The global supply of public equity is shrinking at its fastest pace in at least 25 years, as economic and geopolitical uncertainty weighs on new share sales while companies keep buying back large volumes of their own stock.
The figures, from JPMorgan analysts, confounded the bank’s own expectations and suggest a lingering lack of confidence among executives. Rising stock markets and relatively strong economies should in theory encourage companies to raise funds by selling new shares at high prices rather than spending cash to buy them back.
Yet data shows that the global universe of public equities has already shrunk by a net $120bn this year, exceeding the $40bn taken out over all of last year. That puts the net figure on course for a third consecutive year of decline — a phenomenon not seen since the bank’s data series began in 1999.