This translation has been automatically generated and has not been verified for accuracy.The coronavirus crisis is likely to reverse a decade-long trend of shrinking equity supply that helped to power the longest bull market in history as cash-strapped companies are forced to raise equity instead of buying back their shares.
He has calculated, based on a global share count proxy, that net equity supply rose by $500 billion last year, the highest since 2010. He said this year will at least match that tally, noting a $200 billion increase in equity supply in the first five months of 2020. Up until now, the popularity of buybacks among U.S. companies helped to cut the share count on the S&P 500 index by around 25 billion between mid-2011 and end-2019, based on data from the Yardeni Research consultancy.
Many analysts believe a shift towards increased equity supply will be a drag on markets and increase volatility if companies no longer buy shares when their stocks tumble. But the shift away from buybacks has not yet upset stock markets, which have several other sources of support. For one, companies are far less capital-intensive than in the past so will not need to issue huge amounts of equity.
Instead, investors say they will focus more on the cash and debt levels on corporate balance sheets, as well as paying more attention to employee working conditions and environmental impact.
globeinvestor What did investors think... it will go up and up magically? There is only so much government can do to falsely prop it up. We are ina crisis. Wait until we find out that vaccines are non effective in trials. This is a new virus, we can’t even get a good vaccine for the flu.
Business Business Latest News, Business Business Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: CTVNews - 🏆 1. / 99 Read more »
Source: HuffPostCanada - 🏆 61. / 53 Read more »
Source: globeandmail - 🏆 5. / 92 Read more »