Global ECM volume fell 29% from 2001 levels to $308.1 billion in 2002 according to financial data services provider Dealogic. Goldman Sachs retains its place as top bookrunner in global ECM for the eighth year in a row.
Global IPO volume fell 36% to $55.6 billion, with the Europe Middle East and Africa (EMEA) region the worst hit. EMEA IPO volumes collapsed 66% to just $10.9 billion. In the US the number of deals fell more modestly from 86 to 82, but at $24.4 billion the combined dollar value of those offerings was 37% down from the 2001 level of $38.7 billion.
IPO volumes have been battered by poor equity market conditions, low valuations, and widespread IPO-related scandals at some of the biggest investment banks. In the Asia Pacific region IPO issuance increased 19% to $18 billion helped by a burst of activity from Taiwan and Hong Kong, which produced the largest increases in IPO activity in the world. The dollar volume of IPO issuance was up 113% and 29% in Taiwan and Hong Kong respectively.
The convertibles market was badly hit by the numerous credit scandals of 2002 and by the volatility of corporate credit spreads, especially in Europe. The volume of worldwide convertible new issuance fell by 41% to $98.5 billion, and issuance was down 49% to $23.5 in EMEA. Conversely, convertibles became more important in Asia in 2002. Convertibles volume accounted for 34% of Asia Pacific ECM activity in 2002, up from 29% in 2001.
2002 also saw a surge of rights issues in Europe, as insurers resorted to them in an effort to strengthen their balance sheets. The volume of EMEA rights issues (excluded from the Dealogic figures) increased 7% to $22.1 billion.
Investment banks do not expect a resurgence in IPOs to drive their ECM businesses in 2003. “There is a misconception about the importance of IPOs to the ECM business,” says Hubert Keller, global head of ECM at Deutsche Bank, the top ranked EMEA ECM bank. “We do not expect IPOs to be of serious importance to us for the next 12 to 18 months. The restructuring business is much more important than in the past and the opportunities in 2003 are going to be driven by the theme of balance sheet restructuring, whether through rights issues, mandatory convertibles or monetization.”
Global ECM 2002 bookrunners
1 Goldman Sachs2 Salomon Smith Barney3 Merrill Lynch4 Morgan Stanley5 Credit Suisse First Boston6 Deutsche Bank7 UBS Warburg8 JPMorgan9 Lehman Brothers10 Bank of America(Source: Dealogic)
| Regional Breakdown | ||||||
Global ECM regional breakdown 2002
For a copy of the full Dealogic global equity capital markets 2002 report, email James Fawcett.
