RBAâs low rates will boost M&A
When the cost of borrowing is so low thanks to central bank bond buying, there is a huge incentive to buy companies that offer steady cash flow from long-duration assets.
Feb 5, 2021 â 12.00am
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The $23 billion in takeover activity swirling around the Australian equity market will be the tip of the iceberg if analysts and bankers are right about the impact of the Reserve Bank of Australiaâs ultra-low interest rates.
RBA governor Philip Lowe wants to ensure the cost of debt remains lower for longer through a $100 billion bond-buying program.
MST senior analyst Hasan Tevfik says the RBAâs financial repression is good for M&A.Â