The volume of M&A transactions for the Asia Pacific region accounted for $A1.4 trillion, making up 28 per cent of global activity in the last 12 months according to Bloomberg data.
"Make sure you stick to your own asset valuations. Now is not the time to significantly change your risk appetite.” – Tammy Medard
According to ANZ Managing Director for Institutional Australia Tammy Medard, the ongoing pandemic has not dampened demand for growth opportunities.
“We are always ready and keen to support our customers as they navigate growth opportunities or difficult times,” Medard says. “Our approach focuses on building trust with our customers so they are comfortable to involve us early in a transaction to get the right deal structure in place.”
The surge in deal activity is right across the institutional and mid-market segments according to Medard. However, she warns strong liquidity in both equity and debt markets could have an inflationary effect on asset prices.
“The message to customers is make sure you stick to your own asset valuations,” she says. “Now is not the time to significantly change your risk appetite.
“If we start seeing a fear of missing out - which we're not seeing yet and I hope we don't see - and we start seeing assets go for multiples that are unsustainable, that's what would make me nervous.”
Medard says ANZ has not received requests from companies for additional liquidity this year and this compares with last year when firms requested additional loans to help them trade through the outbreak of COVID-19.
“We're not seeing the borrowings to the levels that we would have expected,” says Medard. “Certainly this time last year, we saw a lot of shoring up of funds and really strengthening balance sheets just in case.”