U.S. Banks’ Share Of Global Equity Capital Markets Increases After Shrinking For Three Consecutive Quarters

by Trefis Team
Morgan Stanley
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As companies cashed in on improved investor sentiments towards equity markets around the globe to raise fresh capital, the largest U.S. banks leveraged their strength in the U.S. market as well as in Europe to increase their share of total equity issuances from an average of 32% over the last three quarters to almost 35% now.

The chart below captures the total size of equity capital market deals completed by the five largest U.S. investment banks since Q1 2016. The green-to-red shading for figures along a row show the variations in deal size for a particular bank over this period.



Equity underwriting volumes for individual banks were taken from Thomson Reuters’ investment banking league tables for the last five quarters. The table below captures the respective market shares for each of these banks over this period. The green-to-yellow shading for figures in a quarter should help compare the relative standings of these 5 banking giants in a particular quarter.


It should be noted that the largest equity capital market deals (IPOs and FPOs) employ more than one investment bank, so the market share figures are not exclusive.

Notably, the five largest U.S. investment banks captured the top five ranks in the global equity underwriting league table for almost every quarter over recent years. However, they witnessed a sizable reduction in their overall market share over the last three quarters of 2016 due to a sharp increase in equity underwriting volumes in developing markets (particularly China) over this period. The fragmented nature of the Chinese industry – with local players dominating debt and equity issuances – coupled with a reduction in activity for the core U.S. and EMEA regions hurt market shares for the U.S. investment banking giants.

However, Morgan Stanley has seen a better track record than its peers in Asia over recent years, as evidenced by its strong performances in Q2 and Q4 2016. Morgan Stanley’s fortunes reversed in the region over Q1 2017, though, as it fell to the #9 position in Asia even as Goldman notched up the #1 rank owing to its role in several big deals including the $2.1-billion IPO of Chinese brokerage Guotai Junon, which is included in the Q1 league table.

You can see how changes to Morgan Stanley’s share of the equity underwriting industry impact our price estimate for the bank’s shares by making changes to the chart below.

See the links below for more information and analysis about the 5 largest U.S. investment banks:

See full Trefis analysis for Goldman SachsJPMorganMorgan StanleyBank of America | Citigroup

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