Jefferies CEO sees capital markets improving in second half of the year

By Lananh Nguyen and Nupur Anand

NEW YORK, March 1 (Reuters) – Investment bank Jefferies Financial Group expects capital markets to improve in the second half of 2023, Chief Executive Officer Richard Handler and President Brian Friedman said in a letter to clients and employees on Wednesday.

“The capital markets will resume financing companies and new deals in a moderately healthy manner” around the middle or end of this year, the executives wrote in a letter seen by Reuters.

Still, they cited uncertainties hanging over financial markets, including interest rates, the pandemic and geopolitical tension.

Wall Street closed out February on a sluggish note as investors stayed cautious, weighing the Federal Reserve’s path of rate increases.

U.S. consumer confidence also unexpectedly fell in February.

Despite their upbeat projections, Handler and Friedman also said weaker companies would be forced to restructure in a tougher market environment.

“We don’t think this will happen to a ton of companies, as we believe the economy remains healthy enough and the list of troubled over-leveraged companies is not as severe as past cycles,” the duo said.

The bank reported a 52.5% decline in its fourth-quarter profit as underwriting fees fell. (Reporting by Nupur Anand and Lananh Nguyen in New York; Editing by Christopher Cushing)

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