Equity Capital Markets
What are equity capital markets?
An equity capital market (ECM) is a market between companies and financial institutions that aims to raise equity capital for the companies. The key players within ECMs are big financial institutions such as Citigroup, Goldman Sachs and UBS.
Where have you heard about equity capital markets?
The business pages of leading newspapers are always full of news about the state of the equity capital markets. This FT article from June 2017 spoke of buoyant demand for European stock market listings and growing investor confidence.
What you need to know about equity capital markets.
ECMs provide a way for businesses to raise additional capital through the issuance of stock. The company gives information about its finances to a financial institution, which then helps the company with market transactions.
Institutions providing ECM services can be involved in initial public offerings, convertible bonds and other services involving equity. They can also raise money for a company merger or an acquisition of another company.
There was a peak in the amount of profits generated through ECMs in 2006-07, but profits plunged following those years. In London, IPO activity has now started to recover from the shock of the Brexit vote.