Today is Tuesday, April 12, 2022, and here’s your weekly selection of essential intelligence on financial markets and the global economy from S&P Global Market Intelligence. Subscribe to be notified of each new Insight Weekly.
In this edition, we examine the current state of the M&A market in North America. After a record-breaking 2021, deal-making has slowed this year due to several factors, including the prospect of interest rate hikes in response to soaring inflation. Some sectors, such as insurance and technology, are seeing declines in deal volume or transaction values. Elsewhere, fintech M&A activity continues at a steady pace as banks look for new growth avenues.
Climate-related proposals compose the largest share of the record number of shareholder resolutions filed so far this proxy season. Climate proposals have surged this year amid growing investor concern over business risks that stem from increasingly extreme weather and other events affecting infrastructure and supply chains.
Demand for cryptocurrency is sustaining record levels of private equity and venture capital investment in blockchain, the technology that powers it. After raising a record $18.4 billion in 2021, blockchain businesses have attracted $5.03 billion in 2022 as of late March, double the annual amount invested in most of the five years to 2020, according to S&P Global Market Intelligence data.
- In Focus: M&A Market
-
Inflation puts dent in M&A after white-hot 2021
M&A deals in North America fell 16.7% from February 2021 to February 2022, according to the latest S&P Global Market Intelligence data.
—Read the full article from S&P Global Market Intelligence
Technology M&A values dive in Q1 even as volumes hit record
The prospect of higher interest rates hit equity markets hard in the first quarter, translating into a dip in M&A valuations. But deal volumes remained at a record high, and analysts expect acquirers to buy into the dip.
—Read the full article from S&P Global Market Intelligence
M&A volume dips YOY across insurance industry in Q1
Berkshire Hathaway's planned purchase of Alleghany was by far the largest insurance deal announced in the first quarter.
—Read the full article from S&P Global Market Intelligence
Steady M&A continues to deepen bank-fintech convergence
Banks are snapping up talent and digital capabilities from fintech acquisitions and partnerships, as the line between traditional definitions of banks and fintechs continues to blur.
—Read the full article from S&P Global Market Intelligence
-
- Deep Dives: Credit and Markets
-
Default risk rises across most US sectors in Q1
Healthcare carried the highest risk of defaults as of March 31, according to S&P Global Market Intelligence probability of default data.
—Read the full article from S&P Global Market Intelligence
Wider credit spreads unlikely to spook Fed on rates
Widening corporate credit spreads have given the Federal Reserve pause in previous rate hiking cycles, but healthy balance sheets could lead the Fed to prioritize tackling runaway inflation this time.
—Read the full article from S&P Global Market Intelligence
-
- Deep Dives: Technology, Media, and Telecommunications
-
Gauging Elon Musk's intentions for Twitter as he takes board seat
Elon Musk recently explored the possibility of launching his own social media network. "It is clear that he sees both a financial and a strategic incentive in owning such an asset," Truist Securities Managing Director Youssef Squali said.
—Read the full article from S&P Global Market Intelligence
Big fines can scare Big Tech, but enforcing Digital Markets Act is key – experts
European regulators recently approved the Digital Markets Act, a framework of new initiatives to curb the dominance of Big Tech companies and related entities that could shift Europe's digital landscape.
—Read the full article from S&P Global Market Intelligence
-
- Deep Dives: Real Estate
-
US housing market: 2022 opens with a 19.2% house price surge
The increase was "the fourth-largest reading in 35 years of history," according to S&P Dow Jones Indices Managing Director Craig Lazzara.
—Read the full article from S&P Global Market Intelligence
-
- Deep Dives: Financials
-
Poor management rating likely placed a large bank on FDIC's 'problem bank' list
The total assets of U.S. institutions designated as problem banks by the Federal Deposit Insurance Corp. jumped by almost $120 billion in the first quarter.
—Read the full article from S&P Global Market Intelligence
Merger targets lead best-performing US bank stocks in March
Overall, major exchange-traded U.S. bank stock returns continued to decline month over month, falling to negative 3.1% in March from 0.5% in February.
—Read the full article from S&P Global Market Intelligence
US minority banks grow faster, more profitable than broader industry in 2021
The 143 U.S. minority depository institutions insured by the Federal Deposit Insurance Corp. posted a median 1.22% return on average assets in 2021, according to S&P Global Market Intelligence data.
—Read the full article from S&P Global Market Intelligence
UK banks' buyback plans face risks from prolonged Russia-Ukraine war
While HSBC, Barclays, StanChart, NatWest and Lloyds do not have material direct exposure to the two countries, they could see second-order effects from the war caused by increasing economic risks.
—Read the full article from S&P Global Market Intelligence
-
- Deep Dives: Insurance
-
US P&C insurers' expense ratio falls to lowest level in 5 years
The U.S. property and casualty insurance industry saw a sharp decline in its expense ratio mainly due to a sharp year-over-year increase in net premiums written in 2021.
—Read the full article from S&P Global Market Intelligence
-
- Deep Dives: Private Equity
-
Cryptocurrency demand fuels record level of PE blockchain investment
Multiple return potential and increasing regulatory clarity are also attracting private capital to the technology.
—Read the full article from S&P Global Market Intelligence
-
- Deep Dives: Metals and Mining
-
Flush major miners target exploration assets over megadeal mergers
Fears of overpaying are tempering appetites for big-money deals and helping move activity to more bite-sized opportunities.
—Read the full article from S&P Global Market Intelligence
-
- Deep Dives: Energy and Utilities
-
National Grid sees US gas utilities as core to clean energy networks strategy
National Grid Chief Strategy and External Affairs Officer Ben Wilson explained why the company does not plan on divesting U.S. natural gas distribution assets, even as the company continues to exit its U.K. pipelines business.
—Read the full article from S&P Global Market Intelligence
Wind-turbine makers put 'profits over volume' as orders decline
The four largest turbine-makers from Europe and the U.S. recorded 44.3 GW of new orders in 2021, down 5.2% compared to 2020, as they prioritized profitability over market share in the face of inflationary pressure.
—Read the full article from S&P Global Market Intelligence
-
- Deep Dives: ESG
-
Climate resolutions top 'unprecedented' number of shareholder proposals in 2022
Growing investor concern over corporate climate risks, coupled with frustration over government inaction, contributed to a surge in shareholder activism this proxy season.
—Read the full article from S&P Global Market Intelligence
-
- This Week in M&A
-
Acquisition of Nielsen Holdings among 3 $10B-plus M&A deals in March
WindAcre weighs options as Wall Street cheers Nielsen deal
March infotech deal volume slides, big valuations hold
HDFC Bank's merger with parent to create Indian mortgage powerhouse
Geography, mortgage banking growth drove Massachusetts mutual bank deal
-
The Big Number
Trending
—Read more on S&P Global Market Intelligence and follow @seanlongoria on Twitter
Navigating Risks and New Realities
Geopolitical tensions are at an unprecedented high and markets are noticeably stressed. Explore the data and analysis you need to stay ahead of evolving conditions with insights on credit risk, supply chain, maritime & trade, economic & country risk, and more.
Written and compiled by Louis Bacani