Dec 19 Reuters Stronger AsiaPacific mergers and acquisitions activity next year depends on improving macroeconomic conditions, after 2022 deals were held at eightyear lows by financing costs, weak equity markets and China39;s pandemic controls, dealmakers said.

Deals are set to revive slowly as companies and funds watch out for easier macroeconomic conditions, they said. Hopes that Chinese companies will return to the market have strengthened.

We expect more certainty around interest rates, inflation, geopolitics and the commodities cycle to emerge from the second quarter onwards, said Raghav Maliah, Hong Kongbased global vicechairman of Goldman Sachs39;s investment banking division.

This will provide a more stable backdrop for the return of a more robust MA market, said Maliah.

Deals involving AsiaPacific companies from Jan. 1 to Dec. 15 were valued at 1 trillion, down 41 from 202139;s fullyear number and set to be the lowest since 2014, preliminary Refinitiv data showed. Deals in private equity, a major MA driver, amounted to 139 billion as of Dec. 15, down 52 on all of 2021.

Globally, record rises in U.S interest rates coupled with the RussiaUkraine war, which sparked a selloff in commodities and public equities markets, have battered transactions. Buyers are struggling to obtain leverage financing, which is especially crucial for buyout deals, dealmakers said.

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