Companies raised $780.2 billion in equity in 2017, up 19 percent from $656.4 billion last year, Thomson Reuters Equity Capital Markets (ECM) data up to Dec. 26 showed.

Global proceeds from initial public share offerings (IPOs) rose by 35 percent to $178.6 billion in 2017. However, overall issues and the global IPO market fell short of 2014-15 cycle peaks.

European bank rights issues continued to dominate equity capital raising in 2017, with UniCredit (>> UniCredit SpA), Deutsche Bank (>> Deutsche Bank), Credit Suisse (>> Credit Suisse Group) and Banco Santander (>> Banco Santander) collectively raising almost $35 billion. The biggest 2017 IPO was Snap Inc (>> Snap Inc) in the United States which raised $3.9 billion in March.

"We expect volume to be higher in 2018 but the composition will probably be different. The cycle of balance sheet repair is coming to an end and instead we're going to see larger IPOs, spin-offs and some rights issues to finance acquisitions," said Craig Coben, head of global Equity Capital Markets (ECM) at Bank of America Merrill Lynch.

Among the big ticket issues, bankers continued to look to the potential listing of U.S. tech unicorns - companies that have achieved a $1 billion valuation without tapping the stock markets - such as Uber and Airbnb.

In Europe, a large rights issue to help Bayer (>> Bayer) fund its planned $66 billion takeover of Monsanto (>> Monsanto) was anticipated.

"There could be other geopolitical shocks but those things aside and assuming continued low volatility, we expect issuance to be higher next year," Coben said.

Shrugging off tensions between the United States and Russia and North Korea, as well as protracted conflicts in the Middle East, the CBOE Volatility Index, or VIX <.VIX>, continued to hover around all-time record lows at the end of 2017.

Buoyant commodity prices alongside a pullback in U.S. bond yields and the dollar propelled world stocks to new record highs on Thursday, signalling the rally would likely extend into 2018. [MKTS/GLOBAL]

Investment bankers also said they expected the return of emerging market issuance, highlighting Brazil, Turkey and Russia among resurgent markets.

Morgan Stanley (>> Morgan Stanley) rose to the top of the league table for global ECM issuance overall and global IPOs, despite JP Morgan (>> JP Morgan Chase & Company) coming top in Europe and Americas.

Growth in equity raising for British companies lagged behind their European counterparts in part because of worry over Britain's future economic relationship with Europe.

British companies raised 2.5 percent more equity in 2017 compared to 2016, while German companies, for example, more than doubled their issuance.

Against a backdrop of record highs for the main London <.FTSE> index, a series of cancelled listings contributed to investor angst.

"Investors are approaching U.K. domestic businesses with a note of caution. But it's a case-by-case issue," said Ken Robins, head of ECM in Europe, Middle East and Africa at ‎Citi (>> Citigroup).

"There is going to be scrutiny. But the U.K. is going to see multinational listings," Suneel Hargunani, Citi's head of syndicate ECM in the region, added.

(Reporting by Dasha Afanasieva; Editing by Adrian Croft)

By Dasha Afanasieva