Reversal in private placement appetite soon?

While borrowing costs have been lowered, market observers say that businesses still face difficulties in obtaining bank borrowings. “Banks are extra careful in lending and this has caused constraints in smaller and affected businesses to obtain loans and working capital, ” says an analyst.

THE spate of private placements has sprouted over the past few months as companies start to navigate between a surge in share prices and the tougher conditions of securing funding.

Listed companies have been proposing private placements for a number of reasons, with the most common reasons being the need to raise working capital and funds for operational expansion or business diversification.