Market Direction and Stock Trends

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Companies raise over $12tn in ‘blockbuster’ year for global capital markets
By: Financial Times | December 27, 2021

The torrent of central bank stimulus and the rapid recovery from the pandemic have boosted many global markets, raising a record $ 12.1 trillion in 2021 by selling shares, issuing debt and issuing new loans. did.

Although there are still a few days left this year, according to Financial Times calculations, cashholes have already increased by almost 17% from 2020, which was a historic year in its own right, in 2019 before the coronavirus crisis. It is almost a quarter more than the take of. About Refinitiv data.

The ferocious pace of funding emphasizes exactly how it is done. Simple financial status It is located in many parts of the world, especially in the United States, where more than $ 5 trillion has been raised.

“This year was a really big hit,” said Chris Bloom, a BNP Paribas banker who helps raise leveraged buyouts. “We expect it to continue next year. Every year, I think the market will drop from this desperate pace, but it’s still strong.”

The listing of companies such as electric car maker Rivian and South Korean e-commerce business Coupang has raised the price of Gargantuan.

Dozens of 10-digit and 11-digit loans have been signed, including those that fund Discovery merger With AT & T’s WarnerMedia unit and freight railroad operators Acquisition of Canada Pacific South of rival Kansas City. And about $ 10 trillion in US corporate bond market investors traded after the deal.

Large-scale bond purchase programs launched by the Federal Reserve and central banks such as the European Central Bank during the pandemic have helped push borrowing costs to historically low levels. According to bankers, coupled with the large amount of cash working through the financial system, it was a very favorable environment for businesses to take advantage of new investors and lenders.

In Europe and the United States, where many good corporate groups surpassed corporate bonds in 2020, corporate bond sales fell by less than 3% due to a surge in issuance from junk-rated companies, while high-end corporate bond sales were sluggish 5.5. It became a dollar. tn.

This was partially reinforced by tremendous private equity activities as buyout shops such as KKR, Blackstone and Apollo borrowed through the credit market to fund a total of about $ 1.1 trillion in buyouts this year.

Debt and loan market year

$ 10tn
The 2021 U.S. corporate bond market has swelled to this scale for the first time

11 11
Over $ 10 Billion Corporate Bond Sales Completed This Year

$ 41.5 billion
Loan Bank wrote to fund the merger of WarnerMedia and Discovery

Junk bond sales were up 17% year-on-year to just under $ 650 billion, but new leveraged loans (leveraged high-yield bond borrowers) were 2 It more than doubled to $ 614 billion.

“Whether you think the valuation has risen or not, the system has a lot of liquidity and the animal spirits of the M & A market are very lively,” said Kevin Foley, executive at JP Morgan Chase. I am saying. According to the Bloomberg League table, corporate bonds are the most traded in the world.

Global equity issuance hit a record high in 2020, driven by a surge in initial public offerings in all major markets. Equity issuance totaled $ 1.44 trillion, up 24% year-on-year.



Especially in the United States, the debut of companies such as chip makers has almost doubled the amount of IPOs compared to what was already in Bumper 2020. Globalfoundries, Dating app Bumble When Nubank, Warren Buffett and Tencent are Brazilian financial technology groups that count as investors.

Jim Cooney, Head of Equity and Capital Markets in the Americas of Bank of America, said: “It wasn’t too close.”

However, despite the expansion and steady growth of the stock market, many newly listed companies have performed unusually poorly after listing. The Renaissance IPO Index, which tracks recent US listing performance, fell 8% this year, the worst performance compared to the S & P 500 since its launch in 2009.

Equity Capital Market Year

$ 1.4 trillion
Record amount raised through the sale of shares

$ 13.7 billion
How much Rivian raised in the biggest IPO in 2021

$ 162 billion
Total cash raised globally by Spacs

For the first time, more money was raised by a US special purchase acquisition company than a traditional IPO. Issuance has slowed since the first quarter of Bumper, but a steady stream of blank check companies looking for investors to raise money and buy is on the market until the last few months of the year. In total, we have raised over $ 152 billion. Year.

Brad Miller, co-head of UBS’s North and South American equity and capital markets, said the Spac market was “extraordinary.” As a result, he added, “very many companies are now looking for M & A opportunities.”

According to Dealogic, more than 550 Spacs are currently looking for targets, and by the end of 2022 there is a deadline for nearly 200 Spacs to find targets. Their success or failure helps determine if the Spac phenomenon will continue or fade into a niche product. They were before 2020.

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