The road to recovery

We may have heard that story before, but analysts are now touting round the line that what has become one of the longest bear markets in memory is over and corporate financiers could be about to see the return of their livelihood.

And we are not talking about ghosts or anecdotes, the evidence is there to see in black and white. And what is it? Well, it is what appears to be a rejuvenated FTSE-100. The past couple of weeks has seen the main index rally and climb back to a position close to the 4,000 mark.

According to Richard Crossley, technical strategist at Teather and Greenwood, the market cannot fall any further than it already has and stabilisation is around the 3,980 level.

This is good news for corporate financiers because transaction volumes are also up, which means the big institutions have resumed their trading in shares. If they do that it becomes viable to raise money for investment in the markets again. No small amount of relief for corporate financiers who have seen the IPO market die in recent times.

This, according to the analysts, is likely to affect the mid-cap companies first – those hit hardest by the fall in share prices.

Cynics will argue this is all a little too optimistic. But if there’s something the corporate finance sector needs right now it’s optimism, however thin it might be.

  • Gavin Hinks, news editor of Accountancy Age.

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