EU Prospectuses 2024
The European Securities and Markets Authority (ESMA) published the 2024 edition of its Market Report on EU Prospectuses ('the Report'). The Report analyses the various trends in prospectus activities in the context of the European Union, while highlighting developments in the realm of capital raising through equity and debt instruments, with a specific focus on initial public offerings (IPOs) and corporate bonds issuance.
The Report sheds a light on the arguably cumbersome capital markets sphere, especially in the context of business aiming to raise funds through IPOs. The Report demonstrates a rise in equity issuance for 2024 when compared to 2023. On the other hand, the realm of corporate bond issuance maintained its high level, further demonstrating the influence of debt as the main avenue for financing in the context of European businesses.
Apart from this, the Report highlights the notable and continuous reliance on base prospectuses for debt issuance, highlighting the efficiency attached with these instruments in capital markets. A slight decrease was encountered in approved prospectuses in 2023 when compared to the previous year, testifying caution among investors, as a consequence of various regulatory challenges.
ESMA highlights various trends which align with the developments in the Maltese capital markets. The Malta Financial Services Authority (MFSA) will continue following EU regulatory standards, ensuring that the attractiveness of the domestic market is upheld. The decline in equity issuance has, undoubtedly, been felt, with Malta seeing a decrease in IPOs coming to fruition. Despite this, Malta's bond market is still a robust one, benefitting efficiently from investor demand for returns.
Debt issuance in Malta is highly prominent, demonstrating the jurisdiction's alignment with the EU-wide trend. Businesses are heavily seeking alternative avenues for financing, due to factors such as economic and geopolitical tensions worldwide. Base prospectuses have greatly aided in easing debt securities issuance in the Maltese context, signifying a greater degree of efficiency.
Malta's robust regulatory framework, together with the continuously evolving EU capital markets regime, means that it is perfectly capable of withstanding the possible challenges which may come with the territory of its minute market, together with other challenges brought about by various compliance obligations. The Report demonstrates this to a tee.
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