Challenges for European banks; Japan's IPO slowdown; carmakers' supply woes
Today is Tuesday, May 03, 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 challenges confronting banks in Europe. As the war in Ukraine drags on, European lenders operating in Russia must either make a hurried and potentially costly exit or stay put and deal with international sanctions and reputational risks. In France, the re-election of President Emmanuel Macron offers a brief respite to lenders, which are facing up to a deteriorating outlook as the war impacts revenues and asset quality. Elsewhere, major Nordic banks aim to press ahead with efforts to reduce exposure to the oil and gas sector even as Norway ramps up fossil fuel production.
Japan's IPO market may see a further slowdown in the second quarter and beyond after market volatility and inflation forced seven companies to shelve proposed listings in February and March, analysts said. Seven of the 10 largest debuts in the first quarter were trading below their IPO prices as of mid-April, according to S&P Global Market Intelligence data.
Russia's invasion of Ukraine is adding stress to the global auto supply chain, threatening to send surging prices for new cars even higher. Sanctions against Russia are impacting energy prices, agricultural goods and raw materials, and the conflict is prompting logistical challenges and production stops related to operations on the western Ukrainian border, according to S&P Global Mobility. Supply shortages will hit auto production for years to come, offering little relief to high prices.
Challenges for European Banks In Focus
European banks face tough choice as they weigh Russia pullback
Société Générale leads five banks rapidly exiting Russia, with the French lender saying it will take a loss of about €3.1 billion on the planned sale of its local unit.
— Read the full article from S&P Global Market Intelligence
French banks face up to mounting challenges as election shock is avoided
Relief at the re-election of Emmanuel Macron will be short-lived as France's largest lenders face up to the problems posed by the impact of the war in Ukraine on revenues and asset quality.
— Read the full article from S&P Global Market Intelligence
Nordic banks to further cut oil, gas exposure despite Europe energy crisis
Nordic banks are seeing better asset quality after efforts to reduce oil and gas exposure in the past two years. A growing focus on environmental, social and governance concerns and transition risk will likely prompt a further reduction.
— Read the full article from S&P Global Market Intelligence
Deep Dives
In-depth features looking at the impact of major news developments in key industries.
Credit and Markets
Japan IPOs stumble after promising start as market volatility clouds outlook
The number of new listings in Japan in 2022 will likely be lower than in 2021, when 125 companies listed in the country, the most in 15 years, according to Katsumi Udagawa, a manager at the research and strategy department of Ichiyoshi Securities Co.
— Read the full article from S&P Global Market Intelligence
Fed rate push offers little immediate relief to overheated housing market
The Fed's plans to aggressively hike rates this year has already driven benchmark mortgage rates to the highest point since 2010, but severe supply constraints could delay impacts of a monetary policy shift.
— Read the full article from S&P Global Market Intelligence
Financials
Australian banks' return to bond market to raise costs, pressure margins
Australian banks, which have enjoyed years of cheap funding, may see increased pressure on their margins as they return to bond markets to raise capital.
— Read the full article from S&P Global Market Intelligence
Swiss, UK banks among least efficient in Europe in Q4'21
Swiss lender Credit Suisse Group had the highest cost-to-income ratio among Europe's biggest banks, S&P Global Market Intelligence data shows, while three of the five U.K. banks in the sample were in the top 10.
— Read the full article from S&P Global Market Intelligence
Insurance
Commercial auto insurers see highest premiums, lowest combined ratio since '17
Progressive remains the dominant player in commercial auto with the highest premiums and growth rate, to go along with the second-lowest combined ratio among the top 20 companies in the sector.
— Read the full article from S&P Global Market Intelligence
Private Equity
Global venture capital investment plunges in March
Although investment size was down, the total number of deals announced in March increased by 1.2% from the 1,981 announced transactions in March 2021.
— Read the full article from S&P Global Market Intelligence
Real Estate
Pension funds boost investments in multifamily, industrial, office REITs
Institutional investors are also becoming more interested in nontraditional property sectors like build-to-rent single-family homes, data centers, student housing, medical offices and biotechnology lab space.
— Read the full article from S&P Global Market Intelligence
领英推荐
Supply Chain
Russia-Ukraine supply woes threaten to drive surging auto inflation higher
The conflict is adding stress on the long-suffering semiconductor supply chain and impacts production of other key parts.
— Read the full article from S&P Global Market Intelligence
Technology, Media and Telecommunications
Analysts question billionaire Elon Musk's vision for Twitter
The microblogging company already faced questions about its content moderation practices and slowing user growth. Even with Musk at the helm and a streamlined executive decision-making process, analysts say many key challenges would remain.
— Read the full article from S&P Global Market Intelligence
Metals and Mining
China's plan to cut output might bail out steelmakers facing COVID-19 impact
China pledged to cut crude steel output in 2022, the country's state planner said April 19. The move is likely a lifeline for steelmakers suffering losses due to surging raw material prices and the COVID-19 demand shock.
— Read the full article from S&P Global Market Intelligence
Energy and Utilities
Activist investors turning up heat on oil majors in proxy voting season
Major oil and gas companies from Europe and the U.S. are set for landmark shareholder votes on emissions-reduction strategies during the upcoming proxy season. This follows a string of high-profile successes by activists in 2021.
— Read the full article from S&P Global Market Intelligence
Utility stocks shrug off inflation, interest rates, but rougher road could await
High inflation and rising interest rates are not dragging utility stocks, but ballooning customer bills and rising renewable project costs could eventually impact balance sheets in the sector.
— Read the full article from S&P Global Market Intelligence
The Week in M&A
Deal Profile: Elon Musk's $44B Twitter deal ranks among tech's largest transactions
Natus Medical's $1.2B go-private deal could renew PE interest in medtech
Deal Profile: First Bancshares to acquire Beach Bancorp in $116.7M deal
Oil, gas deal tracker: M&A activity falls YOY in March
The Big Number
Trending
Read more on S&P Global Market Intelligence ?and @BrianJScheid 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.?
Additional Insights from S&P Global Market Intelligence
Check out other weekly newsletters highlighting our exclusive features and analysis:
ESG Insider: News and insights into environmental, social and governance developments driving change in business and investment decisions. Click here to subscribe.
Policy Intel: Explore exclusive news and research on policy and regulatory developments in the U.S. and around the globe. Click here ?to subscribe.
Private Equity Pulse: Need-to-know investments. Sharp insight. Private Equity Pulse offers our top picks of global private equity news stories. Click here to subscribe.
NEXT: Stay up to date on how technology is reshaping the future of industries across global markets. Click here to subscribe.?
Written and compiled by Louis Bacani