By Daisy Ku

LONDON (Reuters) - Global equity capital markets activity rebounded in the second quarter as financial institutions scrambled to raise capital, but the bleak economic outlook means bankers are cautious for the second half, according to Thomson Reuters data release on Friday.

Issuance in initial public offerings, follow-on issues and convertible bonds amounted to $255.9 billion (128.76 billion pounds) in the second quarter, up 97 percent from the first quarter, but down 14 percent from the year-ago period, the data showed.

About one-fifth of the total was raised by Royal Bank of Scotland (RBS.L: Quote, Profile, Research), Swiss bank UBS AG (UBSN.VX: Quote, Profile, Research) and Lehman Brothers Holdings LEH.N, the smallest of the major Wall Street banks.

"With those deals, the market as a whole saw that as a sign that it was able to remove concern about the systemic risk in the market. That stimulated quite a rally," said John Crompton, head of Merrill Lynch & Co MER.N EMEA equity capital markets team.

"But we have moved away from a market that had systemic risk in mind to a market that is more concerned with economic issues," added Crompton, who was involved in the RBS and UBS transactions.

With the credit crisis at its eleventh month, the mix of rising inflationary pressure and slower global growth is denting investor appetite.

Early this month, HBOS HBOS.L, the biggest British home lender, was forced to defend its 4 billion pound ($7.90 billion) rights issue as its shares fell below the rights issue strike price amid weak demand.

Shares of Cadogan Petroleum (CADP.L: Quote, Profile, Research), a Ukrainian gas firm, have fallen more than 20 percent since their $299 million London market debut on June 18.