Renewables lead capacity additions; bank mergers of equals up; nickel IPOs surge
Sarah Cottle
Growth-Focused Executive | GM | Driving Profitability & Operational Excellence in B2B Data, Research, Advisory | M&A Integration | Governance | Digital Transformation | Trusted C-Suite Advisor | Board Member
Today is Tuesday, May 09, 2023, 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 examine the outlook for the US power grid. Much like 2022, planned US capacity additions in 2023 are expected to be dominated by intermittent renewable resources, with more than 45 GW of intermittent solar generation alone planned to come online, according to an analysis of S&P Global Market Intelligence data. In its most recent Regional Transmission Expansion Plan, PJM Interconnection noted that solar made up 66% of the generation in its interconnection queue as of the end of 2022. In the Midcontinent ISO region, utilities are retiring fossil capacity in exchange for investments in renewable energy resources. But those exchanges are not happening fast enough to replace all the generation coming offline, making MISO "somewhat an area of concern," said Steve Piper, director of energy research for S&P Global Commodity Insights.
In what is shaping up to be a historically slow year for US bank M&A, merger of equals (MOE) makes up an unusually large portion of the deals announced so far in 2023. Banks have announced three MOEs through mid-April, compared with four transactions throughout 2022 when MOEs hit a five-year low. Investment bankers expect more MOE announcements this year as the wider dealmaking environment remains weak.
Indonesia's nickel mining boom has put global nickel IPOs on track for a multiyear high. Companies engaging in nickel mining and processing announced IPOs that aimed to raise an aggregate $1.36 billion in the first three months of 2023, the highest amount for the first quarter of any year, according to an analysis of Market Intelligence data.
US Generation Capacity in Focus
Outlook 2023: Renewables continue to dominate US planned capacity additions
More than 45 GW of intermittent solar generation is projected to come online in the US in 2023, an S&P Global Market Intelligence analysis shows, adding to the challenge grid operators face in keeping the lights on.
—Read the full article from S&P Global Market Intelligence
Outlook 2023: PJM seeing a surge in solar, less new natural gas
The PJM Interconnection looks to add more than 11 GW of capacity in 2023, with 2,345 MW of retirements almost completely tied to the deactivation of coal-fired power plants, according to an analysis of S&P Global Market Intelligence data.
—Read the full article from S&P Global Market Intelligence
Outlook 2023: MISO expects net addition of 8.9 GW, may face capacity strain
The Midcontinent ISO region "is somewhat an area of concern," said Steve Piper, director of energy research for S&P Global Commodity Insights. "We're assessing MISO as tight. There's a pretty immediate need for generation investment."
—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.
Financials
Mergers of equals more attractive to community banks amid deal doldrums
In what is shaping up to be a historically slow year for bank M&A, mergers of equals make up an unusually large portion of the deals announced so far in 2023. The year's three mergers of equals represent nearly 11% of US bank deals announced in 2023.
—Read the full article from S&P Global Market Intelligence
Total failed bank assets hit new annual record high as First Republic falls
First Republic was unable to recover from massive outflows of low-cost deposits that put it on a path to capital-destroying losses.
—Read the full article from S&P Global Market Intelligence
S&P webinar: US banks to stockpile 'precious' deposits with recession forecast
Tighter credit conditions are expected to push funding costs higher.
—Read the full article from S&P Global Market Intelligence
Chinese banks' regulatory capital requirement to drive debt issuance volume
Regulatory requirements and lower capital accumulation from profits will push Chinese banks to tap capital markets for funding needs.
—Read the full article from S&P Global Market Intelligence
?
Insurance
War and weather drove worst individual underwriting results at Lloyd's in 2022
Natural and man-made catastrophes took a heavy toll on the performance of some of Lloyd's managing agents, but others were able to report combined ratios well below 100%.
—Read the full article from S&P Global Market Intelligence
?
