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Like Stocks, IPO and M&A Markets Slow to 2011 Lows

Stocks in this article: GS MS JPM C BAC CS DB BCS UBS KKR BX MHS ESRX

As a result of earlier deal-making gains, global investment banking revenue reached $55.2 billion for the first nine months of the year, up 14% from 2010. The data will be of little solace to investors who have been selling investment banks shares throughout the summer and fall. Third-quarter investment bank revenue was the lowest total since the first quarter of 2009 when markets and bank shares were at the nadir of the financial crisis.

In M&A markets, technology-related deal making was done at a roughly 34% premium, the highest of any sector according to Dealogic. Meanwhile, for IPOs, the first-day performance of newly public shares averaged out at a 22% gain in the third quarter, lower than the average 34% gain companies recorded in first-day trading at this time last year.

So far this year, real estate-tied mergers have led the way with $209.5 billion in takeovers recorded, almost 10% of the overall global M&A market and the first time it has been the leading merger sector. Mergers in the sector have grown at 32%, which was eclipsed only by the technology, chemicals and construction sectors that posted 40% gains year-over-year in 2011. Finance, telecom and oil and gas companies are the only areas where mergers are below levels reported a year ago.

The United States was the top deal country for M&A with $819.1 billion in mergers announced in 2011, roughly 38% of the overall market. Domestic M&A reached its highest level since the recession, growing at a 21% clip in the first nine months of the year. Healthcare was the largest sector for U.S. mergers after Express Scripts (ESRX) paid $29.1 billion for Medco Health Solutions (MHS) in July; the largest deal of the quarter and since March.

In the IPO markets, the Americas regained the no. 2 overall spot with a 31% market share, well below the 49% share that Asia-Pacific holds. In previous quarters this year, more than 80% of IPOs were done in the Asia-Pacific region.

-- Written by Antoine Gara in New York

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