Readings: US to get LBO-ed?, BRIC gains, REITs in India
- WSJ Online: The Deal Story of 2008: Will the U.S. Get LBOed?
. . . the mergers-and-acquisitions story of 2008 will be how these foreign sovereign funds — sitting on an estimated $2 to $3 trillion of reserves – direct their appetites. Fattened by the U.S.’s own trade imbalances and encouraged by favorable currency rates, they aren’t likely to stay so compliant for long. Further down the buffet line sit entire U.S. companies.
For 2007, foreign buyers have accounted for 20% of M&A in the U.S., according to Dealogic, the second-highest level since 1995.
In Wall Street parlance, they call it getting LBOed. “We’re moving to a sharecropper economy”.
Note that India doesn’t show up in the mega-SWF lists, yet. But Mr Reddy & Mr Chidambaram will have to find some use for forex reserves of $250B+ and counting. Just a $5B infrastructure fund won’t cut it.
- Via The Kirk Report, Barron’s Online: Emerging Markets’ Gains Are Long in Tooth
Despite the Chinese portion tumbling this month, the BRIC ETF is still holding its own. It does not take much detective work to learn that at least one of the other represented countries is staying strong and indeed it is Brazil that is compensating for China.
Just as investors were carefully watching Chinese stocks and the tech high flyers last month as they were holding up the broad market, all stock investors, and not just those playing emerging markets, should be watching Brazil now. If and when that market gives up the ghost then there will be nothing left to prop up the entire sector, at least in the short-term.
The “I” in BRIC is India. Our market indices have been recently muddling through, at best.
- Business Standard: Real estate investment trust in India soon
At a conference at the Bombay Stock Exchange (BSE) Damodaran said that rules on trading securitised debt would be ready by December 2007. About 30 companies are eligible to raise funds selling shares under fast-track approval procedures.
Without divulging concrete figures, the regulator said that foreign investors had submitted large numbers of applications to register in India.
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