Global survey shows two thirds of firms putting off fund raising
ECONOMIC uncertainty and currency volatility mean nearly two thirds of companies around the world will hold off raising capital for the next two years, according to a survey by RBC Capital Markets.
Around 62 per cent of the 440 senior financial and non-financial executives surveyed said they would not be calling on fresh funding, suggesting market nervousness over periphery Eurozone countries’ sovereign debt and the future of the single currency is feeding through to boardrooms.
And just 38 per cent expected to raise capital over the coming 24 months. Private equity (37 per cent) and syndicated loans (35 per cent) are expected to be among the most popular choices for raising debt or equity, followed by investment-grade debt (25 per cent), secondary equity offering (14 per cent), securitisation (14 per cent) and IPOs (11 per cent), the study showed. Only five per cent of respondents said new regulatory challenges were a risk to their funding plans.
Doug Guzman of RBC said: “In this environment, the ability of corporates to part-fund their own transactions through cash reserves will be extremely attractive to banks, who are increasingly looking to reduce their exposure to risk.”