Reuters releases investment banking outlook

The annual Thomson Reuters/Freeman Consulting 2014 Outlook for Investment Banking Services has been released, offering a number of interesting insights into how the market is developing across the globe.

According to the influential report, which is widely respected across the industry as a barometer, regulation and taxes remain a major issue for European executives, highlighting the impact of the scandals that emerged over 2013.

However, optimism remains relatively good among respondents, who seem to feel that economic conditions will become more favourable over the course of the next 12 months.

Companies' "bottom two concerns this year were obtaining capital and refinancing debt -
reflecting low rates and booming demand for corporate debt among institutional investors", said the report.

In Europe, 90 per cent of firms feel increasing revenue growth should be a top industry priority, while 60 per cent hope to become more profitable. Some 35 per cent of European businesses are hoping to bring in new talent in 2014, meaning job-seekers should enjoy a relatively buoyant situation.

This is up from 19 per cent in 2013, underlining the increase in positivity seen through Reuters' report.

Some 65 per cent of respondents from the Europe, Middle East and Africa region are forecasting growth for 2014, compared to just 43 per cent last year. Asia is also optimistic, although firms in the Americas proved somewhat less positive about their chances.

This is different in the mergers and acquisitions (M&A) sector, however, where North America appears to offer the most compelling opportunities for investors.

M&A volumes look set to recover strongly after a poor haul in 2013, with financials leading the way alongside media and telecoms as the two healthiest sectors.

Overall, revenue growth is expected to out-strip profit growth in all regions, implying that the recessionary attempts to curb spending and focus on overall security could be on their way out at last.

As positivity spreads about the UK's economic growth, investment banks appear to be looking forward to a better performance in 2014.