With inflationary pressure subsiding and central banks worldwide pausing the cycle of aggressive rate hikes while managing to avoid a global economic recession, the bias appears to be toward interest rate cuts. Investment bankers expect continued economic growth this year, with the International Monetary Fund (IMF) forecasting global GDP expansion of 3.1%, including 1.5% for advanced economies overall, 2.1% for the US, and 4.1% for emerging markets and developing economies.
Equity capital markets enjoyed an extra boost last year, as the MSCI World Index and the S&P 500 each gained just over 24% in 2023; however, the equity capital markets issuance volume failed to keep up, rising only 8%, according to Dealogic, which attributed the sluggish pace to elevated interest rates plus ongoing geopolitical turmoil. Regionally, relatively strong issuance in the US, Europe, and Japan was offset by weakness in Latin America, Asia excluding Japan, and the Middle East.
The initial public offering (IPO) market is looking to shake off sluggish growth this year with an improved economic outlook. However, headwinds, including uncertainty surrounding the US elections, may prompt issuers to come to market sooner rather than later.
This year’s regional winners are recognized for their comprehensive equity capital markets platforms, leadership in executing transactions, and depth of knowledge across most key industries. —DS
Global | Bank of America Securities
With operations in 35 countries, Bank of America Securities (BofA Securities) boasts a powerful equity capital markets franchise that has achieved notable gains in league table rankings both globally and regionally. Despite sustained high interest rates, BofA’s ranking in global issuance volume rose four spots to second place, with $39 billion across 266 deals, for a 7% share, while its global revenue ranking improved two places to fourth, for a 6% market share, according to Dealogic.
Regionally, the bank claimed the top spot in Europe, the Middle East, and Africa (EMEA) equity issuance volume rose from fourth place year-over-year, with $11 billion in proceeds on 54 deals, for a 9% share. In the Americas, BofA held steady at third place in US issuance, with $18 billion in volume and a 12% share, and cracked the top 10 in Canada, up from thirty-first last year. In Latin America, it rose three spots to second place in deal volume, with $2 billion across 33 deals, for a 15% share, nearly surpassing the regional leader, Itaú BBA.
BofA moved up one spot to tenth in Asia excluding Japan, with $4.9 billion in equity issuance, for a 3% share; and it gained ground in IPOs in the US and EMEA, rising to fourth and fifth place, respectively. The bank is well-positioned to build on these gains, given its deep execution capabilities and exceptional sector knowledge. —DS
Africa | Chapel Hill Denham
Macroeconomic upheaval has not dampened optimism at Chapel Hill Denham. “Africa’s long-term story is a growth story,” says partner Phil Southwell. As banks and corporates seek to bolster their equity to meet the twin challenges of financing organic growth on the continent and recapitalizing, issuance volumes will continue to grow, he predicts.
Chapel Hill Denham sits at the pinnacle of Africa’s equity capital markets. The firm’s team boasts more than 280 years of collective experience. Since 2017, the firm has dominated issuance in Nigeria with over 57% market share, participating in over 48% of completed transactions last year. Over the 12 months ending last October, the firm oversaw equity capital markets deals worth $421.6 million. It acted as lead bookrunner for its Nigeria Real Estate Investment Trust, which collected $95 million through a Series II fundraising. The transaction, the largest ever for a REIT, was 125% oversubscribed. —JN
Asia-Pacific | DBS
DBS is the Asia-Pacific region’s leading equity house, thanks to its agility in structuring equity solutions; and it aims to maintain its standing by embracing new opportunities and challenges and improving its strategic vision.
In REITs and business trusts, DBS retains the top ranking in the capital markets of Singapore and the Association of Southeast Asian Nations as a whole. In Hong Kong and Indonesia, it offers customized solutions to state-owned entities and privately owned small and midsize enterprises. In 2023, DBS acted as lead financial adviser, joint global coordinator, joint bookrunner, and underwriter on several equity offerings on the Singapore Exchange, signaling a post-pandemic comeback for Singapore equity capital markets.
In 2020, DBS received permission from the China Securities Regulatory Commission to establish a majority-owned subsidiary, DBS Securities (China), which operates in the mainland’s onshore equity capital market and also provides services to Chinese clients on their cross-border equity financing initiatives. —LZ
Central & Eastern Europe | PKO Bank
The leading bank in Central and Eastern Europe, ranked by net income, equity, and customer base, PKO Bank Polski rode a remarkably good year for Polish dealmaking and equity activity to post continued positive results. The Warsaw-based giant continued to lead in its home country’s investment market, one of Europe’s liveliest IPO scenes last year. Driven by 15 debuts on the Warsaw Stock Exchange, in many of which PKO played a pivotal role, the region saw IPO activity soar.
