Let’s start the year with a little optimism – 2013 could be good for investment banks. Now that the drama around the impeding fiscal cliff in the US has been concluded (and before everyone starts picking holes in the deal) equity markets have rallied across the world.
Bank stocks, in particular, have benefited and – as Alphaville points out – much of this is down to a tentative optimism around investment banks’ trading and advisory functions.
As SocGen analyst, Dirk Hoffmann-Becking, points out, less political uncertainty means an end to ‘risk on-risk off’ trading patterns, where stock prices respond to global economic activity, and could in turn boost trading volumes.
The more stable trading environment could also release pent up demand for M&A and ECM deals, which have been held back for the last five years, he says. “Resolution of the fiscal cliff could be a major positive for investment banks with large US operations (BARC, DBK, CS).”
Goldman’s Lloyd Blankfein and David Viniar made $4.2m each by cashing in stock options on New Year’s Eve (Telegraph)
Just 57% of M&A deals announced in Asia in 2012 were actually completed. Investment bankers should be busy for the first few months of 2013 (Wall Street Journal)
1,500 UK bankers earned an average of £1m in 2011 (Guardian)
The Treasury will get £170m from banking sector fines (Telegraph)
Further proof that hedge fund managers are not super-human (Financial Times)
Not a good start to 2013 for the LSE – a 90 minute technical glitch (Financial Times)
If you earn more than $400k in the US, your tax rate will rise to 39.6% (Wall Street Journal)