Decarbonization stalls; REIT capital offerings dip; turbocharging renewables
In this edition of?Insight Weekly, we explore the challenges to achieving net-zero emissions in the mining, chemical and shipping industries. Mining companies aiming for carbon neutrality need buyers to pay more for low-carbon products, with government support likely required, industry analysts and participants told S&P Global Commodity Insights. Miners face higher costs for low-carbon production, necessitating a price increase, often called a "green premium." In the chemical industry, progress on decarbonization commitments has stalled, jeopardizing 2030 targets and risking overshooting the Paris Agreement’s climate goals. Shipping companies are aligned with the International Maritime Organization's mid-century net-zero targets, but more regulations may be needed to ensure sustainable marine fuel production.
US equity real estate investment trust capital market activity dropped 19.4% month over month in August, with the industry pulling in $6.99 billion during the month, compared to $8.67 billion in July. However, the amount of capital collected during the month was more than six times higher than the $1.12 billion raised during August 2023, according to S&P Global Market Intelligence data.
The Federal Reserve's 50-basis-point interest rate cut alone will not be enough to turbocharge renewable energy investments and project finance, sector experts told S&P Global Commodity Insights. While interest rates have hampered project development in recent years, particularly for offshore wind and residential solar, other impediments like tariffs, interconnection bottlenecks and permitting reform still need permanent solutions before stock prices can recover and capital flows begin to accelerate, according to analysts and investors.
Path to Net-Zero in Focus
Path to net-zero: Miners need premium on low-emissions products to cover costs
Mining companies are looking for the market to accept a premium on low-carbon products to cover costs and will likely need government help to get it.
—Read more on S&P Global Market Intelligence.
Path to net-zero: Gap between climate ambition, adoption grows in chemicals
Efforts to reduce carbon dioxide emissions from the chemical sector have stalled as implementation lags.
—Read more on S&P Global Market Intelligence.
Path to net-zero: Shipping sector faces supply hurdle for green marine fuels
Further regulatory action is likely needed if shipping companies are to hit net-zero targets, industry observers and participants said, due to difficulties ensuring robust supplies of green fuels.
—Read more on S&P Global Market Intelligence.
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Deep Dives
In-depth features looking at the impact of major news developments in key industries.
Financials
Indian banks may see loan-to-deposit ratios improve after fiscal Q1 rise
The loan-to-deposit ratios of the majority of India's publicly listed banks increased in the April–June quarter, with HDFC Bank reporting the largest rise, S&P Market Intelligence data showed.
—Read more on S&P Global Market Intelligence.
US banks' efficiency ratios improved in Q2 2024 for second straight quarter
US banks' efficiency ratios improved again in the second quarter.
—Read more on S&P Global Market Intelligence.
US bank deposits return to growth, annual FDIC survey shows
The US banking industry's deposits ticked up 0.8% to $17.406 trillion as of June 30 from $17.270 trillion a year earlier, when deposits fell for the first time on record, according to Summary of Deposits data from the Federal Deposit Insurance Corp.
—Read more on S&P Global Market Intelligence.
Insurance
Rising premiums, shrinking ratios fuel solid Q2 for US homeowners insurers
Insurers booked a 13.6% year-over-year increase in homeowners direct written premiums to $46.16 billion, while loss ratios fell 12 percentage points to 79.1%.
—Read more on S&P Global Market Intelligence.
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Real Estate
US equity REIT capital offerings down almost 20% MOM in August
US real estate investment trusts raised $6.99 billion through capital offerings in August, a decline of about 19.4% from $8.67 billion in July, but over a sixfold increase from $1.12 billion recorded a year earlier.
—Read more on S&P Global Market Intelligence.
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Private Equity
Private equity investment volume in consumer staples to reach 5-year low
The volume of private equity and venture capital investments in the global consumer staples sector could hit a five-year low in 2024, according to S&P Global Market Intelligence data.
—Read more on S&P Global Market Intelligence.
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Credit and Markets
Global economic outlook: September 2024
The US Federal Reserve started its long-awaited easing cycle with a bang.
—Read more on S&P Global Market Intelligence.
Fed's big cut boosts inflation risk, odds of a policy correction
The US Federal Reserve cut interest rates by 50 basis points, a move some analysts believe was overkill.
—Read more on S&P Global Market Intelligence.
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Energy and Utilities
Renewables sector needs more than an interest rate cut to ramp up spending
Interest rates have hampered project development in recent years, but other impediments like tariffs, interconnection bottlenecks and permitting reform persist.
—Read more on S&P Global Market Intelligence.
Gas ban opponents try new approaches as 'fuel choice' bills stall
A Washington ballot initiative will let voters weigh in on electrification mandates, while evolving building decarbonization policy could test the scope of laws that outlaw gas bans in 26 states.
—Read more on S&P Global Market Intelligence.
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Technology, Media and Telecommunications
451?Research: Powering AI – Opportunities, tensions in datacenter and energy markets
Major datacenter builds to accommodate exploding AI demands are already underway. Yet questions about exactly what to build, and how much, remain unanswered. How can sustainable development of GenAI be achieved without compromising its potential?
—Read more on S&P Global Market Intelligence.
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Metals and Mining
August drill hits: Uranium Energy hits top-ranked intercept at Roughrider
In other drilling, NGEx Minerals reported the top-ranked copper intercept from its Lunahuasi project in Chile.
—Read more on S&P Global Market Intelligence.
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The Week in M&A
Deal Tracker: Europe's infotech M&A activity hits 13-month low in August
Read on S&P Global Market Intelligence .
ACNB-Traditions Bancorp deal ends whole-bank M&A drought in Pennsylvania
Read on S&P Global Market Intelligence .
Oil, gas deal tracker: $11B deal drives August M&A activity
Read on S&P Global Market Intelligence.
Legal & General to sell CALA Group; American Healthcare REIT buys Trilogy REIT
Read on S&P Global Market Intelligence.
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The Big Number
—Read more on S&P Global Market Intelligence.