M&A is set to continue despite difficult times

ON EUROPE

F&C's Sam Cosh says small and mid caps look attractive thanks to the emphasis towards M&A in the region.

A period of abundant liquidity, exceptional margin expansion and the resulting earnings growth is now coming to an end. Growing earnings will become a more significant challenge for many companies globally, as they will now have to rely more on revenue growth which will be harder to come by in an environment of anaemic economic growth. The challenge is further compounded by the rising cost of capital. This will not simply be as a result of higher policy rates, which will inevitably occur at some point in the near future, but due arguably to more important components of capital costs such...