Equity deal volumes down by 31pc in 2011

THE GLOBAL market in new equity shrank by nearly a third this year in a stark indication of the damage done to capital markets by ongoing political turmoil all over the world.

Annual figures from Dealogic show the amount of cash raised by issuing new shares has dropped to $621bn this year, down 31 per cent on 2010, with all investment banks’ revenues suffering as a result.

Among the top banks for revenues generated by equity capital markets (ECM) business, there was little change in the rankings except that Bank of America Merrill Lynch overtook Goldman Sachs to grab third place.

BAML has brought in $955m from ECM sales this year despite falling down the table for the volume of the deals it was involved in, showing that the bank has been more efficient at extracting revenues from business.

Morgan Stanley and JP Morgan stayed at the top in first and second place respectively, while Barclays Capital and RBC Capital Markets both gained some ground after expanding their broking businesses with a view to taking market share in related areas.

Glencore was easily the largest equity deal this year, with the commodities trader raising $10bn – nearly double the next biggest ECM transaction, Hutchinson Port’s $5.5bn float.

Debt markets were also poor, with deal volumes down by eight per cent ot $5.64 trillion. Revenues for investment banks on primary business held up a little better, declining just four per cent.