeds compared to 2015. “The Financials sector accounted for 66.8% of the Indian Rupee bonds market with Rs2.2 trillion, up 11.9% in proceeds from a year ago (Rs2.0 trillion),” pointed out Thomson Reuters.

Energy and power followed behind in the second place with 11.1% market share and raised Rs366.9 billion, a 21.6% increase over last year. Government and agencies ended up at the third place with 9.5% market share worth Rs319.9 billion, up 74.8% from last year.

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