2022 wasn’t the best year for the markets. Especially for US indexes, it was the worst year since 2008. As for Europe, it was the worst year since 2018. Behind this scene, there are multiple economic, political, and financial reasons that every one of us has read, watched, or even experienced. This year’s winning sector was clearly the energy sector. With a climbing rate of 59%. This can be attributed to the economic recovery from the COVID-19 crisis and the limited supply from Russia due to the ongoing war with Ukraine. On the other hand, the worst-performing sector was communication services. In S&P 500 falling more than 40%.
A big topic in 2022 was inflation. We entered 2022 with high inflation levels, and they did not slow down during 2022. One of the reasons for the high inflation rates is thought to be the fact that the world economy was still recovering from COVID-19 which closed down many economies. Restarting these economies and global supply chains takes a long time. Due to this process, prices have risen. Then in February 2022 Russia invaded Ukraine. With the economy in such a weak state already, this has made the problem worse. Russia is a large supplier of oil, while Ukraine is a large exporter of food. Since the war has made exports from these countries difficult, shortages have arisen leading to increasing prices, leading to higher inflation.
The final market status was generally in red, accordingly, the Dow Jones Industrial Average closed 2022 down 8.78%, S&P 500 finished 2022 down 19.44%, the Nasdaq composite finished 2022 down 33.10%, and Pan-European Stoxx 600 index closed 2022 down 12.76%.
When we look back at 2022, and the 5 highest bids for mergers and acquisitions, we can start with the fifth highest one Progolis' acquisition of Duke Reality. The biggest two global logistics companies made a deal worth $26 billion.
The fourth highest place goes to Oracle’s acquisition of Cerner. Oracle is one of the biggest software companies in the world and Cerner is a health information supplier. This deal was worth $28.3 billion, which is also the biggest completed digital health sector deal.
In third place, there is one of the most resounding deals; Elon Musk’s acquisition of Twitter. It was a very controversial deal and there are still doubts about the future of the social media platform. The process was also painful, as the parties got to the point where they sued each other. However, in the end, the deal was made, and Twitter was sold for $44 billion.
The second highest bid was Broadcom's acquisition of VMware for $61 billion. Broadcom is a chip giant and VMware is a software company. However, the cultural differences between both companies weren’t appreciated by the market. Consequently, the Broadcom stocks fell almost 20%.
Finally, the highest bid of 2022, making it the most expensive gaming industry deal, was made between Microsoft and Activation Blizzard for $68.7 billion. It was a step for Microsoft to enter the gaming industry as one of the biggest gaming companies in the world.
Flow Traders Investment Competition Update
First of all, I want to wish every one of you all the best for 2023! Now that 2023 has started, almost every Investment Group is now taking part in the Investment Competition. The top of the competition remains unchanged with Metrics Fund still leading the competition with a M2 of 3.76%, and Aurelia on a second place with a M2 of 2.08%. Four groups that have made their first trade got impressive results, rising more than 20 places in one week. Andromeda, Zilvervloot Investeerders, Brut Investments and Batavia Investments congratulations! What a great way to start the new year. At the bottom of the competition we can still find CFQ, I hope for them they can make the “new year, new me” happen and finally rise some places in 2023.