AGL 40.20 Decreased By ▼ -1.30 (-3.13%)
AIRLINK 129.11 Increased By ▲ 1.11 (0.87%)
BOP 6.60 Increased By ▲ 0.34 (5.43%)
CNERGY 4.03 Decreased By ▼ -0.10 (-2.42%)
DCL 8.45 Increased By ▲ 0.01 (0.12%)
DFML 41.25 Increased By ▲ 0.56 (1.38%)
DGKC 87.00 Decreased By ▼ -0.90 (-1.02%)
FCCL 33.35 Decreased By ▼ -0.75 (-2.2%)
FFBL 65.90 Decreased By ▼ -0.43 (-0.65%)
FFL 10.54 Decreased By ▼ -0.02 (-0.19%)
HUBC 110.70 Increased By ▲ 2.00 (1.84%)
HUMNL 15.23 Increased By ▲ 0.77 (5.33%)
KEL 4.78 Increased By ▲ 0.13 (2.8%)
KOSM 7.83 Increased By ▲ 0.50 (6.82%)
MLCF 41.90 Decreased By ▼ -0.82 (-1.92%)
NBP 60.50 Decreased By ▼ -0.34 (-0.56%)
OGDC 182.80 Increased By ▲ 3.83 (2.14%)
PAEL 25.36 Decreased By ▼ -0.34 (-1.32%)
PIBTL 6.26 Increased By ▲ 0.20 (3.3%)
PPL 147.81 Increased By ▲ 1.66 (1.14%)
PRL 24.56 Decreased By ▼ -0.35 (-1.41%)
PTC 16.24 Increased By ▲ 0.10 (0.62%)
SEARL 70.50 Increased By ▲ 0.30 (0.43%)
TELE 7.30 Increased By ▲ 0.08 (1.11%)
TOMCL 36.30 Increased By ▲ 0.10 (0.28%)
TPLP 7.85 Increased By ▲ 0.01 (0.13%)
TREET 15.30 Decreased By ▼ -0.29 (-1.86%)
TRG 51.70 Increased By ▲ 1.34 (2.66%)
UNITY 27.35 Increased By ▲ 0.45 (1.67%)
WTL 1.23 Decreased By ▼ -0.01 (-0.81%)
BR100 9,842 Increased By 47.4 (0.48%)
BR30 30,036 Increased By 389.6 (1.31%)
KSE100 92,520 Increased By 499.1 (0.54%)
KSE30 28,786 Increased By 121.7 (0.42%)

Global equity raising rose by almost a fifth in 2017 and bankers expect issuance to increase further in 2018 as the improving global economy and buoyant stock markets drive larger flotations and rights issues to finance acquisitions. Companies raised $780.2 billion in equity in 2017, up 19 percent from $656.4 billion last year, Thomson Reuters Equity Capital Markets (ECM) data up to Dec. 26 showed.
Global proceeds from initial public share offerings (IPOs) rose by 35 percent to $178.6 billion in 2017. However, overall issues and the global IPO market fell short of 2014-15 cycle peaks. European bank rights issues continued to dominate equity capital raising in 2017, with UniCredit, Deutsche Bank, Credit Suisse and Banco Santander collectively raising almost $35 billion. The biggest 2017 IPO was Snap Inc in the United States which raised $3.9 billion in March.
"We expect volume to be higher in 2018 but the composition will probably be different. The cycle of balance sheet repair is coming to an end and instead we're going to see larger IPOs, spin-offs and some rights issues to finance acquisitions," said Craig Coben, head of global Equity Capital Markets (ECM) at Bank of America Merrill Lynch.
Among the big ticket issues, bankers continued to look to the potential listing of US tech unicorns - companies that have achieved a $1 billion valuation without tapping the stock markets - such as Uber and Airbnb. In Europe, a large rights issue to help Bayer fund its planned $66 billion takeover of Monsanto was anticipated.
"There could be other geopolitical shocks but those things aside and assuming continued low volatility, we expect issuance to be higher next year," Coben said. Shrugging off tensions between the United States and Russia and North Korea, as well as protracted conflicts in the Middle East, the CBOE Volatility Index, or VIX, continued to hover around all-time record lows at the end of 2017.
Buoyant commodity prices alongside a pullback in US bond yields and the dollar propelled world stocks to new record highs on Thursday, signalling the rally would likely extend into 2018. Investment bankers also said they expected the return of emerging market issuance, highlighting Brazil, Turkey and Russia among resurgent markets.
Morgan Stanley rose to the top of the league table for global ECM issuance overall and global IPOs, despite JP Morgan coming top in Europe and Americas. Growth in equity raising for British companies lagged behind their European counterparts in part because of worry over Britain's future economic relationship with Europe.
British companies raised 2.5 percent more equity in 2017 compared to 2016, while German companies, for example, more than doubled their issuance. Against a backdrop of record highs for the main London index, a series of cancelled listings contributed to investor angst.
"Investors are approaching UK domestic businesses with a note of caution. But it's a case-by-case issue," said Ken Robins, head of ECM in Europe, Middle East and Africa at ?Citi. "There is going to be scrutiny. But the U.K. is going to see multinational listings," Suneel Hargunani, Citi's head of syndicate ECM in the region, added.

Comments

Comments are closed.