Huge cash buffers, together with cheap and plentiful financing, are fuelling a merger and acquisition boom that has delivered sizeable windfalls for investors. To sustain these gains, however, real economic growth will need to materialise from what, at least so far, remains a phenomenon dominated by financial engineering and mostly short-term objective maximisation.
The numbers are unambiguous. After a hyper-cautious period triggered by the trauma of the 2008 global financial crisis, companies are increasingly putting their record cash holdings to work – so much so that the herd instinct has shifted from prudent accumulation to concern about being seen to be just sitting lazily on cash. Read more