Of Special Interest


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21st August 2020

S&P Global report says financial market infrastructure sector's earnings likely to cool off In second half

After a strong June and July, S&P Global Ratings expects earnings for the financial market infrastructure sector to soften in the second half but remain solid.

"We believe the sector will remain resilient, with strong cash flow generation for most players," said S&P Global Ratings credit analyst Giles Edwards in the report published tthis week-"Global FMI Sector Midyear 2020: Strong Cyclical Performance Is Set To Slow."

In the first half of 2020, a spike in trading activity and recovering asset prices led to a strong earnings performance for the sector. The COVID-19 pandemic spurred a bout of extraordinary volatility and record volumes amid the extraordinary market gyrations of March and April.

Disciplined financial risk appetite remains a generally supportive feature in the sector, but the completion of two large acquisitions will likely push sector leverage higher by year-end.

The ratingagency's negative outlook bias for the sector continues to reflect idiosyncratic downgrade risks.