trending Market Intelligence /marketintelligence/en/news-insights/trending/tk93sujlw0exg18gknib6a2 content
BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR
PRIVACY & COOKIE NOTICE
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *

* Required

In this list

Fortescue acquires BC Iron's 75% stake in Nullagine for A$1.00

Broadband Only Homes Skyrocket In 2018 Validating Top MSOs Connectivity Pivot

Street Talk Episode 40 - Digital Banks Take a Page Out of 'Mad Men'

Power Forecast Briefing: As retirements accelerate, can renewable energy fill the gap?

2019 Credit Risk Perspectives: Is The Credit Cycle Turning? A Fundamentals View


Fortescue acquires BC Iron's 75% stake in Nullagine for A$1.00

TOP NEWS

Fortescue acquires BC Iron's 75% stake in Nullagine for A$1.00

Fortescue Metals Group Ltd. has agreed to acquire BC Iron Ltd.'s 75% interest in the Nullagine iron ore joint venture in Western Australia for A$1.00, and will now evaluate the feasibility of restarting operations in the current market.

Adani's A$21B Carmichael coal mine given 'critical' status

In a bid to fast-track the remaining approvals for the project, the Queensland, Australia, government has declared Adani Enterprises Ltd.'s A$21 billion Carmichael coal mine to be "critical infrastructure," ABC reported, citing State Development Minister Anthony Lynham.

Mali shuts down Randgold offices, seizes bank accounts over US$80M in unpaid taxes

According to Mohamed Lamine Samake, an adviser to Mali's economy ministry, the government has closed offices of firms controlled by Randgold Resources Ltd. and seized their bank accounts, alleging that they owe about US$80 million in unpaid taxes. The closure does not affect the operations of Randgold's three mines in Mali.

DIVERSIFIED

* Vedanta Resources Plc's second-quarter production for fiscal year 2017 at its Zinc India operations fell annually across three commodities — refined zinc by 29% to 150,000 tonnes, refined lead by 24% to 31,000 tonnes and silver by 4% to 3.5 million ounces. International zinc production, meanwhile, was down 38% year over year to 39,000 tonnes after the closure of the Lisheen mine in Ireland, which was partially offset by a 37% increase in production to 23,000 tonnes at the Skorpion mine in Namibia.

BASE METALS

* The government of Bolivia's President Evo Morales was unable to improve operations at the Karachipampa metallurgical plant and the Huanuni mining company since it came to power ten years ago, due to structural problems, according to state miner Comibol adviser José Pimentel, Página Siete reported.

* A worker died Oct. 6 after falling into a conveyor belt in the grinding area at the Coronel copper mine, operated by Minera Frisco SAB de CV, said the Mexican Office of the Attorney General, Jornada reported.

* Australian Mines Ltd. is acquiring the Flemington scandium-cobalt project in New South Wales, Australia, from Jervois Mining Ltd. and the SCONI scandium-cobalt project in Queensland from Metallica Minerals Ltd.

* The Botswana government has applied to the high court to place BCL Mine Ltd., its largest copper and nickel producer, under provisional liquidation due to nonprofitability, as the state is unable to afford costs of about US$713 million required to keep operations running, according to Mineral Resources Minister Sadique Kebonang.

* Rio Tinto has organized a trip for analysts and investors to the Oyu Tolgoi mine in Mongolia scheduled for this month, as Jacques is facing increased pressure to justify the development of US$12 billion project, which shareholders fear could turn out to be a financial disaster, The Times reported.

* Kosovo's parliament voted to give the government control of a huge mining complex, Trepca, making it the guarantor of the company's debt, despite strong objections from Serbia, which claims it owns the business, Reuters reported. The Trepca lead-zinc-silver complex is operating at minimum capacity, with creditor claims standing at €1.4 billion.

PRECIOUS METALS

* Avocet Mining Plc entered into a conditional joint venture deal, in which a subsidiary of Managem SA will acquire up to a 70% stake in the company's Tri-K gold project in Guinea for a total investment of at least US$14.0 million. Should the ore reserve defined in the bankable feasibility study be less than 1 million ounces, Managem's ownership will be limited to 60%.

* PJSC Polyus Gold is planning to pay semiannual dividends equal to 30% of its EBITDA, provided that the ratio between net debt and adjusted EBITDA is lower than 2.5x.

* BWR Exploration Inc. executed a definitive acquisition agreement to fully acquire Puma Exploration Inc.'s Little Stull Lake gold project in northern Manitoba in Canada.

