US Inflation Surprise ๐Ÿ˜๐ŸŽ

November 12, 2022

Good Morning,

Kฤinga Ora is returning to the bank of Grant Robertson for almost $3B (NZD) in new loans, food price rises in New Zealand have hit a 14-year high, US Fund manager Vanguard has entered the Australian superfund market, a recession is looming in the UK, US CPI came in lower than expected at 7.7% YoY, the Bank of Mexico has raised rates by 75 basis points & China has slightly relaxed some of its Covid restrictions.

Let's jump in.

Before The Bell

Markets

  • It was a good day for the markets after lower-than-expected US CPI data came in.

  • The ASX was up 2.8% as interest rate-sensitive technology, real estate, and financial stocks soared. (AFR)

  • Japan's Nikkei 225 index increased 2.9%, Hong Kong's Hang Seng index jumped 5.7%, and South Korea's Kospi index lifted 3.1%. (AFR)

  • The US market had its biggest rebound since the depths of the pandemic.

    • The Nasdaq outperformed the Dow Jones by the widest margin since 2000.

  • The pan-European Stoxx 600 index was up 2.8%, with the tech sector up 7.6%.

  • The US dollar had its worst day since 2009. The Yen exceeded 140 per USD for the first time in three months. (BBG & BBG)

  • The crypto market is still reeling despite a slight rebound.

    • FTX signed an agreement with the blockchain network Tron to let users swap some assets to external wallets. (RT)

    • Sam Bankman-Fried has shut down the trading firm Alameda Research that he founded. (RT)

    • Blockfi has paused withdrawals over a lack of certainty around the FTX situation. (BBG)

Earnings

  • Ramsey Health Care reported activity and profitability had increased in all its regions over the September quarter. Its shares rose 4.7%. (AFR)

  • Six Flags missed its Q3 EPS and revenue estimates. Due to a relative lack of pricing power. As higher ticket charges hit attendance numbers. Their stock rose 13.4% yesterday. (BRN)

  • SoftBank's Vision Fund has reported a quarterly loss of $7.2B (USD) as startup valuations have plunged. Whilst Softbank Group is expecting a $100m (USD) loss on its stake in FTX. (BBG & BBG)

  • The Warehouse Group reported sales were up 21.1% YoY to $764.7m (NZD) in FY23 Q1 and said The Warehouse had record Q1 sales of $414.6m (NZD). However, the profit margin was down 0.6% to 32.3. Its share price was up 0.33%. (NZX)

  • WeWork posted a worse-than-expected Q3 loss. It missed on revenue and will close 40 US locations in a bid to turn profitable. Its stock rose 7% yesterday. (FT)

News Summary

  • Kฤinga Ora is returning to the bank of Grant Robertson for almost $3B (NZD) in new loans. (Stuff)

  • Kiwibank's term deposit rates hit 5% for the first time in seven years. (Stuff)

  • Food price rises in New Zealand have hit a 14-year high. (Stuff)

  • Strandbags has been fined $780k for misleading customers. (Herald)

  • The Three Waters reform will go through relatively unchanged despite the opposition it has received. (NBR)

  • My Food Bag has appointed Mark Winter as the permeant CEO. (NBR)

  • US Fund manager Vanguard has entered the Australian superfund market and is claiming to be the cheapest fund. (9 News)

  • Australian Federal Police believe the Medibank hackers are Russian cybercriminals. (9 News)

  • Three Australian telcos, Telstra, Optus and TPG, have been fined $33.5m (AUD) over speed claims. (9 News)

  • Sam Bankman-Fried has put FTX Australia into administration. (AFR)

  • A recession is looming in the UK as the economy has started to shrink. (BBC)

  • Former UK chancellor Kwasi Kwarteng has said he told former UK PM Liz Truss she was going too fast. (BBC)

  • Heathrow Airport has ruled out passenger limits for Christmas. (RT)

  • Ukraine says they have made major gains. (BBC)

  • US CPI came in lower than expected at 7.7% YoY, and core inflation came in at 6.3% YoY. Unemployment did increase to 3.7% from 3.5%, but there are still 1.9 job openings for every unemployed person. (RT)

