(03 July 2020 – Australia) Macquarie’s equity capital markets (ECM) market share increased to 21 percent in H1 2020 as UBS fell to 15 percent according to Dealogic data.
UBS fell outside the top three for the first time since H1 2002 on volume only and for fees since H1 2015 despite a surge in COVID-19 linked raisings underpinning strong investment banking fee activity. The Swiss bank’s slide to fourth place in the ECM league table has been attributed to the departure of key personnel which have opened the way for rivals to target key mandates. UBS (14.9 percent) was ranked fourth behind Macquarie (21.4 percent), JPMorgan (17.3 percent) and Goldman Sachs (15.4 percent) according to Dealogic.
ECM generates significant revenues and acts as a foundation for broader investment banking client relationships. Australian equity market activity has reached fever pitch with corporates raising A$18.8 billion via share sales as of H1 2020 year-to-date according to Dealogic data. Corporates are seeking to shore up balance sheets to help withstand the economic hit from the coronavirus pandemic.
“ECM has been a major focus for us. We have been at the top of the M&A league table for a decade and the ECM fee pool is just as large, so we made it a strategic goal to move to a number one or two position in ECM in Australia” stated Goldman Sachs Australia CEO Simon Rothery.
“ECM remains the most profitable capital markets business ahead of DCM and M&A. It’s driven by better fees and secondary market activity, while the allocation of sector specialists and research, and low margins associated with bond underwriting, impact the profitability of M&A and debt capital markets respectively” said Coalition Analyst Alex Owen.