Already struggling at home with weak revenues and tough new
capital and leverage requirements, investment banks are now also facing a slump
in their once most promising business - emerging markets.
Fees are plummeting because of a sharp decline in first-time
share listings and mergers across such economies. Given the shaky economic outlook and weak
equity valuations it is hardly surprising that global deal-making volumes are
taking a hit. But the slump in emerging markets, an area banks had most hoped
would drive growth, is especially precipitous.
Western banks conducted over half of all equity financing
deals in emerging markets last year, compared with just 22 percent back in
2005, James Sproule, head of capital markets research at Accenture in London,
has said. The big money came from…
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