* Primary Gold Ltd. completed the formal acquisition of the Coolgardie gold project in Western Australia from MacPhersons Resources Ltd.

* Goldcorp Inc. started ramping up mining operations at the Penasquito gold-silver mine in Mexico after the removal of an illegal blockade that started Sept. 26. The protest, which forced Goldcorp to temporarily shutter the mine Oct. 3, dragged on for almost two weeks over issues including trucking, water quality and access, and the perceived unfulfilled company promises in the local communities.

* Aura Energy Ltd. Executive Chairman Peter Reeve believes the company's recently acquired gold deposit next to its Tiris uranium project in Mauritania could boost Aura's revenue while it finishes the feasibility study on the main mine, The Telegraph reported.

* The Ontario Superior Court of Justice granted its final order approving Nord Gold SE's all-share takeover of Northquest Ltd. after Northquest shareholders voted in favor of the arrangement at a special meeting Sept. 28. The deal is expected to close in the coming days.

* Ramelius Resources Ltd. posted record gold production of 36,179 ounces of gold from its operations in Western Australia in the September quarter, exceeding the guidance of between 31,000 ounces and 35,000 ounces of gold.

BULK COMMODITIES

* The troubled Welsh steel industry will get a windfall of nearly £20 million over the next five years as Wales cuts business rates, The Daily Mail reported.

* The International Finance Corp., the private lending arm of the World Bank, is looking to complete a US$2.7 billion debt refinancing for the Nacala Corridor railway project in Mozambique in the first quarter of 2017, Reuters reported, citing the International Finance Corp.'s principal investment officer for infrastructure and natural resources, Marcel Bruhwiler. The funding arrangement will help ease balance sheet pressure on Vale SA , which is developing infrastructure for the Moatize coal mine in the African country.

* Mozambique's government is in negotiations with Vale Moçambique SA to restart the transport of coal mined at Vale's Moatize operations through the Sena railway in the country, Macauhub reported, citing Carlos Mesquita, the minister of Transport and Communications.

* BHP Billiton Group expects to complete repairs on the tailings dam at its Samarco iron ore joint venture in Brazil by the end of the year. The mine is operated by Samarco Mineração SA, which is jointly owned by BHP Billiton and Vale.

* Anglo American Plc declared force majeure on fourth-quarter shipments of coking coal from the German Creek underground operation in Queensland, Australia, S&P Global Platts reported, citing Asian steel mill sources that received the notification. The force majeure, effective Oct. 3, will apply on the fourth-quarter loading periods for a few long-term customers.

* Early bidders for Anglo American's Dawson coal mine in Queensland, Australia, including Australian Pacific Coal Ltd. and Stanmore Coal Ltd., are set to visit the mine this week, The Australian Financial Review's Street Talk reported. The final bids will be submitted following the site visits, while the sale is expected to occur before Christmas.

* According to the company's latest accounts, Tata Steel Ltd.'s U.K. operations incurred a pretax loss of £599 million in the year to March 31, reflecting the deficit widening nearly two-fifths as compared to the previous financial year after adjusting for disposals, the Financial Times reported.

* The European Commission set provisional import duties of up to 73.7% on hot-rolled coil and heavy plate coming into the bloc from China, Bloomberg News reported. Meanwhile, the Chinese Commerce Ministry expressed concern and regret following the decision, calling the commission's probe methods "unfair and unreasonable," Reuters reported.

* Mexico has again extended a 15% tariff against imports of slab, hot-rolled coil, heavy plate, cold-rolled coil and wire rod from the countries with which it does not have free trade agreements, Metal Bulletin reported. The levy will be valid for a further six months starting Oct. 8.

* BMI Research shows that India is set to outstrip the U.S. as the world's second-largest coal producer after China, citing the country's global production share increasing to 12.7% by 2020 from 9.8% in 2016, Bloomberg News reported.

* Brazilian steelmaker Companhia Siderúrgica Nacional's Portuguese flat steel subsidiary, Lusosider, plans to increase the capacity of its continuous galvanizing line by 20,000 tonnes per annum to around 250,000 tonnes per year, Metal Bulletin reported. The capacity expansion follows a revamp of the horizontal furnace at its plant in southern Portugal.

* About 70 million tonnes of minerals have been extracted using illegal mining in Poland, which is equal to the country's annual coal production, Puls Biznesu reported. The value of illegally mined minerals is about 1 billion Polish zlotys, Chief National Geologist Mariusz Orion Jedrysek said.

