In the lucrative business of underwriting and selling a company's stock, J.P. Morgan led the world's banks this year, earning an estimated $2.2 billion in fees, or nearly double what it hauled from the deals last year.
Across the investment banking industry, equity capital market (ECM) underwriting was the main driver of fees, marking a change in a sector where money made from advising on mergers and acquisitions is traditionally the cash cow.
The ECM burst was driven by resurgent stock markets across the globe and the need for companies to raise cash after last year's market plunge.
Global ECM activity reached $866 billion this year, up 25 percent from 2008. Of that total, follow-on activity totaled
$669 billion, with nearly half of that coming from banks seeking capital after the financial crisis took its toll.
J.P. Morgan Chase & Co's top ECM status this year came from 383 deals worth $98.5 billion, according to Thomson Reuters.
Bank of America Corp earned a No. 2 spot on the global ECM rankings (298, $72.4 billion), a surprising bump up from No. 4, given the turmoil that hit the bank beginning late last year.
The third slot went to Goldman Sachs Group Inc (251, $71.3 billion).
Huge bank stock offerings early in the year from HSBC Holdings Plc , BofA and Japan's SMFG <8411.T>, weighed on the ECM data.
Asian IPOs led the ECM story in the second half of the year.
Eight of the world's top 10 IPOs came from Asia. Hong Kong was by far the world's most active stock market for IPOs, surpassing exchanges in New York and Europe.
Carve-out IPOs did particularly well this year, said Bank of America Merrill Lynch Global Head of Equity Capital Markets Lisa Carnoy.
In general, investors made a lot of money on carve-outs because they're mature, proven companies, she said.
She expects more carve-outs in 2010 -- companies carving out similar businesses in different regions, businesses that are different from the parent company, or businesses with different growth profiles from the parent.
Carnoy said investors are still cautious, but she expects the market to improve further in 2010, and added there could be more healthcare and tech IPOs.
We still have sectors that have been relatively quiet, including growth sectors like healthcare and tech, which are usually the lion's share of IPO market, she said.
Carnoy said U.S. investors have more sector-dedicated funds and are often willing to pay a premium for tech, healthcare, and new media stocks.
As of last week, Hong Kong was on pace to raise more than $25.6 billion in IPO proceeds this year, its second largest total in the last decade and more than triple last year's figures.
Quarterly U.S. IPO volume reached $7.8 billion, its highest in 7 quarters. By comparison, only two IPOs hit the London Stock Exchange this year.
In the top 10 global ECM rankings, only two other banks aside from BofA moved two or more spots in the rankings: Citigroup Inc went from 5th last year to 8th this year; RBS went from 12th to 10th.
The IPO market, itself, has had difficulties in getting continuous traction, but at the end of the day we are -- and we will continue to be -- in a deal-by-deal specific environment, said Deutsche Bank Global Co-Head of Equity Capital Markets Mark Hantho.
There was a larger volume of IPOs this year than expected and the visibility on the backlog for 2010 is encouraging, he said.