Global equity raising slumps, European bankers eye big floats
By Dasha Afanasieva LONDON (Reuters) - Europe was the worst performing region for equity raising proceeds in the third quarter, according to Thomson Reuters data, as a strong performance in Asia failed to undo a global slump in issuance. Global equity capital markets' (ECM) proceeds fell to $543 billion in the first three quarters of the year from $563 billion in the same period of 2017. Asia offerings helped to balance a slump in Europe, where activity was stymied by an absence of the massive bank rights issues seen in 2017.
By Dasha Afanasieva
LONDON (Reuters) - Europe was the worst performing region for equity raising proceeds in the third quarter, according to Thomson Reuters data, as a strong performance in Asia failed to undo a global slump in issuance.
Global equity capital markets' (ECM) proceeds fell to $543 billion in the first three quarters of the year from $563 billion in the same period of 2017.
Asia offerings helped to balance a slump in Europe, where activity was stymied by an absence of the massive bank rights issues seen in 2017. In the third quarter, European ECM fell 63 percent to $19 billion, while global ECM proceeds fell 31 percent to $134 billion.
A banking source who declined to be named said the poor performance of some stocks following share sales - including British bank RBS
"The one bright spot is IPOs. The ones we're looking at are big in size, whereas last year the IPO flow was more scattered and small and there was investor fatigue towards year end," said Samuel Losada, head of Europe, Middle East and Africa (EMEA) ECM at Bank of America Merrill Lynch
Starting in late 2017, a string of European IPOs were cancelled, with bankers often citing market conditions or a mismatch in price expectations between buyers and sellers.
Most notably Saudi Aramco shelved its plan to sell $100 billion worth of shares, a deal aggressively chased by ECM bankers battling for league table positions.
"IPO markets will need to digest a lot of issuance over the coming weeks and months and long only investors are driving this. They are however very sensitive to price," Losada added.
SETTING THE TONE
Swiss packager SIG Combibloc
Early October would see Mubadala-backed Spanish energy company Cepsa and British car maker Aston Martin go public in multi-billion dollar floats.
But with U.S. midterm elections and crucial summits to decide Britain's future relationship with the European Union in the coming weeks, companies may have just a small time frame in which to do deals.
The initial public offering of Volkswagen's truck and bus unit is expected to be among the biggest of 2019, driving proceeds of more than 6 billion euros to its parent company Volkswagen AG
Bankers pointed to an outflow of global funds from Europe, with capital instead favouring the United States, which has a better growth forecast. Hoping for a reversal of this trend, London-based bankers said investors may soon see European IPOs as a good opportunity to pile back into the continent.
"The volumes are sustainable and because of a number of jumbo IPOs coming up, there may be an upside. Merger and acquisition financing may also help bring up issuance," said Suneel Hargunani, head of EMEA equity syndicate at Citigroup
(Reporting by Dasha Afanasieva; Editing by Gareth Jones)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.