Global financing 2001: Issuers shift from equity to debt
Global capital markets rarely look gloomy at both ends of the fund-raising spectrum, as the past year's momentous events indicate. The primary debt business is robust and active whereas equities are still shaking off the hangover that followed the indulgences of the tech stock party. Jonathan Brown sketches in the background to this year's Euromoney capital-raising poll which the universal banks dominate
In the capital-raising stakes, 2001 could not have been more different than the previous year. After some astounding equity valuations in 2000, particularly in technology, media and telecoms and the subsequent nosedive of those stocks, markets have returned to more realistic levels. Coupled with a slowdown in growth in the US and Europe and aggressive rate-cutting by the US Federal Reserve, 2001 has been slow for equities, particularly new issues.
In contrast to the gloom among equity traders the debt markets have rarely had it so good. Active debt markets have engendered a favourable environment for borrowers and a boom in interest in credit product among investors. Though some on the equity side argue that not everything is bad in the stock markets, 2001 has been the year of debt.