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Expert lauds LME's efforts to set up lithium contract

Can ComScore Break Nielsen's Near-Monopoly On Ratings?

Most TV Everywhere Viewing Is Live TV In The Home

Consumer Insights Online Video User Overview

Public Companies Going Private


Expert lauds LME's efforts to set up lithium contract

A capital markets specialist based in emerging lithium superpower Argentina says the London Metal Exchange's efforts to establish a lithium contract, while fraught with peril, is definitely worth doing, and is also attracting significant interest in Australia which currently dominates global production.

The LME, which sets the global price for nickel, aluminum and copper, announced in late 2017 that it was considering launching new futures contracts covering one, some or all of the electric battery materials lithium, cobalt, nickel, graphite and manganese; though nickel, copper, cobalt and aluminum are already established on the LME.

On Sept. 4 S&P Global Platts reported LME product development head Oscar Wehtje as saying the exchange was looking at launching a nickel sulfate premium contract after cash-settled lithium and cobalt contracts are hopefully in place in 2019.

It is understood meetings have already been underway with existing index groups and Washington, D.C.-headquartered international financial consultancy DCDB Group's Buenos Aires-based Managing Partner Emily Hersh told S&P Global Market Intelligence that more would likely occur during LME Week in London during October.

While the opaque nature of such technology metals has long been a concern for investors and transparency is likely to be a major driver of the LME's current efforts, Hersh said the relatively small size of the lithium market is an equally important consideration, as is its highly concentrated nature with Albemarle Corp., Sociedad Quimica y Minera de Chile SA, Jiangxi Ganfeng Lithium Co. Ltd., and Tianqi Lithium Corp. comprising 80% of market supply in 2017.

As S&P Global Market Intelligence recently updated the market, the 2017 ramp-up of hard-rock operations at Wodgina, Mount Marion and Mt Cattlin helped ensure Australia was the largest producer with over half of global output, with Western Australia's Greenbushes mine the single-biggest producer that year.

In a Sept. 2 article published on LinkedIn which garnered significant attention among Australian metals analysts, Hersh spelled out seven key considerations the LME needed to get its head around to create a lithium contract.

It said that while the lithium market's annual value only passed US$1 billion in 2015 and tripled to around US$3 billion in 2017, "it still has quite a ways to go in order to reach a significant size when compared to other industries," while the physical volume did not triple from 2015 to 2017, and much of the recent growth in market value was driven by higher prices.

Yet she also said the physical volume of the lithium market is expected to quadruple from 2017 to 2025, driven by growth in the battery industry, which means that "regardless of the details, the market is going to have to change radically."

Challenges ahead

While Hersh's article also pointed out the lack of communication between mining and commodities people and those from a chemicals background which accounts for "a great deal of the oversupply confusion," she told S&P Global Market Intelligence that the LME's efforts to establish transparent pricing or better market access to foster understanding of how pricing works will help the lithium market grow.

Shaun Cartwright, managing director of boutique financial services group Viriathus Australia which is managing the IPOs of Argentina-focused lithium hopeful Centaur Resources and Canada-focused cobalt junior International Cobalt Resources Ltd, told S&P Global Market Intelligence that "now is the right time" to create a lithium contract.

"The demand for lithium isn’t going to decrease, as many bears would have you believe," he said. "The demand for lithium will increase as the demand for clean energy increases. Lithium will be needed in larger quantities as batteries for the home, electric vehicles, et cetera become more popular. The processing cost for lithium will decrease as new processing technologies improve."

Yet Hersh believes that while "taking a step towards finding a way to have a lithium contract is an effort that may fail, but it's an effort worth doing," she said in an interview.

"Trying something new is fraught with being the first, as you may not get it right the first time. That said, there are clear and avoidable challenges to this undertaking that the LME should be cognizant of from day one," she added.

Yet she believes bench marking lithium hydroxide prices off carbonate prices would be an error, though she has heard LME officials say they want to have separate contracts. Warehousing, however, creates a whole new level of complexity.

"Leaving aside the fact that lithium chemicals are not interchangeable, lithium carbonate is not interchangeable but it is more storable, whereas hydroxide is neither interchangeable nor storable," she said.

S&P Global Platts and S&P Global Market Intelligence are both owned by S&P Global Inc.


Technology, Media & Telecom
Can ComScore Break Nielsen's Near-Monopoly On Ratings?

Highlights

The following post comes from Kagan, a research group within S&P Global Market Intelligence.

To learn more about our TMT (Technology, Media & Telecommunications) products and/or research, please request a demo.

Sep. 17 2018 — Advertising agencies are becoming increasingly frustrated with the inability of Nielsen Holdings PLC's Nielsen Media Research to convince the major media companies to embrace its new cross-platform measurement system, called Total Audience Measurement. This creates a huge opportunity for comScore Inc., formerly Rentrak.

ComScore is trying to reinvent itself following its delisting in 2017 — it was relisted June 1 — following an accounting scandal. The company's stock has fallen from $65 per share intraday on Aug. 17, 2015, to close at just $18.06 per share on Sept. 6. It currently has a total enterprise value of less than $1.2 billion, paltry in comparison to Nielsen Holdings' $12.9 billion.

In April, comScore named Bryan Wiener, previously executive chairman of Dentsu's digital media agency 360i LLC, as its CEO. On Sept. 5, the company announced that it hired Sarah Hofstetter to serve as president and head up commercial strategy, including sales and marketing.

Wiener and Hofstetter have worked together for two decades, most recently at 360i, where Hofstetter was CEO and chairwoman. The two executives' deep ties to the advertising community may be just what is needed to bring a competing cross-platform measurement system to the broadcast and cable network industries.

