One of the key supporting factors behind the current bull market has been the phenomenal growth in corporate activity. Confronted by an increasingly competitive landscape, companies are entering into corporate marriages at such an electrifying pace that the current level of global mergers and acquisitions stands at five times those recorded in the early 1980s.

Underpinning this trend is the universal ambition of corporate management to enhance shareholder value. Providing an obvious investment alternative to internal growth, it is widely argued that mergers and acquisitions can enhance the value of core businesses by accentuating the strengths of separate entities, while simultaneously benefiting from the elimination of uneconomical duplications.

Benefits such as economies of scale, improved competitive positions and substantial cost synergies are typically cited as the rationale for such activity.

However, basic corporate survival quite often provides the impetus, as corporates attempt to counteract specific business threats or more general trends such as global trends and deregulation.

Not confined to any one industry, this boom has spread right across the corporate spectrum. Mega-mergers have proved a prominent feature of the past 12 months, as premier players in sectors such as telecoms, pharmaceuticals, oil and banking strive to achieve greater scale.

Even since the beginning of Sharetrack, corporate activity (rumoured or otherwise) has surrounded numerous blue chip companies, including Glaxo Wellcome, Barclays, Deutsche Telekom and AIB.

Ranked amongst the top three Sharetrack performers, BOC and Powerscreen provide clear signals of the share price benefits from sourcing companies under the mergers and acquisitions spotlight. However, a dangerous assumption is that the market will always applaud the merits of mergers, especially since such deals often fail to enhance value, the recent results of Glanbia being a possible case in point.

Indeed, investor recognition that mergers and acquisitions are no substitute for genuine growth may to some extent explain the market's poor reaction to Bank of Ireland's proposed venture with Alliance & Leicester. Undoubtedly, pulsations in the stock market will continue to emanate from such activity. As a Sharetrack investor with a short-term price perspective, the key to capitalising on this trend is not just to find, but pre-empt, the pulse.

Elan is the latest company to announce a two-for-one share split which took effect on June 7th.

Laura De Voy works as a researcher in the private client department of Goodbody Stockbrokers. Goodbody acts as broker to Powerscreen.