Morgan Stanley writes on European equities this morning, highlighting the potential for accelerating M&A activity on the continent. The bank’s analysts say that:

” Europe is benefiting from the global M&A upswing. Our team lays out a compelling
case for a continued recovery in global M&A volumes from still well below cycle-average
or peak levels. Indeed, our US banks team estimates global M&A to increase by 32%Y this
year, 20%Y next year, and reach $7.8 trillion in 2027. Europe saw early momentum in the
cycle recovery compared to the US, but at this stage we see the pace of momentum
favouring the US, in part on easing regulation. A key driver behind gradually easing
European Competition Commission rules has been the need for more national or
European champions within Europe, more capable of competing globally. Hence, we
believe this drive to better compete globally as global M&A picks up will in turn fuel more
European and UK M&A.”