Global Capital Markets Perspective

Issuance across many capital market instruments improved in 2013 over 2012, despite global spells of volatility. Investor confidence increased on account of improved macroeconomic indicators. The U.S. continued to sustain its principal contribution to global issuance across many instruments while Europe also showed signs of economic recovery across many asset classes. Asia Pacific witnessed a year of volatility though equity markets fared better than their debt equivalents.

Preference for bonds over loans continued to be the trend in the global markets while refinancing remained the theme for issuance. Many companies took advantage of low interest rates to raise cheaper capital and extend maturities of their existing debt. 

While many capital market instruments showed signs of recovery, the outlook globally is expected to remain uneven, with high yielding assets poised to outperform low yielding safer assets. Fears over the Fed’s decision about tapering and tightening is also likely to be a primary source of challenge for issuers as well as investors in 2014. While economic reforms have lent some stability to the capital markets, they continue to be complex and dynamic in nature, making it essential to keep a constant watch on developments in order to gain insight into some important trends shaping these markets.