Bankers cautious on outlook for global equity deals after 2016 slide

Thu Dec 29, 2016 7:08pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Dasha Afanasieva

LONDON (Reuters) - Global equity raising fell by more than a quarter in 2016, data showed on Friday, hit by geopolitical shocks and a string of failed initial public offerings (IPOs), with the outlook for 2017 looking shaky.

Companies raised $648.9 billion in equity during 2016, against $873 billion last year, Thomson Reuters Equity Capital Markets (ECM) data up to Dec. 28 showed.

Money raised from IPOs was down by almost a third at $130.6 billion despite equity indices touching record highs in the latter stages of the year.

"The markets were volatile this year. There were times when IPOs got launched but didn't get done, and there were also fewer rights offerings," said Achintya Mangla, head of ECM in Europe, Middle East and Africa (EMEA) at JP Morgan (JPM.N: Quote), which topped the league table for global equity offerings and IPOs.

"2017 will continue to be uncertain and volatile and I'd expect IPO volumes will be in line with this year."

Mangla added that, though he does not expect IPO activity to rise, there could be higher overall ECM volumes with a potential increase in rights issues and acquisition-related financing.

The year's biggest IPO, for Postal Savings Bank of China (1658.HK: Quote) in September, was priced at the lower end of an indicative range and traded flat before falling more than 10 percent.

Share price falls following two big European IPOs -- payments company Nets (NETS.CO: Quote) and energy business Innogy (IGY.DE: Quote) -- put investors on edge, resulting in bankers being unable to drum up sufficient support for a string of other listings in the final quarter of 2016.   Continued...

Arrangement of various world currencies including Chinese Yuan, US Dollar, Euro, British Pound, in this picture illustration taken January 25, 2011.   REUTERS/Kacper Pempel/Illustration/File Photo