KPMG Corporate Finance has forecast that the fall in global merger and acquisition activity (M&A) will continue into the second half of 2008.

“Our findings reveal strong evidence that market conditions for M&A transactions will continue to deteriorate,' commented Stephen Barrett, global chair, KPMG’s corporate finance practice.

'We had hoped that the gradual decline seen earlier this year could be maintained but now all indicators are pointing at a marked fall in the market, across all regions and sectors,” he added.

KPMG  warns that:

• Further reductions are likely to occur in levels of both deal value and volume, with KPMG’s forward looking corporate valuations down 10 per cent compared to six months ago

• Previous pockets of regional resistance are likely to give way to broad-based fall in deals across all regions and sectors

• All regions except Latin America have shown a fall in their respective forward PE Ratios

• Most rapid fall predicted for Africa and the Middle East

• Whilst balance sheet capacity remains robust, the predictor is showing deterioration in net debt to EBITDA ratios across the board

'However, balance sheets have deteriorated overall. Prospects of a speedy recovery look decidedly weak,” he concluded.- TradeArabia News Service