The £100 billion begging bowl

As banks continue to restrict the availability of easy credit, new analysis by financial website The Motley Fool - Fool.co.uk reveals the market sectors that are most likely to ask shareholders for more money through rights issues, placings or open offers. Since the start of 2008, companies have begged shareholders for more than £100 billion.

Miners digging around for cash

In 2008, one in three companies that handed around the corporate begging bowl came from the mining sector. They did so on 200 separate occasions and accounted for almost a third of all fund-raising exercises. Mining companies raised over £2 billion.

The finance sector came in second with 146 separate fundraisings. But although financial firms went around with the begging bowl on fewer occasions, they raised 25 times more money than miners. The finance sector collected a whopping £49 billion, with banks accounting for the vast majority of this (£47 billion).

Royal Bank of Scotland (RBS) raised by far the most money, with over £27 billion in total. But other banks such as Barclays and the now defunct HBOS also raised large sums.

Miners are at it again

In the first five months of 2009, miners again topped the table, accounting for over one in three fundraisings. The financial sector was second yet again but biotech companies weren't far behind in third.

Once more, when it comes to the amount raised, it's the financial sector that is leading the way. In the first five months of 2009, financial companies have raised £24 billion, with HSBC's £12.8 billion fundraising accounting for more than half of this total.

Mining companies have raised £5.9 billion so far this year, although this figure will increase soon with Rio Tinto's £10 billion fundraising due to complete in the next few weeks.

David Kuo, Director at The Motley Fool, comments: "In both 2008 and 2009 cash hungry banks and miners have been busy handing around the begging bowl. Together they account for almost half of all fundraising events on the market.

"We're all being weaned off our previous diet of cheap credit and now it is payback time. Investors are being asked to put their hands in their pockets to provide additional finance for cash-strapped businesses.

"Unless we see another downturn in the economy, it seems unlikely banks will be tapping their shareholders for large amounts again. However firms in other sectors may not be so fortunate.

"Increasing numbers of companies are finding that their lenders are not rolling over their debts and they are being forced to go to their shareholders to plug the gap.

"For some investors, this is a golden opportunity to buy a bigger stake in businesses at a discount. But for others, who cannot afford to do so, it will mean a dilution of their existing holdings."