* Thailand's Central Bankruptcy Court will mull a rehabilitation plan for domestic steelmaker Sahaviriya Steel Industries on Nov. 9, Metal Bulletin reported.

SPECIALTY

* An estimate for Global Geoscience Ltd. pegged the maiden mineral resource at the Rhyolite Ridge lithium-boron project in Nevada at 393 million tonnes at 0.9% lithium carbonate, 2.9% boric acid and 1.7% potassium sulfate.

* AREVA SA is in discussions with Kazakhstan over a possible investment in the French nuclear giant, Reuters reported, citing a spokeswoman for the French industry ministry. According to the report, a delegation from Kazakh miner National Atomic Co. Kazatomprom JSC met with French officials, and would probably focus on buying out AREVA's 51% stake in Katco, a joint venture with Kazatomprom.

* Rio Tinto is displaying in London the rarest pink, red and violet diamonds recovered from the Argyle mine at this time, as part of a global showcase. The 58.24-carat tender comprises 57 pink diamonds, two violet diamonds and four red diamonds. The bids for the diamonds are set to close Oct. 12.

* Agave Silver Corp. entered into an agreement to acquire a 100% interest in the Kootenay lithium project, which comprises three groups of mineral claims covering 4,050 hectares in British Columbia.

S&P Global Platts and SNL Metals & Mining are owned by S&P Global Inc.

The Daily Dose is updated as of 7 a.m. London time, and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription.


Technology, Media & Telecom
Broadband Only Homes Skyrocket In 2018 Validating Top MSOs Connectivity Pivot

Highlights

The segment stood at an estimated 23.6 million as of Dec. 31, 2018, accounting for 24% of all wireline high-speed data homes.

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.

Mar. 20 2019 — The U.S. broadband-only home segment logged its largest net adds on record in 2018, validating Comcast Corp.'s and Charter Communications Inc.'s moves to make broadband, or connectivity, the keystone of their cable communication businesses.

The size and momentum of the segment also put in perspective the recent high-profile online-video video announcements by the top two cable operators as well as AT&T Inc.'s WarnerMedia shake-up and plans to go toe-to-toe with Netflix in the subscription video-on-demand arena in the next 12 months.

We estimate that wireline broadband households not subscribing to traditional multichannel, or broadband-only homes, rose by nearly 4.3 million in 2018, topping the gains from the previous year by roughly 22%. Overall, the segment stood at an estimated 23.6 million as of Dec. 31, 2018, accounting for 24% of all wireline high-speed data homes.

For perspective, broadband-only homes stood at an estimated 11.3 million a mere four years ago, accounting for 13% of residential cable and telco broadband subscribers.

The once all-powerful, must-have live linear TV model, which individuals and families essentially treated as a utility upon moving into a new residence, increasingly is viewed as too expensive and unwieldy in the era of affordable, nimble internet-based video alternatives. This has resulted in a sizable drop in penetration of occupied households.

As a result, continued legacy cord cutting is baked in and broadband-only homes are expected to continue to rise at a fast clip, with the segment's momentum in the next few years compounded by Comcast's, Charter's and AT&T's ambitious moves into online-video territory.

Note: we revised historical broadband-only home estimates as part of our fourth-quarter 2018, following restatements of historical telco broadband subscriber figures and residential traditional multichannel subscriber adjustments.

Learn more about Market Intelligence
Request Demo

Q4'18 multichannel video losses propel full-year drop to edge of 4 million

Learn more

Q4'18 multiproduct analysis sheds more light on video's fall from grace

Learn more

Listen: Street Talk Episode 40 - Digital Banks Take a Page Out of 'Mad Men'

Mar. 20 2019 — Some fintech companies are making hay with digital platforms that tout their differences with banks, even though they are often offering virtually the same products. In the episode, we discuss with colleagues Rachel Stone and Kiah Haslett the deposit strategies employed by the likes of Chime, Aspiration and other incumbent players such as Ally Financial, Discover and Capital One. Those efforts conjure up memories of a Don Draper pitch in Mad Men and likely will enjoy continued success.

Learn more about Market Intelligence
Request Demo

No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P).


Watch: Power Forecast Briefing: As retirements accelerate, can renewable energy fill the gap?

