Capital Markets Fact Book, 2020

Capital markets recognize and drive capital to the best ideas and enterprises. Coupled with the free flow of capital, innovation is an integral component to a country for supporting job creation, economic development and prosperity. Markets facilitate the transfer of funds from those who seek a return on their assets to those who need capital and credit to expand.

Clients benefiting from healthy capital markets include not just individual investors but also institutional investors, governments and corporations. Capital, raised through equity and debt, can be used to grow businesses, finance investments in new plant, equipment and technology and fund infrastructure projects. This creates jobs and flows money into the economy. Additionally, individuals and businesses can invest in securities to generate wealth.

The SIFMA Capital Markets Fact Book is an annual reference containing comprehensive data on the capital markets, investor participation, savings and investment, and securities industry.

 

 

2020 Fact Book Highlights

Chapter 1 – U.S. Capital Markets

In 2019, the securities industry raised $2.1 trillion of capital for businesses through debt and equity issuance activity in the United States, a 13.0% decrease from the previous year.

Equity issuance, including common and preferred shares, totaled $228.1 billion in 2019, a 2.9% increase year-over-year. Initial public offering (IPO) volume, excluding closed-end funds, was $48.8 billion in 2019, down 2.1% from $49.9 billion in 2018. Follow-on, or secondary, issuance totaled $145.3 billion in 2019, down 6.0% from 2018.

Issuance of corporate debt, asset-backed securities and non-agency mortgage-backed securities totaled $1.8 trillion in 2019, down 14.6% from 2018. Non-convertible corporate debt issuance increased by 6.2% to $1.4 trillion in 2019, while convertible corporate debt decreased 98.0% to $0.8 billion. Non-agency mortgage-backed securities issuance fell 56.7% to $116.9 billion in 2019, while asset-backed securities issuance volume fell 40.0% to $310.2 billion.

U.S. long-term municipal bond issuance totaled $426.0 billion in 2019 a 22.8% increase from $346.8 billion in 2018. Of the total, 57.8% was issued in form of revenue bonds, 37.7% in general obligation bonds and the remainder in private placements.

U.S. merger and acquisition announced deals totaled $1.9 trillion in 2019, a 5.9% increase from $1.8 trillion in 2018, while the value of completed M&A deals decreased by 8.5% to $1.7 trillion.

The U.S. stock markets recorded double-digit increases in 2019: the Dow Jones Industrial Average rose by 22.3%, ending the year at 28,538.44, the Standard & Poor’s 500 Index was up 28.9% to close 2019 at 3,230.78; and the NASDAQ Composite Index increased by 35.2% to 8,972.60.

In 2019, the average daily volume for NYSE-listed stocks was $137.9 billion and 3.6 billion shares, down 7.9% 2.1%, respectively, year-over-year. For NASDAQ-listed stocks the average daily volume was $108.6 billion and 2.1 billion shares, down 10.3% and 4.5%, respectively, year-over-year.

Chapter 2 – Global Capital Markets

Global long-term bond market issuance increased by 19.7% to $21.0 trillion in 2019 while the global equity issuance decreased by 0.9% to $540.5 billion.

Global bond markets outstanding value increased by 5.4% to $105.9 trillion while global equity market capitalization increased by 23.8% year-over-year to $95.0 trillion in 2019.

U.S. gross activity (purchases and sales) in foreign securities increased to $36.9 trillion in 2019, up 9.3% from 2018. Foreign gross activity in U.S. securities increased by 12.7% to $82.1 trillion in 2019.

Chapter 3 – Investor Participation

Federal Reserve Board data showed the value of U.S households’ liquid assets increased by 16.9% to $49.5 trillion in 2019 from $42.4 trillion in 2018. Of total liquid assets held by U.S. households, 41.6% was in equities, 25.7% in bank deposits and CDs and 17.9% in mutual funds, with the remaining 15.7% split between U.S. Treasury securities; agency & GSE securities; municipal bonds; money market funds; and corporate bonds.

Chapter 4 – Savings & Investment

Total value of U.S. retirement assets increased by 10.8% to $39.0 trillion in 2019, according to Federal Reserve Flow of Funds accounts. Total pension assets rose 7.8% to $28.0 trillion while assets held in individual retirement accounts increased by 19.2% to $11.0 trillion.

Chapter 5 – U.S. Securities Industry

The number of FINRA-registered broker-dealers decreased by 2.5% to 3,417 in 2019.

Pre-tax net income (profits) for NYSE member broker-dealers rose to $28.1 billion in 2019, up 2.8% from $27.3 billion in 2018. Gross revenues totaled $250.4 billion in 2019, up 9.8% from the previous year, while total expenses rose by 10.7% to $222.3 billion.

National securities industry employment, as reported by the U.S. Department of Labor, reached 971,000 jobs in 2019, an increase of 0.9% from 962,200 year-over-year.

About the Report

The SIFMA Capital Markets Fact Book is an annual reference containing comprehensive data on the capital markets, investor participation, savings and investment, and securities industry. The Fact Book amasses data from dozens of sources into a single, easily accessible reference tool to analyze key industry statistics.

Credits

SIFMA Research

Katie Kolchin, CFA, Director of Research
Justyna Podziemska
Ali Mostafa