Proxies for the global economy upturn

After the failures during the 1999-2000 period and the effects of global corporate scandals, the IPO market (Initial Public Offering) specially in the Pacific Rim is growing at a fast pace; if this trend continues, 2004 is expected to end with $ 75 billion in new IPOs compared to $45 billion recorded in 2003. This is a good sign for fresh money coming from investors because the IPOs fever is said to be correlated with market peaks.

The M&A (Merge & Acquisition) activity also shows a big deal of improvement during March, especially on overseas transactions, with Q1 activity mainly concentrated on Euroland and Emerging Markets (i.e Telefonica offer to acquire BellSouth Latin America, and BBVA to acquire Bancomer).

Similarly, if we look into corporate performance we find global and diversified companies such as GE that recently posted better than expected earnings (of 32 cents per share), with sales coming mainly industrial orders. Immelt (GE CEO) says that future is bright and GE expects double digit earnings next year. Clearly, we are not taking these facts as proxies for global economic improvement, but we must said that something is already happening, despite of the lack of strength of some fundamentals for large economies around the globe.