Today is Tuesday, September 27, 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 of Insight Weekly, we put a spotlight on the global slump in dealmaking. Only 14 U.S. bank M&A deals were announced in August compared with 17 deals in July. However, aggregate deal value jumped to $891.4 million from $457.5 million, according to S&P Global Market Intelligence. Due to tight monetary policy and increased regulatory scrutiny for large deals, some superregional banks are looking for nonbank M&A. In the European financial sector, 62 deals were recorded in August, the lowest monthly total year-to-date, according to Market Intelligence data. With the rise in the cost of financing, many companies in the tech space have suffered declines in valuations. In the oil and gas industry, the number of whole-company and minority stake deals declined to 21 in August from 32 a year ago.
Aggressive interest rate hikes to tame inflation have led to an 18.9% slump in gold prices since March, according to S&P Global Market Intelligence data. The price of gold fell $389 per ounce to $1,667.10/oz on Sept. 15 from a peak of $2,056.10/oz on March 8. Some analysts see the retreat as a blip and predict higher prices in the years ahead.
Transaction banking revenues have reached their highest levels since the global financial crisis, as the industry benefits from interest rate hikes and huge corporate demand for financing. The world’s 10 largest transaction banks reported combined revenue of $15.6 billion in the first half of 2022, according to data by Coalition Greenwich, an S&P Global-owned company. Supply chain disruptions resulting from Russia’s invasion of Ukraine in sectors such as agricultural commodities and energy have led to a greater corporate need for supply chain finance and commodity trade finance.
We also feature our author, Sarah Cottle, sharing three top research highlights in our Insight Monthly video.
Insight Monthly, September 2022
See a recap of the top three research highlights by S&P Global Market Intelligence for September 2022:
—Read the full article from S&P Global Market Intelligence
- In Focus: Fall in M&A Deals
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Bank M&A 2022 Deal Tracker: 14 deals announced in August
The number of U.S. bank M&A deals dropped to 14 in August from 17 in July, but the aggregate deal value nearly doubled to $891.4 million during the same period.
—Read the full article from S&P Global Market Intelligence
European financials M&A activity slumps to YTD-low in August
Only 62 deals were reached in the European financial sector in August, the weakest month since the beginning of 2022, according to S&P Global Market Intelligence data.
—Read the full article from S&P Global Market Intelligence
Oil, gas deal tracker: M&A value plunges YOY in August despite $9B deal
The combined value of whole-company and minority-stake deals dropped about 42% from the year-ago period.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Financials
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Transaction banking revenues hit highest level since global financial crisis
The world's 10 largest transaction banks posted combined revenue of $15.6 billion from cash management and trade finance in the first six months of 2022, up from $12.8 billion in the same period last year, according to new data.
—Read the full article from S&P Global Market Intelligence
Only 1 US bank crosses key $10B asset mark in Q2
While just one U.S. community bank crossed $10 billion in total assets at the end of the second quarter, another eight sat right below the threshold, with at least $9 billion in total assets.
—Read the full article from S&P Global Market Intelligence
US banks exceeding CRE regulatory guidance hit multiyear high in Q2
Also, the delinquency rate on commercial real estate loans at U.S. banks rose by 1 basis point for the second quarter in a row.
—Read the full article from S&P Global Market Intelligence
Bonus cap removal: What it would mean for UK banks
Britain's banks may be able to offer higher bonus pay and more effectively compete with banks around the world for executive talent if the country scraps an EU cap.
—Read the full article from S&P Global Market Intelligence
US-listed Chinese companies' homecoming to buoy mainland, Hong Kong exchanges
Authorities in the U.S. and China signed an agreement in August enabling inspections and investigations of registered public accounting firms headquartered in mainland China and Hong Kong.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Real Estate
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US REIT average short interest down 8 bps in 2nd half of August
The hotel sector had the biggest drop in average short interest, down 26 basis points, while the "other retail" segment had the biggest increase, gaining 4 basis points as of Aug. 31.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Metals & Mining
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Gold drops 18.9% since early March as policymakers try to restrain inflation
Interest rate hikes and other factors are driving down the price of gold, but some analysts see more bullish days ahead for the safe-haven asset.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Credit and Markets
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US Weekly Economic Commentary: Weak growth, high inflation
The outlook for US GDP growth remains weak for the third quarter and beyond. Total retail and food services sales rose 0.3% in August.
—Read the full article from S&P Global Market Intelligence
Short interest in communications, consumer stocks near 2022 low point
Short interest in communication services and consumer stocks at the end of August was at its lowest level since mid-January, S&P Global Market Intelligence data shows.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Technology, Media and Telecommunications
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US regulators scrutinize mobile data practices, raising enforcement questions
The Federal Communications Committee is looking to tighten standards to protect mobile geolocation data after finding inconsistent industry practices regarding data storage. The Federal Trade Commission may also step in.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Energy and Utilities
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'Stacked' tax credits make green hydrogen economic for 1st time in US – report
The impact of the Inflation Reduction Act is especially dramatic for green hydrogen-fueled power plants, which would benefit from three tax credits simultaneously.
—Read the full article from S&P Global Market Intelligence
Global power firms pledge to cooperate, coordinate move to electrification
The accord left little or no room for direct natural gas use in the movement to electrify the globe's energy grid as part of the effort to slow climate change.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Insurance
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Workers' comp Q2 loss ratios improve as Hartford, Travelers release reserves
U.S. workers' compensation premiums grew 8.2% year over year in the second quarter, and the industry's direct loss ratio improved by 2.0 percentage points.
—Read the full article from S&P Global Market Intelligence
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- The Week in M&A
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Store Capital privatization hints at further life for REIT M&A
SoftBank eyeing investment options after heavy tech losses in Vision funds
Deal Profile: Southern Missouri Bancorp to acquire Citizens Bancshares in $140M deal
M&A Replay: Agnico's $580M JV deal with Teck leads mining M&A for week ended Sept. 16
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Written and compiled by Louis Bacani