  • Donald Trump has torn into rising republican rival DeSantis. (BBC)

  • US midterm results are yet to be confirmed, and there are tight races for both the senate and the house. (BBC)

  • A US senator has said it's time for crypto legislation in the US after the FTX collapse. (RT)

  • The Federal Trade Commission in the US has warned Elon Musk he is not above the law. (BBC)

  • The Bank of Mexico has raised rates by 75 basis points to a record 10%. (RT)

  • The Saudi Arabian energy minister has said OPEC+ will remain cautious about oil production. (BBG)

  • China has slightly relaxed some of its Covid restrictions. (BBC)

  • Hong Kong's economy has shrunk for the third straight quarter. (RT)

Deal Flow

Investments/ M&A

  • An international consortium made up of BlueFloat Energy, Energy Estate & Element Group has laid out plans for a $6B + (NZD) wind farm off the Waikato coast. (Stuff)

  • Albertsons Companies, a grocery chain, has had its $4B (USD) dividend kept on hold by a Washington court to stop it from paying it before they have closed its proposed deal with rival Kroger Co. (RT)

  • Seven & i Holdings has sold Sogo & Seibu, a department store chain, for a ~$1.8B (USD) enterprise value to PE firm Fortress Investments. (BBG)

  • Singapore Life Holdings and Prudential are among the insurance companies considering bids for the controlling stake in PT Bank Negara Indonesia's life insurance business. PT Astra International, a Jakarta-listed conglomerate, is also interested in bidding. A deal could value PT BNI's life insurance business at ~$1B (USD). (BBG)

  • Triple Flag Precious Metals, a royalty company, has agreed to buy fellow royalty company Maverix Metals for $606m (USD). (BBG)

  • Prosus, a global investment group, has given up its $403m (USD) stake in Russia's largest social media site VK. (BBG)

  • Commonwealth Bank of Australia is weighing the sale of its Indonesia unit. It could fetch several hundred million dollars. (BBG)

  • Ibex Holdings, an outsourcing firm, is facing takeover interest from PE firm CVC Capital Partners and others. Ibex has a market valuation of $366m (USD). (BBG)

  • Seven Group's Beach Energy, an Australian oil and gas company, has joined the bidding war for Perth basin energy play Warrego Energy. It has offered 20c a share, making the deal worth ~$250m (AUD). (AFR)

  • Berkshire Hathaway, an investment company, has sold $145m (USD) worth of shares in Chinese electric vehicle maker BYD. (RT)

  • Nine will remain the home of tennis in Australia after it signed a new 5-year deal with Tennis Australia to get access to the Australian open, Davis cup and Bille Jean cup and more. The deal will cost them ~$85m (AUD) per year. (9 News)

  • FTX.US is scrambling to sell assets. (BBG)

  • Television host Kelly Ripa and actor Mark Consuelos are buying a stake in Italian fifth-tier football club Campobasso 1919 and another smaller stake in Italian second-tier football club Ascoli FC via North Six Group. (BBG)

  • New Zealand King Salmon has won approval for its blue endeavour fish farm in the Cook Strait. (Herald)

VC & Fundraising

  • Brighton Park Capital, an investment firm that specialises in software, information systems, technology-enabled services and health care, has raised $1.8B (USD) for its new fund. (BBG)

  • Australian medical imaging company Vexev has raised $8.5m (AUD). Investors are Neotribe Ventures and Blackbird Ventures. (AFR)

  • Octana, a headless content management system, has secured a $1.5m (NZD) pre-seed round led by Auckland-based Hillfarrance Venture Capital. (NBR)

  • Teddy, a new online supermarket startup in New Zealand, has raised $1m (NZD) and would consider raising another $4m (NZD) next year. (Stuff)

Equity Raises

  • Saudi Arabia's Public Investment Fund is working with investment bank Lazard, on funding options that include a potential IPO for Masar, a $27B (USD) mega project in the holy city of Mecca. (RT)

  • