EMERGENCY CAPITAL CALLS from distressed issuers were the dominant theme in equity capital markets in 2008. IPOs all but disappeared in the second half of the year, with the number of deals above $100 million falling 91% on the same period in 2007. Overall, the amount of equity raised fell by about 30% to 40% in most regions.
| IPOs disappear, as follow on issues dominate |
| Global ECM issuance 2008 YTD |
 |
| Source: Dealogic |
Balance sheet repair and rescue rights issues look likely to remain the driving force behind transactions in 2009, although financial institutions are likely to find themselves in the company of a larger number of corporate issuers as the need to raise capital trickles down from the financial sector into the real economy. Issuers that do not have particularly compelling investment cases will struggle to find buyers for their shares and might have to consider alternative instruments or find sources of capital outside the regular public equity market.
Cash-strapped companies might also contemplate spin-offs despite low valuations, when an IPO window opens enough to let deals get done.