Listed Capital Markets in 2023
- Neil Mathieson
- Jul 31, 2024
- 3 min read
Updated: 6 days ago
Depressed Economic and M&A activity continue to impact.
Take-Aways
New issuance on listed exchanges was muted, with Fixed Income down 0.1% and Equity up 3.3%. Economic headwinds and low M&A activity are factors.
Outstanding sums on exchanges at 31.12.2023: Fixed Income totalled USD 140.7tn (up 5.9%), and Equity totalled USD 115tn (up 13.4%).
Crypto Assets outstanding on exchanges at 31.12.2023 totalled USD 1.6tn.
Significant regional differences exist. The long-run ascendancy of the US and China continues, as does the decline of the EU and Japan.
Private Capital Markets reflect public markets. New fundraising totalled USD 1tn, the lowest since 2017, while total AUM was USD 13.1tn.
Fixed Income Capital Markets
In 2023 new issuance totalled USD 25.2tn, down 0.1%.
Total outstanding at 31.12.2023 was USD 140.7tn, up 5.9%.
The top 3 markets by size were
US 39.3% of outstandings
EU 18.4%
China 16.3%
Total outstanding at 31.12.2013 was USD 85.2tn. During the past decade the rise of China and Emerging Markets was significant. Japan’s share declined from 16.1% to 8.2% and the EU share from 28.9% to 18.4%.
Source: Bloomberg, Refinitiv and SIMFA. Issued includes securities with maturity >13mths; corporate, muni and sovereign.
Equity Capital Markets
In 2023 new issuance totalled USD 422.2bn, up 3.3%.
Total outstanding at 31.12.2023 was USD 115tn, up 13.4%.
The top 3 markets by size were
US 42.6% of outstandings
EU 11%
China 9.5%
Total outstanding at 31.12.2013 was USD 66.2tn. During the past decade the rise of China and USA markets was significant.
Source: Bloomberg, Refinitiv, Dealogic and SIMFA. Issued includes securities with maturity >13mths; non-convertible IPOs and followons, excluded preferred shares, rights issues, closed end funds, spvs.
Crypto Assets Capital Markets
Total cryptocurrency outstanding on exchanges at 31.12.2023 was USD 1.6tn. There were no reliable data on issuance in the year.
Source: Binance
Focus on Regional Differences
There are marked differences on the structure of capital markets globally, which affects the type and cost of capital available to corporates.
The US is heavily reliant on publicly listed markets, together these provide 74.1% of funding to US companies.
The Euro area by contrast has 61.6% of funding in listed markets, 25.5% by loans and 12.9% by other sources.
China has 12.1% funding by listed equity, 18.5% by listed fixed income and 69.6% by loans.
Derivatives Capital Markets
In 2023 the value of exchange-traded derivatives was USD 87.1bn, up 8.1%.
In 2023 the value of over-the-counter derivatives traded was USD 667.1bn, up 7.9%.
During the past decade, the value of exchange-traded derivatives has increased by c.20% while OTC has shrunk by c. 7%.
Source: BIS and SIMFA. Notional principal value. Includes interest rates, foreign exchange, equity, commodity, credit and credit default swaps.
Private Capital Markets
Although out of scope, it is useful to observe private capital markets. In 2023 new fundraising totalled USD 1tn, the lowest since 2017.
Total Private Market assets under management at 30.06.2023 was USD 13.1tn.
Dry powder reserves, the amount of capital committed but not yet deployed, increased to USD 3.7tn.
Private equity is the largest asset class in Private Markets, followed by private debt, real estate and infrastructure. North America remains the most significant market, followed by Europe.
Source: McKinsey. Preqin and McKinsey. Excludes secondaries, funds of funds and co-investment details.
Why Capital Markets matter for FinTech?
Fintechs sell to capital market participants – investors, funds, banks, exchanges, regulators, etc.
Fintechs intermediate on capital flows – payments, foreign exchange, escrow accounts, securities lending, etc.
FinTechs issue debt and equity capital for growth, innovation or acquisition.
FinTechs exit by IPO to listed equity markets.
How we help with Capital Markets
We provide expert advice on financial strategy, fundraising and investor relations for FinTechs. We can help you understand the markets, develop a fact-based approach to decision making and prepare pitches.
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