The remainder of this summer will be characterised by a surge in rights issues as companies brace themselves for the combined challenges of a slowing economy and rising inflation, says RLAM's Martin Cholwill.
In the wake of the banking crisis, Cholwill, who runs the Royal London Equity Income Trust, believes we are now seeing the credit crunch seeping through to the broader economy, with debt becoming more costly and harder to come by. He believes that Royal Bank of Scotland's much publicised rights issue last month could prove to be the starting point for the re-emergence of a trend in companies taking measures to raise capital, and not just in the banking sector. Cholwill said: "The days of easy credit are over for a fair while because I don't think banks are suddenly going to respond. ...
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