Looking ahead, PKO’s customer-centric positioning and decades-long market dominance signal the investment bank’s intention to keep improving its key performance indicators into 2025. The bank aims to achieve a return on equity above 12% and cost-to-income ratio below 45% in investment banking next year, while holding the cost of risk to the 0.7% to 0.9% range. —TM
Latin America | Banco BTG Pactual
A key component of Banco BTG Pactual’s investment banking success is its talented team of bankers and an organizational structure that it periodically refines to meet shifting market dynamics and client needs. The current structure, organized around execution and industry groups, is designed to combine client-focused investment bankers with necessary expertise.
This structure allows BTG to be more responsive as it serves corporate clients in sectors including financial institutions, logistics and transportation, retail, technology, energy, electric utility, healthcare and pharmaceuticals, construction, and environmental and waste management.
Following equity markets’ strong regional performance last year that saw the MSCI Latin America index surge 33.5%, far outpacing the broader MSCI Emerging Markets Index, the outlook is for continued momentum aided by an easing monetary policy at many of the region’s central banks. Against this backdrop, BTG aims to improve its league table rankings. Last year it placed third in Latin American equity capital markets volume, with $1.8 billion in proceeds across 24 transactions, for a 14% market share, according to Dealogic. The bank kept its position as Brazil’s top equity capital markets platform, notching 19 deals for $1.6 billion in issuance. —DS
Middle East | First Abu Dhabi Bank
The Global Corporate Finance division of First Abu Dhabi Bank (FAB) operates a leading investment bank in the United Arab Emirates (UAE) and throughout the Middle East, offering deep local and regional knowledge across a range of sectors combined with strong origination and structuring expertise. The division’s international reach also affords extensive distribution capabilities to domestic and global institutional investors by virtue of its location within the UAE’s largest bank.
While equity issuance volume fell 47% in the Middle East and North Africa (MENA) region last year, according to Dealogic, FAB secured high-profile mandates from Abu Dhabi National Oil Company (Adnoc) for its IPO representing 5% of the company’s gas business and a separate IPO of 19% of Adnoc Logistics and Services. These transactions placed FAB among the top five banks in MENA equity capital markets, according to Bloomberg, and earned it 10th place in EMEA IPO fees, with a 2% share, Dealogic calculated. —DS
North America | Goldman Sachs
The outlook for renewed activity in North American equity capital markets is strong as economic conditions improve. The Federal Reserve Bank (the Fed) appears to have engineered a soft landing for the US economy after successive rate cuts to dampen inflation, and recession fears have subsided following strong GDP growth of 3.2% in the fourth quarter and 2.5% for the full year 2023. The IMF is now forecasting that US growth will continue, albeit at a slightly slower pace of 2.1% in 2024.
With falling unemployment and sustained levels of consumer spending supporting many US companies, analysts are predicting elevated rates to persist in the near term and cuts to materialize toward the end of the year. This bodes well for the equity capital markets, says Elizabeth Reed, global head of the equity syndicate desk at Goldman Sachs, in a February article on the company’s website.
“The Fed’s shift, and that of global central banks, will be a positive tailwind for the full suite of equity capital markets,” she states. Moreover, the IPO “pipeline is growing,” with increased activity expected “from financial sponsors and venture capital firms aiming to monetize their portfolios.”
Given this outlook, Goldman will seek to maintain and strengthen its first-place league table position in US equity issuance, bolstered by a 14% market share, 14% share in fees, 6% share in IPO proceeds, and 12% share in IPO revenues. —DS
Western Europe | UBS
European equity offerings jumped a solid 44% year-on-year in 2023, according to Dealogic; and UBS, our best bank in the region, was able to drive some of the year’s key transactions. The bank led not only in the volume of issuance but in the quality of its offerings, helping its customers take advantage of the positive momentum by providing tailored and unique opportunities within the equity spectrum.
Among several landmark transactions, UBS was joint global coordinator and primary issuer on the UK’s largest IPO since 2021, Admiral Acquisition’s €507 million (about $551 million) debut on the London Stock Exchange in May. It also served as sole global coordinator and bookrunner for a 108 million Swiss franc (about $121.6 million) primary accelerated book-building offering of shares in Swiss biotech Bachem Holdings and was the primary adviser on Societe Generale subsidiary ALD Automotive’s €1.2 billion rights issue, which was completed in 2022. —TM
| Best Equity Bank | |
|---|---|
| Global | BofA Securities |
| Africa | Chapel Hill Denham |
| Asia-Pacific | DBS Singapore |
| Central & Eastern Europe | PKO Bank |
| Latin America | Banco BTG Pactual |
| Middle East | First Abu Dhabi Bank |
| North America | Goldman Sachs |
| Western Europe | UBS |
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