Mar. 19 2019 — Steve Piper shares the outlook for U.S. power markets, discussing capacity retirements and whether continued development of wind and solar power plants may mitigate the generation shortfall.

Learn more about Market Intelligence
Request Demo

Credit Analysis
2019 Credit Risk Perspectives: Is The Credit Cycle Turning? A Fundamentals View

Mar. 15 2019 — On November 20, 2018, a joint event hosted by S&P Global Market Intelligence and S&P Global Ratings took place in London, focusing on credit risk and 2019 perspectives.

Pascal Hartwig, Credit Product Specialist, and I provided a review of the latest trends observed across non-financial corporate firms through the lens of S&P Global Market Intelligence’s statistical models.1 In particular, Pascal focused on the outputs produced by a statistical model that uses market information to estimate credit risk of public companies; if you want to know more, you can visit here.

I focused on an analysis of how different Brexit scenarios may impact the credit risk of European Union (EU) private companies that are included on S&P Capital IQ platform.

Before, this, I looked at the evolution of their credit risk profile from 2013 to 2017, as shown in Figure 1. Scores were generated via Credit Analytics’ PD Model Fundamentals Private, a statistical model that uses company financials and other socio-economic factors to estimate the PD of private companies globally. Credit scores are mapped to PD values, which are based on/derived from S&P Global Ratings Observed Default Rates.

Figure 1: EU private company scores generated by PD Model Fundamentals Private, between 2013 and 2017.

Source: S&P Global Market Intelligence.2 As of October 2018.

For any given year, the distribution of credit scores of EU private companies is concentrated below the ‘a’ level, due to the large number of small revenue and unrated firms on the S&P Capital IQ platform. An overall improvement of the risk profile is visible, with the score distribution moving leftwards between 2013 and 2017. A similar picture is visible when comparing companies by country or industry sector,3 confirming that there were no clear signs of a turning point in the credit cycle of private companies in any EU country or industry sector. However, this view is backward looking and does not take into account the potential effects of an imminent and major political and economic event in the (short) history of the EU: Brexit.

To this purpose, S&P Global Market Intelligence has developed a statistical model: the Credit Analytics Macro-scenario model enables users to study how potential future macroeconomic scenarios may affect the evolution of the credit risk profile of EU private companies. This model was developed by looking at the historical evolution of S&P Global Ratings’ rated companies under different macroeconomic conditions, and can be applied to smaller companies after the PD is mapped to a S&P Global Market Intelligence credit score.

“Soft Brexit” (Figure 2): This scenario is based on the baseline forecast made by economists at S&P Global Ratings and is characterized by a gentle slow-down of economic growth, a progressive monetary policy tightening, and low yet volatile stock-market growth.4

Figure 2: “Soft Brexit” macro scenario.5

Source: S&P Global Ratings Economists. As of October 2018.

Applying the Macro-scenario model, we analyze the evolution of the credit risk profile of EU companies over a three-year period from 2018 to 2020, by industry sector and by country:

  • Sector Analysis (Figure 3):
    • The median credit risk score within specific industry sectors (Aerospace & Defense, Pharmaceuticals, Telecoms, Utilities, and Real Estate) shows a good degree of resilience, rising by less than half a notch by 2020 and remaining comfortably below the ‘b+’ threshold.
    • The median credit score of the Retail and Consumer Products sectors, however, is severely impacted, breaching the high risk threshold (here defined at the ‘b-’ level).
    • The remaining industry sectors show various dynamics, but essentially remain within the intermediate risk band (here defined between the ‘b+’ and the ‘b-’ level).

Figure 3: “Soft Brexit” impact on the median credit risk level of EU private companies, by industry.

Source: S&P Global Market Intelligence. As of October 2018.

  • Country Analysis (Figure 4):
    • Although the median credit risk score may not change significantly in certain countries, the associated default rates need to be adjusted for the impact of the credit cycle.6 The “spider-web plot” shows the median PD values for private companies within EU countries, adjusted for the credit cycle. Here we include only countries with a minimum number of private companies within the Credit Analytics pre-scored database, to ensure a robust statistical analysis.
    • Countries are ordered by increasing level of median PD, moving clock-wise from Netherlands to Greece.
    • Under a soft Brexit scenario, the PD of UK private companies increases between 2018 and 2020, but still remains below the yellow threshold (corresponding to a ‘b+’ level).
    • Interestingly, Italian private companies suffer more than their Spanish peers, albeit starting from a slightly lower PD level in 2017.

