Equity Capital Market - ECM

AAA

DEFINITION of 'Equity Capital Market - ECM'

A market that exists between companies and financial institutions that is used to raise equity capital for the companies. Some activities that companies operate in the equity capital markets include: overall marketing, distribution and allocation of new issues; initial public offerings, special warrants, and private placements. Along with stocks, the equity capital markets deal with derivative instruments such as futures, options and swaps.

INVESTOPEDIA EXPLAINS 'Equity Capital Market - ECM'

Equity capital markets are very dependent on the information provided by companies regarding their current financial situations and estimates of future performance. Equity capital market teams from different investments banks are responsible for helping companies execute primary market transactions by managing the structure, syndication, marketing and distribution.

The major players within the ECMs are large financial institutions such Goldman Sachs, Citigroup and UBS.

RELATED TERMS
  1. Capital Markets

    Markets for buying and selling equity and debt instruments. . ...
  2. Stock Market

    The market in which shares of publicly held companies are issued ...
  3. Investment Bank - IB

    A financial intermediary that performs a variety of services. ...
  4. Capital Markets Group

    A division within a larger company that uses its expertise in ...
  5. Canadian Capital Markets Association ...

    A nonprofit organization that was created to analyze issues arising ...
  6. Accelerated Bookbuild

    A form of offering in the equity capital markets. It involves ...
Related Articles
  1. Interpreting A Company's IPO Prospectus ...
    Fundamental Analysis

    Interpreting A Company's IPO Prospectus ...

  2. 5 Tips For Investing In IPOs
    Investing

    5 Tips For Investing In IPOs

  3. What does 'going public' mean?
    Entrepreneurship

    What does 'going public' mean?

  4. How does an IPO get valued? What are ...
    Investing

    How does an IPO get valued? What are ...

comments powered by Disqus
Hot Definitions
  1. Passive ETF

    One of two types of exchange-traded funds (ETFs) available for investors. Passive ETFs are index funds that track a specific ...
  2. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another ...
  3. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  4. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
Trading Center