Equity capital markets

Equity capital is raised in many ways; the major types of equity capital are unlisted equity, listed equity and hybrids. Equity capital market practices traditionally advise on a full range of equity, debt equity-linked, hybrid, asset-backed, credit-linked and derivative products that are offered in capital markets.

An Equity Capital Market (ECM) is a market between "companies and financial institutions" that is aimed at earning money for the company.[1] Examples of financial institutions involved include Goldman Sachs and Citigroup.[1] The company gives information about their finances to the institution, and the institution helps the company increase their profits through "market transactions."[1] Institutions providing ECM services may be involved in initial public offerings (IPO),convertible bonds, and other services involving equity.[2] They may also raise money for a company merge or acquisition of another company.[3] There was a peak in the amount of profits generated through ECM in 2006-2007, but profits took a dive following those years.[3] It has been reported that ECM profits are beginning to normalize.[3]

References

  1. 1 2 3 Investopedia. http://www.investopedia.com/terms/e/equitycapitalmarket.asp
  2. ↑ http://www.hsbcnet.com/gbm/products-services/financing/equity-capital-markets.html
  3. 1 2 3 http://www.efinancialnews.com/story/2013-11-14/tide-turns-for-equity-capital-markets?ea9c8a2de0ee111045601ab04d673622


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