Fintech
Fintechs trim head counts as cost-saving efforts after turbulent 2022
A total of 11 select fintech companies in the industry announced massive layoffs since the beginning of 2023, with PayPal Holdings announcing the highest layoff in terms of head count among its peers.
—Read the full article from S&P Global Market Intelligence
Financials Research: Banks still plan to increase tech spend in 2023 – S&P survey
Roughly 65% of respondents expect a slight increase in tech spend between 1% and 9% and another 14% anticipate a significant increase of 10% or more.
—Read the full article from S&P Global Market Intelligence
?
?
Real Estate
Vulnerable housing and real estate markets
House prices experienced sharp increases in most developed economies during the last decade as record-low interest rates supported demand for property.
—Read the full article from S&P Global Market Intelligence
?
Private Equity
Sovereign wealth funds lead private equity co-investment activity
Challenges to both deals and fundraising are prompting general partners and limited partners to pursue more co-investment opportunities.
—Read the full article from S&P Global Market Intelligence
?
领英推荐
Credit and Markets
Weekly unemployment claims data offers flawed picture of US job market
A seemingly smaller share of eligible workers is receiving benefits, throwing into question the strength of the data as a gauge of relative labor market health.
—Read the full article from S&P Global Market Intelligence
?
Energy and Utilities
RRA Research: Battery stampede spurs sunny storage economics in ERCOT
Looking down the largest US battery energy storage pipeline, Electric Reliability Council of Texas is anticipated to offer robust storage economics, particularly in ERCOT West, thanks to a heavy renewables concentration.
—Read the full article from S&P Global Market Intelligence
Weekly Pricing Pulse: Commodity prices dip as oil demand weakens
The Material Price Index by S&P global Market Intelligence sits 31% below its year-ago level, which was near the all-time peak.
—Read the full article from S&P Global Market Intelligence
Diversified Energy touts gas well 'stewardship' as key to its emissions cuts
Diversified Energy buys old wells from producers, fixes the equipment and sells the remaining gas production for decades. The unorthodox business plan called for a different emissions reduction model, company executives said.
—Read the full article from S&P Global Market Intelligence
?
Technology, Media and Telecommunications
451 Research: Application containers still driving broader market growth, innovation
It has been a decade since 451 Research covered the emergence of the open-source Docker application container technology. In that time, it has become the basis of many modern software designs, including microservices, Kubernetes and serverless.
—Read the full article from S&P Global Market Intelligence
?
Metals and Mining
Nickel IPOs surging thanks to Indonesian mining boom
Strong electric vehicle battery demand has so far helped nickel producers raise $1.36 billion from IPOs in 2023, with two Indonesian deals representing the bulk of the total, according to S&P Global Market Intelligence data.
—Read the full article from S&P Global Market Intelligence
Metals and Mining Research: Glencore must enhance offer to win over key Teck shareholders
Teck rejected an unsolicited bid from Glencore amounting to approximately $23 billion, instead favoring a previous proposition of separating Teck into two distinct companies.
—Read the full article from S&P Global Market Intelligence
?
Supply Chain
Electronics sector reports greatest improvement in supply chains since 2001
Average supplier delivery times for inputs to electronics firms improved worldwide in March for the first time since June 2019.
—Read the full article from S&P Global Market Intelligence
?
The Week in M&A
Utility dealmaking abates as regulated, contracted asset sales hit snags
?
J.P. Morgan Securities top financial adviser on private equity deals in Q1 2023
?
Fifth Third among final bidders for First Republic – sources
?
The Big Number
Trending
—Listen to the S&P Global Market Intelligence’s Podcast and follow @EconomicsRisk on Twitter.
?
Additional Insights from S&P Global Market Intelligence
Increase your competitive edge with essential insights delivered straight to your inbox. We offer complimentary newsletters on a wide variety of topics to help you stay on top of what’s moving the markets, separating the immaterial from the invaluable. Review our newsletters and?sign up here.
IHS Markit is now part of S&P Global.
Compiled by Roma Arora.