In this issue of Equity capital markets: Global equity markets capped off a strong year with particularly strong gains in Q4, supported by a strong earnings season, US tax cuts, declining unemployment rates, and a continued healthy and more synchronised economic growth.
In return, as economic slack continued to diminish, several central banks, including the US Federal Reserve, the European Central Bank and the Bank of England, modestly tightened monetary policy. In the UK, despite a sluggish economy, the Bank of England raised interest rates for the first time since 2007, from a record low of 0.25% to 0.50%.
UK equities had to contend with the increased strength in sterling over 2017, weighing on the sterling value of foreign revenues, which make up close to 70% of FTSE 100 sales.
The UK’s FTSE All-Share Index saw positive returns by gaining 4.3% in Q4 (Q3: 1.2%) amid further evidence of a sustained recovery in the global economy. A particularly strong performance was recorded in the oil and gas sector over the period as oil prices were supported by extended production cuts by OPEC.
AIM IPO and fundraising activity continued to see strong activity in the last quarter of the year with 27 new admissions in Q4 (Q3: 25) and a total of £2.5bn raised (Q3: £2.0bn), which is a 66.7% Y-o-Y increase in money raised when compared to Q4 2016. In 2017 there were a total of 80 new admissions on AIM, a 25% increase over 2016. In addition, the average market capitalisation of AIM companies continued to increase to £111.3m, as at 31 December 2017, which is a new record level.
Further figures and analysis are contained in the PDF newsletter.
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
This article was previously published on Smith & Williamson prior to the launch of Evelyn Partners.