Figure 4: “Soft Brexit” impact on the median credit risk level of EU private companies, by country.

Source: S&P Global Market Intelligence. As of October 2018.

“Hard Brexit” (Figure 5): This scenario is extracted from the 2018 Stress-Testing exercise of the European Banking Authority (EBA) and the Bank of England.7 Under this scenario, both the EU and UK may go into a recession similar to the 2008 global crisis. Arguably, this may seem a harsh scenario for the whole of the EU, but a recent report by the Bank of England warned that a disorderly Brexit may trigger a UK crisis worse than 2008.8

Figure 5: “Hard Brexit” macro scenario.9

Sources:”2018 EU-wide stress test – methodological note” (European Banking Authority, November 2017) and “Stress Testing the UK Banking system: 2018 guidance for participating banks and building societies“ (Bank of England, March 2018).

Also in this case, we apply the Macro-scenario model to analyze the evolution of the credit risk profile of EU companies over the same three-year period, by industry sector and by country:

  • Sector Analysis (Figure 6):
    • Despite all industry sectors being severely impacted, the Pharmaceuticals and Utilities sectors remain below the ‘b+’ level (yellow threshold).
    • Conversely, the Airlines and Energy sectors join Retail and Consumer Products in the “danger zone” above the ‘b-’ level (red threshold).
    • The remaining industry sectors will either move into or remain within the intermediate risk band (here defined between the ‘b+’ and the ‘b-’ level).

Figure 6: “Hard Brexit” impact on the median credit risk level of EU private companies, by industry.

Source: S&P Global Market Intelligence. As of October 2018.

Learn more about Credit Analysis
Click Here

  • Country Analysis (Figure 7):
    • Under a hard Brexit scenario, the PD of UK private companies increases between 2017 and 2020, entering the intermediate risk band and suffering even more than its Irish peers.
    • Notably, by 2020 the French private sector may suffer more than the Italian private sector, reaching the attention threshold (here shown as a red circle, and corresponding to a ‘b-’ level).
    • While it is hard to do an exact like-for-like comparison, it is worth noting that our conclusions are broadly aligned with the findings from the 48 banks participating in the 2018 stress-testing exercise, as recently published by the EBA:10 the major share of 2018-2020 new credit risk losses in the stressed scenario will concentrate among counterparties in the UK, Italy, France, Spain, and Germany (leaving aside the usual suspects, such as Greece, Portugal, etc.).

Figure 7: “Hard Brexit” impact on the median credit risk level of EU private companies, by country.

Source: S&P Global Market Intelligence. As of October 2018.

In conclusion: In Europe, the private companies’ credit risk landscape does not yet signal a distinct turning point, however Brexit may act as a pivot point and a catalyst for a credit cycle inversion, with an intensity that will be dependent on the Brexit type of landing (i.e., soft versus hard).

1 S&P Global Ratings does not contribute to or participate in the creation of credit scores generated by S&P Global Market Intelligence.
2 Lowercase nomenclature is used to differentiate S&P Global Market Intelligence credit scores from the credit ratings issued by S&P Global Ratings.
3 Not shown here.
4 Measured via Gross Domestic Product (GDP) Growth, Long-term / Short-term (L/S) European Central Bank Interest Rate Spread, and FTSE100 or STOXX50 stock market growth, respectively.
5 Macroeconomic forecast for 2018-2020 (end of year) by economists at S&P Global Ratings; the baseline case assumes the UK and the EU will reach a Brexit deal (e.g. a “soft Brexit”).
6 When the credit cycle deteriorates (improves), default rates are expected to increase (decrease).
7 Source: “2018 EU-wide stress test – methodological note” (EBA, November 2017) and “Stress Testing the UK Banking system: 2018 guidance for participating banks and building societies”. (Bank of England, March 2018).
8 Source: “EU withdrawal scenarios and monetary and financial stability – A response to the House of Commons Treasury Committee”. (Bank of England, November 2018).
9 As a hard Brexit scenario, we adopt the stressed scenario included in the 2018 stress testing exercise and defined by the EBA and the Bank of England.
10 See, for example, Figure 18 in “2018 EU-Wide Stress Test Result” (EBA November 2018), found at:https://eba.europa.eu/documents/10180/2419200/2018-EU-wide-stress-test-Results.pdf

Learn more about Market Intelligence
Request Demo

2019 Credit Risk Perspectives: Is The Credit Cycle Turning? A Market-Driven View

Learn More