Citi CEO Jane Fraser Expects Continued Deal Momentum, More Measured Second Half Ahead

Global Economy Sees Surge in Mergers and Acquisitions Amid Rapid Technological Shifts

Citigroup Chief Executive Officer Jane Fraser emphasized the increasing trend of companies opting for acquisitions over internal growth as industries adapt to rapid technological advancements, particularly in artificial intelligence. Fraser made these comments during the Citi's India Investor Conference in Mumbai on Thursday.

Fraser noted that the pace of change across various industries has made mergers and acquisitions a more attractive option for companies seeking new capabilities and scale. This shift in strategy has been driven by the need for companies to quickly adapt to the rapidly changing business landscape. As a result, the pace of M&A activity has accelerated, with companies finding it more cost-effective to acquire new capabilities rather than building them internally.

Companies have played a crucial role in maintaining the resilience of the global economy in recent years. They have adapted to supply chain disruptions, maintained balance-sheet flexibility, and diversified their earnings streams amidst various challenges. This adaptability has enabled companies to navigate the complexities of the global economy and maintain their competitiveness.

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Fraser also highlighted the significance of capital raising activity, as companies continue to invest in growth, capital expenditure, and infrastructure. This investment is crucial for driving economic growth and development. The availability of capital remains strong, with significant buffers in place to support companies in the face of uncertainty.

Despite the ongoing geopolitical developments, particularly in the Middle East, Fraser expressed optimism about the global economy. However, she cautioned that the second half of the year may see a slight slowdown in activity due to ongoing tensions. Nevertheless, Fraser emphasized that significant capital remains available for deployment, with investors continuing to see long-term opportunities despite near-term uncertainties.

Fraser also pushed back against the notion that globalization is retreating, arguing that global trade and investment flows are evolving and becoming more complex. She pointed to emerging economic corridors, including growing links between India and Latin America, as well as stronger connectivity between India and the Gulf region. These developments demonstrate the ongoing importance of globalization and its potential for growth and development.

In conclusion, Fraser reiterated her positive view on India, describing the country as one of Citi's most important markets globally. Despite short-term challenges, the country's long-term growth story remains intact, driven by its strong economic fundamentals and growing connectivity with other regions.

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Note: The above table shows the growth rates for India, Latin America, and the Gulf Region for 2023 and 2022.