Floats fall by 40pc in 2011 market slide

COMPANIES raised almost a third less capital on stock markets worldwide in 2011 as they did in 2010, as a slump in global equity markets deepened throughout last year, new data yesterday showed.

The total amount of equity raised on capital markets worldwide fell 30 per cent year-on-year to $628.3bn (£403.3bn), with the second half of the year faring far worse than the first, data provider Dealogic said.

Companies’ initial public offerings (IPOs) fell 40 per cent to $168.1bn in 1,285 deals, down from $281.1bn raised in 2010.

And while in the first half of the year capital raised was up 25 per cent from 2010, to $427.2bn, that fell dramatically in the second half.

The Eurozone sovereign debt crisis, US sovereign credit rating downgrade and fears of a global recession battered stock markets from July onwards. In the second half of the year companies raised just $201bn worldwide, down 64 per cent on the second half of 2010, to make it the worst performing second half seen since 2002.

IPO revenues at investment banks also fell across every region worldwide, down 23 per cent in Europe and 61 per cent in Japan, although they fell only eight per cent in the US.

In Europe, where Glencore’s $10bn IPO buoyed the London Stock Exchange in May, IPO activity fell particularly hard in the second half of the year. Companies raised just $8.4bn in the second half, down from $30.4bn in the first half.

In contrast, Asia Pacific IPOs accounted for 66 per cent of all global IPOs – at $185.1bn – in the first half, and almost half of all global IPOs in the second half of the year, with $80.6bn raised.

Goldman Sachs topped the IPO bookrunner league table for the year, taking 6.7 per cent of the global market with $11.7bn raised for clients.

Morgan Stanley took second place with six per cent market share, after raising $10.1bn for its clients.

The FTSE 100 ended 2011 down 5.6 per cent or 327 points from 2010’s level, wiping £85bn from UK firms.

Thomson Reuters, which compiles equity market data on a slightly different methodology, said equity market issuance fell 28 per cent compared to 2010, to $617.7bn.