Torys' Capital Markets 2012 Mid-Year Report

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Market practices, as well as deal documentation, will evolve in response to the new landscape of SEC regulation brought about by the JOBS Act.

(PRWEB) June 28, 2012

Capital Markets 2012 Mid-Year Report

If uncertainty in the capital markets is not the new normal, it has at least persisted for several quarters. Many of the themes that clouded the outlook for the markets in mid-2011 remain the same for mid-2012: European stagnation; political debate between austerity and stimulus; concerns about the lack of consumer spending in China; and in Canada, the uncertain future ownership of the TSX.

Recent elections in Europe, the pending election in the United States and the likelihood of fiscal and monetary stimulus in China point to a policy shift to emphasize growth at the expense of austerity, later in the year. Equity markets may enjoy a corresponding rebound at that time. In the meantime, as in 2011, Canadian investors have continued to favour issuers with high yield and predictable earnings.

Canadian regulators have sought to address issues of fairness and transparency in the Canadian market. The Canadian government is taking steps to ease federally regulated financial institutions off their reliance on federal guarantees to support their financing needs. In the United States, the federal government has sought to alleviate some of the expense and complexity of the daunting U.S. IPO process by passing the JOBS Act.

While capital raising on stock exchanges is relatively slow, capital raising for infrastructure transactions is growing and poised to increase dramatically. For Canadian banks, the implementation of the Basel Committee’s requirements on non-viable contingent capital looms on January 1, 2013, but as yet there has been no first mover.

Torys LLP is a highly respected international business law firm with offices in Toronto, New York and Calgary. Our lawyers work together to offer seamless cross-border services to clients on both sides of the U.S.-Canada border and globally.

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