Aurelia Butler

(Reuters) -Jefferies Financial’s profit more than tripled in the fourth quarter as the investment bank earned higher fees from advising on deals and underwriting activity remained strong, it reported on Wednesday. Ebullient markets, falling interest rates and prospects for lighter regulation under the incoming Trump administration have boosted corporate sentiment toward mergers and acquisitions. Equity and debt offerings also jumped in the second half of 2024. Global investment banking revenue surged 26% to $86.8 billion in 2024, led by North America, which recorded a 33% increase, according to data from Dealogic. Jefferies earned the seventh highest fees across banks over the same period. “What will drive corporate activity, private equity activity and overall investment banking and capital markets activity will be M&A and IPOs,” Brian Friedman, president of Jefferies, told Reuters in an interview. “We are in a positive and increasingly attractive period.”In the fourth quarter, the company’s investment banking revenue soared nearly 73% to $986.8 million, while capital markets revenue rose 34% to $651.7 million. Bankers expect global deal volumes to surpass $4 trillion in 2025, the highest in four years, buoyed by U.S. President-elect Donald Trump’s pledge of less regulation, lower corporate taxes and a broadly pro-business stance. Last month, Goldman Sachs CEO David Solomon said at a Reuters industry conference that dealmaking in equities and M&A could exceed 10-year averages in 2025. Total (EPA:TTEF) revenue at Jefferies came in at $1.96 billion, up from $1.2 billion in the year-ago period. The New York-based bank’s net profit attributable to common shareholders was $205.7 million, or 91 cents per share, for the three months ended Nov. 30. That compares with $65.6 million, or 29 cents per share, a year earlier.Jefferies’ shares, which were up about 1% in trading after the bell, gained 94% in 2024, outperforming larger rivals Goldman Sachs and Morgan Stanley (NYSE:MS) as well as broader equity markets. Jefferies’ earnings are followed closely by analysts and investors as a precursor to big bank earnings, which kick off next week. More

This outlook is based on the anticipation that moderating petrol prices and a more stable naira will lead to a resumption in the disinflation process. However, the firm also cautioned that the CBN would remain cautious due to inflationary risks associated with the government’s fiscal policy.The inflation rate in Nigeria reversed its disinflation trend towards the end of 2024, with headline inflation climbing to 34.9% year-on-year in November, surpassing the peak of 34.2% observed in June. A significant factor in this increase was the over 70% hike in petrol prices since August, driven by fiscal pressures and resulting in broader impacts on consumer prices.The firm predicts that inflation could drop below 20% by the end of the year, which is more optimistic than the consensus estimate of 21.4%.Despite these factors, Capital Economics does not expect inflation to return to single digits in the near term, as it has remained above 10% since 2016. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

Companies are moving quickly to secure their funding before any further rise in borrowing costs. In the first week of the new year, approximately $75 billion of investment-grade rated bond supply has been issued. This figure is set to increase as three more corporate and roughly eight sovereign and supranational bond offerings are expected to be priced on Wednesday, as per data from Informa (LON:INF) Global Markets.Investment-grade rated bonds are priced at a spread premium over risk-free U.S. Treasuries. However, there are concerns that a sell-off in Treasuries and a rise in the dollar could continue to send shockwaves through financial markets. This is due to growing uncertainty over the policies of U.S. President-elect Donald Trump and their potential impact on U.S. interest rate easing.Despite these concerns, investor demand at higher yields has remained strong, putting pressure on corporate credit spreads and in some way neutralizing the impact on funding costs due to higher yields.This combination of rising yields and tightening spreads is expected to benefit both issuers and investors, and keep the current issuance frenzy alive, which is expected to resume after a brief pause.The upcoming abbreviated session on Thursday as a tribute to the late 39th U.S. President Jimmy Carter and the release of jobs data on Friday are expected to slow issuance. Additionally, U.S. companies typically avoid issuing bonds before releasing earnings, which are expected to start rolling in later this week.Bankers anticipate that new bond offerings in January could raise anywhere between $175 billion to $200 billion. If volumes reach $200 billion, it would mark only the fifth time in history that monthly issuance has reached that level, according to Informa Global Markets data.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

However, the corporate sector is facing challenges, with a negative sentiment and declining profitability, which could hinder business investment.The Canadian economic landscape is further complicated by potential U.S. tariffs and political uncertainty following Prime Minister Trudeau’s resignation. Wells Fargo anticipates that U.S. imports from Canada may be subject to a 5% tariff starting mid-year, adding to the challenges for Canadian exports and investment.Despite these factors, Wells Fargo expects a slight improvement in Canada’s GDP growth, projecting an increase to 1.7% in 2025 from the estimated 1.3% in 2024. However, the risks lean towards a slower recovery than anticipated.Inflation in Canada remains contained, with domestic inflation slowing and labor cost pressures easing. This environment, according to Wells Fargo, should allow the Bank of Canada to continue reducing policy interest rates in the upcoming meetings.Wells Fargo forecasts a series of rate cuts by the Bank of Canada, with a reduction of 25 basis points each in January, March, April, and June. This would bring the policy rate down to 2.25%, which is at the lower end of the neutral policy rate range. The firm also suggests that sluggish growth and cautious policy easing by the Federal Reserve could result in the Canadian dollar remaining weak over the medium term.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More