A Settled Outlook?

With the end of the first quarter of this financial year, and a Budget just around the corner, it is perhaps time both to take stock and to look forward.

For Kepstorn, it has been the busiest quarter of M&A activity since the firm was founded in October, 2007. No fewer than three acquisitions, a sale and a solvent re-financing have all completed in the last six weeks alone. In the pipeline are no less than three venture capital funds and Donald Stewart in London is also working on a multi-million dollar private equity fund involving one of the richest players in world finance. Who said that the run-up to the summer was always quiet?!

On the down side there is, of course, the continued farce of the Greek bailout – a truly Greek tragedy, played out on the world stage. What seems to have avoided the main headlines for the moment, however, is the by-far greater threat of the collapse of the Chinese stock market. Both the Shanghai and Shenzhen indexes have fallen by over one third in less than a month and more than one third of companies listed on the Shanghai and Shenzhen exchanges have had their shares suspended.

The contraction (or less than full-blooded growth, depending upon whose figures you believe) in the Chinese economy has not only had a detrimental effect on commodity prices (and the emerging markets that supply them) over the last few months but threatens to hit the wider world economy as well.

On the upside, however, the US economy is powering ahead and the UK economy, subject to the threat of European headwinds, does also seem to be growing and prospering. The US economy has always been a major engine of sustained growth, pulling in, as it does, finished goods rather than just the raw materials. With its return to health, not least galvanised by the effect that its huge shale oil and gas reserves are having on the world oil price, we will hopefully see sustained growth, despite all the travails of the Euro zone.

All-in-all, the next quarter is looking more positive than not – onwards and upwards! I hope that you have a great summer, if only the weather would also settle down into a rising trend in temperature.

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