Global Bonds enter Bear Market

September 03, 2022

Good Morning,

The global bond market entered its first bear market in a generation, Vector is facing legal action from the commerce commission, NZ beer consumption peaks above pre-pandemic levels, Australia has lifted their skilled migration cap, EY partners are likely to vote on splitting the firm by January, the USD index hit a 20 year high, Poland demands reparations, and there was a failed assassination attempt on the Argentina vice-president.

Let's jump in.

Before The Bell

Markets

  • The NZX was in the green on Friday, with A2 milking finishing up 18% for the week. (Stuff)

  • The Australian market fell to finish the week. It was the ASX's worst week since mid-June. (AFR)

  • The US market was mixed, with the S&P 500 breaking a four-day losing streak whilst the Nasdaq was down.

  • The global bond market entered its first bear market in a generation. (BBG)

Earnings

  • Nasdaq-listed Lululemon rose 9.76% after it reported earnings that beat the expectations of Wall Street as net sales were up 29%. They also announced increased expected earnings per share and revenue estimates. (CNBC)

News Summary

  • Progress has been made in talks between Purex manufacturer Essity and union representatives, with talks expected to continue on Monday and Tuesday. (Stuff)

  • Westpac lifts short-term mortgage rates but reduces 3, 4 & 5-year rates. (Stuff)

  • The New Zealand Government has announced its largest study on sustainable farming. It will cost $26.1m (NZD) and run over seven years. (Stuff)

  • Vector is facing legal action from the commerce commission as it is accused of not meeting minimum reliability requirements. (Stuff)

  • A New Zealand initiative promoting tourism as a career will receive $2m from the international visitor levy. (NBR)

  • NZ beer consumption peaks above pre-pandemic levels in the first half of the year, with 131.4m litres available for consumption. (NBR)

  • Australia has lifted their skilled migration cap to 195,000 from 160,000. (9 News)

  • Australia has announced a temporary policy that will allow pensions to work more hours without taking a pay cut in an attempt to help solve the current labour shortage. (9 News)

  • The Australian PM announced up to $575m (AUD) from the National Home Infrastructure Facility would be available for investment in affordable housing. (AFR)

  • EY partners are likely to vote on splitting the firm by January. (AFR)

  • The USD index hit a 20-year high. (RT)

  • Tencent targets a ~$14.5B (USD) divestment. (BBG)

  • Amazon launches seller storage service to tackle supply chain woes. (RT)

  • Starbucks new CEO is Laxman Narasimhan. (CNBC)

  • Poland estimates its WW2 losses are $1.32 trillion (USD) and demands German reparations. (RT)

  • EU's von der Lynn backs price cap on Russian pipeline gas. (RT)

  • There was a failed assassination attempt on the Argentina vice president. (BBC)

Deal Flow

Investments/ M&A

  • Zendesk has rejected Light Street Capital Management's proposal as it was not superior to the $10.2B (USD) go-private deal it had received from Hellman & Friedman and Permira. (RT)

  • Exon and Shell have sold their joint-venture California oil assets for $4b (USD) to German asset manager Ixon. (RT)

  • AMP has lost its $2.7B (AUD) property fund, which will reduce its expected earnings by up to $50m (AUD), potentially reducing its sale price ahead of its sale to Dexus. (AFR)

  • I Squared Capital is exploring the sale of its Latin American power producer Inka Energy. It could fetch a price of over $2B (USD). (BBG)

  • Hollysys, a US-listed automation and control system maker, is to be taken private in a $1.8B (USD) deal led by its management. (RT)

  • Nikon announced a tender offer for Germany's SLM Solution Group of $555.6m (USD). (RT)

  • Thiess extended its $367m (AUD) takeover offer for MACA for another 2 weeks. (AFR)

  • Berkshire Hathaway has reduced its stake by 1.72m shares in Hong Kong-listed electric vehicle maker BYD. The stake was worth $57m (USD). (RT)

  • Ziwi, a pet food company, has acquired Freeze Dried Foods New Zealand and its subsidiary Kiwigarden. (NBR)

  • Horizon Flowers New Zealand has acquired 115 hectares of farmland, increasing Tulip exports by 25m bulbs a year. (Stuff)

VC & Fundraising

  • Boopos, a Miami-based lending platform for business acquisitions and growth, has raised $58m (USD) in Series A funding. (TC)

  • Alloy, a leading Identity Decisioning Platform for banks and fintech companies, has raised an additional $52m (USD) at a $1.55B (USD) valuation. (PRN)

Equity Raises

  • Benz Mining Corp, a Quebec gold and critical minerals explorer, is raising $7m (AUD) at a 12.7% discount to the last close. (AFR)

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