The Global Capital Markets Perspective

Issuance across many capital market instruments improved in 1H14 over 2H13, in the wake of improving macroeconomic fundamentals across various economies. The period saw the U.S. capital markets stabilize as a result of continuity in the Fed’s tapering program and the underlying expectation that the monetary stimulus will be completely withdrawn in the near term. In Europe, measures implemented by the European Central Bank (ECB) coupled with improving economic factors, translated into heightened capital market activity across all instruments. Asia Pacific saw improved issuance as a consequence of the economic regulations that many of the countries in the region implemented in the previous half.

1H14 also saw issuers take advantage of the conducive capital raising conditions to issue cheaper debt for refinancing, funding acquisitions, and stocking up on cash reserves for future use.

Refinancing remained the key reason for issuance, with companies taking advantage of the current environment conducive to capital raising for as long as it lasts. M&A related financing contributed a greater share in the total capital raised by issuers across economies, especially in Europe, that is expected to have a positive economic outlook.