Cable network ad revenue grew for decades before stumbling, albeit modestly, during the last recession. More recently, despite a booming economy the cable network ad industry has faltered, in part due to cord cutting and cord shaving but also because current ratings do not include all of online viewing and out-of-home viewing.

Currently, the ratings only include online viewing within a three-day period, which includes the exact same commercial load as linear. Many media companies do not believe that online viewers will tolerate the huge ad load that exists on linear TV and do not include the same commercial pods that appear on linear TV when serving up the shows online.

Although negotiations between Nielsen Media Research and the major media companies have been going on for some time, many in the industry are tired of the delays in adopting a new system and are looking at alternate ways to measure viewing.

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Technology, Media & Telecom
Most TV Everywhere Viewing Is Live TV In The Home

Highlights

The following post comes from Kagan, a research group within S&P Global Market Intelligence. To learn more about our TMT (Technology, Media & Telecommunications) products and/or research, please request a demo.

Summary: subscribers to telco operators were more likely to indicate they streamed TV Everywhere content compared to cable and DBS subscribers.

Sep. 17 2018 — Streaming live TV Everywhere to a mobile device inside the home is the TV Everywhere activity most often performed at 52% of multichannel TV respondents, according to data from Kagan’s MediaCensus online consumer survey.

While 58% of respondents surveyed in multichannel homes viewed TV Everywhere in the last three months, just 46% did so out of their home. Click here for the full Kagan report.

Viewing live TV inside the home was not only the TV Everywhere activity performed by the most respondents; it was also the most frequently performed.

Subscribers to telco operators were more likely to indicate they streamed TV Everywhere content compared to cable and DBS subscribers. Subscribers to some operators are more likely to stream TV Everywhere content, with AT&T U-verse (64%) being the highest and WOW! (42%) the lowest among operator subscribers surveyed.

Younger subscribers, especially Millennials, were more likely to stream TV Everywhere content compared to older subscribers.

For more information about the terms of access to the raw data underlying this survey, please contact support@snl.com.

Data presented in this article is from the MediaCensus survey conducted in February 2018. The online survey included 20,035 U.S. internet adults matched by age and gender to the U.S. Census, with additional respondents subscribing to the top multichannel video operators in the U.S. The survey results have a margin of error of +/-0.7 ppts at the 95% confidence level. Generational segments are as follows: Gen Z: 18-20, Millennials: 21-37, Gen X: 38-52, Boomers/Seniors: 53+.

Consumer Insights is a regular feature from Kagan, a group within S&P Global Market Intelligence's TMT offering, providing exclusive research and commentary.

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Technology, Media & Telecom
Consumer Insights Online Video User Overview

Highlights

49% of survey respondents use more than one SVOD service.

Sep. 14 2018 — Data from Kagan’s U.S. online consumer surveys shows that 23% of respondents exclusively use one service, while almost half (49%) use more than one SVOD service. The service which is most commonly used exclusively is Netflix, while users of smaller services almost always use at least one other service.

Netflix is so universally used that it is both the most exclusively used service and the service most often used in conjunction with another service. In terms of demographics, Netflix users are very similar to the general population compared to smaller services that tend to have a younger user base.

With the exception of Netflix, most respondents indicated they have never subscribed to the top four services, including Netflix, Hulu, Amazon Prime Video and HBO NOW. Among those who indicated they dropped one of the top services, price was a principal reason for dropping, although content-specific reasons differed by service. Content is one of the most defining characteristics of online streaming services, which can be seen in the content viewed and most enjoyed on each service. In large part users of Netflix, Hulu and Amazon Prime Video most enjoy the content each service is known for.

A broader overview of this data was presented in a recent webcast.

Data presented in this blog is from U.S. Consumer Insights surveys conducted in September 2017 and March 2018. The online survey included 2,526 (2017) and 2,523 (2018) U.S. internet adults matched by age and gender to the U.S. Census. The survey results have a margin of error of +/-1.9 ppts at the 95% confidence level.

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Capital Markets
Public Companies Going Private

Sep. 14 2018 — The recent tweet from Elon Musk has understandably made big news, but it is worth pointing out that the appetite for taking public companies private has been a key area of activity this year. S&P Global Market Intelligence’s data shows that 2018YTD is already at 39% of 2017 numbers, standing at €17.8bn of deal value across 32 completed deals, globally. Going-private closed deal count is at a healthy 49% compared to full 2017 numbers.

In terms of most popular sectors for going-private deals, since 2013 - Information Technology has been leading the pack with €108.9bn of aggregate deal value recorded across 104 deals, while Consumer Discretionary* is trending as a distant second with €49.7bn of total deal value.

The top target location for going private deals is the US, and interestingly – China comes in at second place, with UK following. The three regions have seen total deal size of €218.8 during the period of 2013 through 2018YTD. The popularity of these locations is further supported by the fact that after going private, average target’s EBITDA values have increased compared to when those companies were public. The US-based going private targets grew their EBITDA by average of 56% since leaving the public market, while Chinese and the UK-located companies grew EBITDA by 10% and 38%, respectively. Overall, the going private moves proved to be successful for ex-public companies globally within the 2013 – 2018YTD deals’ time frame, where their average Net Income values grew by 58% while EBITDA values grew by a smaller but yet attractive 29%.

In terms of the deal pipeline, 18 going-private deals were announced globally since 1st January 2018 and would add €25.8bn of aggregate deal value to already closed €17.8bn.

The following was originally published on Angel News on August 16, 2018: Public companies going private, S&P Global comment

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