FirstFT: Corporate fundraising slides during market rout of 2022

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Corporate fundraising slowed down sharply in the first half of 2022 as a storm blowing across financial markets left bankers and corporate finance chiefs wary of issuing new stocks and debt.

Businesses globally raised $4.9tn through new bonds, loans and equity in the first half of 2022, down 25 per cent from the $6.6tn raised in the first half of 2021.

The chill in capital markets underscores a powerful shift from exuberance to trepidation this year as central banks aggressively tighten monetary policy to temper persistently hot inflation.

The junk bond market, where low-rated companies borrow from risk-tolerant investors, registered its biggest quarterly loss since the pandemic-induced ructions of March 2020.

Junk bond sales in the US sank to less than $60bn, down from more than $250bn in 2021 and the slowest start to a year since 2009.

The sharp swings in financial markets this year have hit sales of shares the hardest, with many companies delaying planned initial public offerings, including some that agreed to cut their valuations privately.

The S&P 500 index of America’s biggest companies ended the first half with a loss of 20.6 per cent, its worst performance for the January-June period in half a century. The technology-heavy Nasdaq finished the period down almost 30 per cent.

The pressures look set to continue into the second half of the year. Futures trading suggests the S&P 500 will open down 1 per cent after finishing at 3,785.38 yesterday.

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Five more stories in the news

Xi attends Hong Kong ceremony China’s president Xi Jinping has warned that power in Hong Kong “must be administered only by patriots” as he presided over the swearing in of the territory’s new chief executive, John Lee. The ceremony was timed to coincide with the 25th anniversary of the former UK colony’s return to Chinese sovereignty in 1997.

2. Russian missiles hit residential block in Odesa Russian missiles struck a residential building near the centre of the port city of Odesa, killing at least 18 people according to Ukrainian officials. The attack comes a day after Russian forces withdrew from the strategic Black Sea outpost of Snake Island.

3. Cern scientists restart hunt for answers to mysteries of universe The Large Hadron Collider at the Cern laboratory near Geneva will be fired up again next week after a three-year shutdown for work to improve the machine’s power and precision. The supercharged LHC will shoot protons at almost the speed of light around the 27km underground ring close to the Swiss-French border.

4. Leon Black loses lawsuit accusing former Apollo rival of conspiracy The billionaire financier failed in his effort to persuade a judge that one of his top business rivals conspired with his former mistress to publicise made-up allegations of sexual abuse. The decision represents a victory for Josh Harris, Black’s former lieutenant at Apollo Global Management.

5. Peru’s president resigns from party that took him to power Pedro Castillo yesterday resigned from the Marxist party that propelled him to power just last year. Castillo, who had never served in public office before winning the election, could now be free to form alliances with more moderate parties.

The days ahead

Housing and manufacturing data Growth in the US manufacturing sector is estimated to have decreased in June, according to the Institute for Supply Management, which releases its purchasing managers’ index for May. Data from the US Census Bureau are expected to show that construction spending edged up in May compared with April. But the issuing of new residential construction and building permits is expected to have slowed in May.

Brittney Griner trial begins The US basketball player will go on trial in Moscow today. The star centre for the Phoenix Mercury in the WNBA, who also plays in the Russian women’s professional league, was arrested at a Moscow airport days before the outbreak of war in Ukraine and charged with possession of narcotic cannabis oil.

Julian Assange deadline It is the last day for the WikiLeaks founder to launch an appeal against the UK’s decision to extradite him to the US to face espionage charges.

Changing of the guard Brazil takes over the presidency of the UN Security Council for July, while the Czech Republic assumes the six-month presidency of the EU.

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What else we’re reading

Supreme Court’s blockbuster term reverberates through America Yesterday the Supreme Court concluded one of the most momentous terms in recent history with the decision to curb the Environmental Protection Agency’s powers to limit greenhouse gas emissions. We look back at the key rulings, including the overturning of Roe vs Wade.

Can crypto contagion infect mainstream finance? The cryptocurrency market carnage has had one silver lining: the broader financial system has been spared. Here’s why most regulators and industry heavyweights believe banks and asset managers are protected.

The Swedish island where a third world war could start Experts say a Russian invasion of the Baltics could begin with Gotland, an idyllic 1,200-square-mile island that is one of the most strategically important locations in Europe. Military control of the “unsinkable aircraft carrier” would threaten not only Sweden but also Estonia, Latvia and Lithuania.

How to avoid a privacy apocalypse At the moment, we have the worst of both worlds: researchers struggle to access data because the people who have patient records (rightly) hesitate to share them. Yet leaks are almost inevitable because of patchy oversight. Tim Harford argues we need a new kind of data infrastructure.

Have we had enough of the nanny employer? Employers became very conscientious about attending to staff wellbeing during the pandemic, particularly mental health, often delving into matters that were previously viewed as personal. But have they encroached too far into our personal lives?

Food & drink

From glass bottles to linen napkins, freshly cut flowers to sandwiches for everyone — here’s how to host the perfect plastic-free picnic.