Predictions for sectors during the recession

The recession, officially announced today, will impact across many sectors.

"The early part of 2009 will be notable for consolidation in the retail sector, particularly distressed deals involving chains that are badly hit by a poor Christmas trading period and the quarterly rent roll. This will largely be a mid-market trend, with financial services consolidation continuing in the upper-market within jurisdictions heavily exposed to the credit crunch.

"The energy efficiency sector will continue to be attractive to both private equity and corporate investors. Transactions in the oil and gas exploration space will decline considerably if oil prices remain at the current reduced level, it being cheaper to purchase companies with existing deposits.

"The collapse in the banking sector is unlikely to recover in the short term as we return to a more balanced FTSE 100. In the 1970's I do not think that there were any banks that would have qualified to be in the FTSE 100 and this is likely to be the case with the recession today.

"As the money supply into the economy across the globe increases in an attempt to combat the credit crisis, gold and other precious metals will see strong recoveries. Gold may yet get back to the peak of nearly ,000 an ounce, last seen in December 2007.

"The decline of sterling against the US dollar and Euro is likely to make UK acquisitions more attractive to well-capitalised corporates in the US and across the Continent. When combined with the weak UK public markets, this may also lead to increased public company M&A and possibly higher volumes of hostile takeovers."