An unrelenting squeeze on the supply of global shares and sovereign bonds shows little sign of easing next year, with companies and central banks predicted to be big buyers of these securities in direct competition with investors.
Yet this flood of new equity issues did not end the supply squeeze on stocks as mergers and private equity deals continued to suck shares out of the market He expects demand for shares to increase by US$600 billion from this year, while supply drops by US$500 billion as buybacks and private equity-led leveraged buyouts recover further. .
These players, who often help to drive wild first-day gains in newly-listed shares, accounted for a quarter of stock market activity this year, versus 10per cent in 2019, brokerage Citadel Securities estimates. He also expects the IPO rush to continue into 2021 as private equity owners cash in on buoyant markets.Monetary authorities in the euro zone, Sweden, Australia and Britain all recently upped bond buying, while the U.S. Federal Reserve, which so far owns a smaller share of its bond market than peers, may also increase purchases in coming months.