Companies raised $648.9 billion in equity during 2016, against $873 billion last year, Thomson Reuters Equity Capital Markets (ECM) data up to Dec. 28 showed.
Money raised from IPOs was down by almost a third at $130.6 billion despite equity indices touching record highs in the latter stages of the year.
"The markets were volatile this year. There were times when IPOs got launched but didn't get done, and there were also fewer rights offerings," said Achintya Mangla, head of ECM in Europe, Middle East and Africa (EMEA) at JP Morgan
"2017 will continue to be uncertain and volatile and I'd expect IPO volumes will be in line with this year."
Mangla added that, though he does not expect IPO activity to rise, there could be higher overall ECM volumes with a potential increase in rights issues and acquisition-related financing.
The year's biggest IPO, for Postal Savings Bank of China <1658.HK> in September, was priced at the lower end of an indicative range and traded flat before falling more than 10 percent.
Share price falls following two big European IPOs -- payments company Nets
Market volatility was blamed for some of the canceled listings, which normally require a window of at least four weeks to complete. In Europe, IPOs more than halved in volume terms compared with 2015.
That could continue in 2017, with elections in France, Germany and the Netherlands, as well as Britain formally triggering the process of leaving the European Union, expected to limit the number of suitable windows to launch IPOs.
WAITING IN THE WINGS
However, preparations are under way for a number of big deals that could help to lift ECM activity in the coming year.
A planned IPO of Siemens'
There is also the potential that messaging app Snapchat's decision to file for an IPO could persuade other technology businesses to head for public markets.
"Tech companies have been able to achieve very attractive valuations in the private markets, but some of the heat has come out of the private funding arena and the IPO route is looking more attractive," said Tom Johnson, Barclays' co-head of equity capital markets in EMEA.
"If a few large tech company IPOs go well in the United States, we would hope to see more here, too."
However, some bankers cautioned against taking investors' apparent rotation toward equities and away from fixed income as a guarantee for easy share issues.
"It might look like a bull market, but investors will still be selective," Johnson said.
"Market performance has been mixed this year so there is some caution and valuations have to reflect that."- Reuters
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