Goldman Sacks 2.0

January 10, 2023

Good Morning,

New Zealand's egg shortage will continue for months, Australian home values have hit record lows, Fortescue Metals Group's CFO, Ian Wells, will depart in 22 days, England is banning single-use plastic cutlery and plates, Brazilian president Luiz Ináico Lula da Silva has vowed to punish supporters of ex-president Jair Bolsonaro after they stormed Congress, Pakistan is seeking $8B (USD) to rebuild after devastating floods & Goldman Sachs will sack 3,200 people this week.

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Now let's jump in.

Before The Bell

Markets

  • The NZX 50 continued its green start to the year, climbing up marginally. The turnover was very light at $63.1m (NZD) (GR)

  • The ASX 200 rose on the back of a positive day for the lithium sector (AFR)

  • The NZ and Australian 10Y bond rates fell, copying the decrease in the US 10Y on Friday

Earnings and Data

Earnings and data from Monday: 

  • Volpara Health Technologies, a breast cancer diagnostics company listed on the ASX, announced it has signed five-year contracts with five new healthcare providers in the US for a combined value of $12.3m (NZD) as well as a five-year renewal with an existing customer for a further $1.4m (NZD) (NBR)

  • The latest building approvals data out of Australia has shown the total number of building approvals fell 9% in November (ABS)

  • Eurozone unemployment dropped to a record low in November, with 10.8 million unemployed people. The unemployment rate remained unchanged from October at 6.5% (FT)

Earnings and data coming up this week:

  • Tuesday: Consumer credit (US), industrial production (France), Jefferies Financial Group, Commercial Metals Company 

  • Wednesday: Inflation & retail sales (AU), J Powell speaks, Albertsons Companies, Bed Bath and Beyond  

  • Thursday: Trade balances (AU), building consents (NZ), CPI & PPI (China), Infosys

  • Friday: CPI, unemployment claims & federal budget balance (US), trade balance (China), GDP (UK), Taiwan Semiconductor Manufacturing Company

  • Saturday: JP Morgan Chase, Bank of America, Wells Fargo, BlackRock, Citi, Delta Airlines

News Summary

  • Cyclone Hale is set to hit Northland and Auckland today (Stuff)

  • New Zealand's egg shortage will continue for months as 300,000 more laying hens are needed (Stuff)

  • In NSW, the Labour Party has vowed to abolish stamp duty for almost all first-home buyers if they are elected in May (9 News)

  • Australian home values have hit record lows (9 News)

  • There are concerns about prolonged flooding in WA (9 News)

  • Fortescue Metals Group's CFO, Ian Wells, will depart in 22 days (AFR)

  • England is banning single-use plastic cutlery and plates (BBC)

  • US farmers have won the right to repair John Deere equipment (BBC)

  • Brazilian president Luiz Ináico Lula da Silva has vowed to punish supporters of ex-president Jair Bolsonaro after they stormed Congress (BBC)

  • More than 88 million people in Henan, China, are infected with Covid-19 (BBC)

  • Thousands of people are in despair after India Adani plants shut (BBC)

  • Pakistan is seeking $8B (USD) to rebuild after devastating floods (BBG)

  • Goldman Sachs will sack 3,200 people this week (BBG)

  • Apple iPhone exports from India have doubled to pass $2.5B (USD) (BBG)

Deal Flow

Investments / M&A

  • EY is setting aside $2.5B (USD) to fund an acquisition spree for its consulting arm following its planned split from the audit business (AFR)

  • Vodafone Group, a telecommunications company, has entered into a binding agreement to sell its Hungary unit to 4iG and Corvinus. Vodafone will receive a total cash consideration of about €1.7B (BBG)

  • Life sciences firm Qiagen has acquired DNA-biometrics firm Verogen in a $150m cash deal (RT)

  • Vital Healthcare Properties Trust, a healthcare-specific property owner listed on the NZX, has canned plans for a $106m (NZD) hospital development in Tasmania in favour of a new $140m (AUD) research building on the Gold Coast. It is also preparing to sell-down $200m (NZD) of non-core assets (NBR)

  • IGO Group and Chinese company Tianqi the majority owners of Greenbushes lithium mine, have agreed to pay $136m (AUD) to acquire lithium explorer Essential Metals (AFR)

  • Car giant Stellantis has put $30m (USD) into ASX-listed battery materials manufacturer Element 25 and signed an offtake agreement for up to 10,000 tons of battery-grade manganese sulphate monohydrate for five years (AFR)

  • AstraZeneca, a global pharmaceutical company, has agreed to buy US clinical-stage biopharmaceutical company CinCor Pharma for $26 (USD) a share, a 206% premium. Shareholders will also receive an additional $10 (USD) per share if the company achieves regulatory submission for the blood pressure drug baxdrostat (BBG)

  • Berkshire Hathaway, the investment company owned by Warren Buffett, has sold 1.1m shares of Hong Kong-listed electrical vehicle maker BYD at an average price of $24.52 (USD) per share (RT)

  • Nitro suitor Alludo is battling rival Potentia at the Takeovers panel (AFR) 

  • K2 Asset Management, a funds management and responsible entity services business listed on the ASX, is set to bring in GAM Investments, an investment giant, as the manager of its select international absolute return fund (AFR) 

  • Credit Suisse is nearing a deal to buy the incoming head of First Boston, Michael Klein's advisory business. The deal is believed to be worth a few hundred million (USD) (BBG)

VC & Fundraising

  • Australian adventure tech startup Loose Cannon Systems which is backed by the iPhone manufacturing giant Foxconn has closed a $12m (AUD) Series A funding round (AFR)

Equity Raises

  • WeDoctor, a Tencent-backed Chinese startup that is aiming to transform China's healthcare system with advanced technology, plans to file for an IPO by the end of April in either the US or Hong Kong and is aiming to float in the second half of 2023 (BBG)

Daily Picks

  • If you work in banking, check out this list Bloomberg has compiled on where banks stand with plans for job cuts to see if you are at risk. Check it out here

  • McKinsey has published their global survey results on the state of AI. It examines the tech's adoption and investment over the last five years, plus tips on implementation. Check it out here

  • Finally, the AFR published an article on the year ahead in M&A in Australia that complies the views of multiple banks. Check it out here

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