Jessica, a unicorn in nappies?

IGNORE the record share prices and what that would seem to suggest about the year unfolding on Wall Street. Activity has been so slow that many bankers off for their August holidays wondered if there would be any reason to return. That has abruptly changed. “Every product we have is busier post-Labour Day than pre-,” says J.D. Moriarty, of Bank of America Merrill Lynch, referring to the holiday on September 5th. Eighteen companies plan to list this month and a further 100 are getting ready, according to Renaissance Capital, a research firm.

Normally, a soaring stockmarket would be a fillip for all corners of finance. But until the holiday, the only consistently busy area this year had been the debt market. Low rates led borrowers to issue as many new bonds and refinance as many old ones as they could.

Elsewhere: no animal spirits. Investors seemed tired of punting or lacked funds. Their brokers were scared to encourage business because of a vastly complex new regulation, known as the “fiduciary rule”, introduced in April. Trading volumes—and commission income—were...Continue reading