Aussie firms use derivatives to build hidden M&A positions

M&A is back on the menu for Australia corporates and a spike in takeover deals has been characterised by the use of derivatives to build up significant positions without having to disclose these to competition authorities – a move that has proved controversial

Low volatility across all asset classes has led to a tough year for Asia foreign exchange and interest rate dealers, but their colleagues across banks' Chinese walls are having a better time. Mergers and acquisitions (M&A) desks have been busy, with the focus of activity on China and Australia.

Australian M&A activity is up 92% year-on-year in the period up to August 2014 to $83.4 billion, while the broader Asia-Pacific region has seen volumes increase by 63% to $463 billion year-on-year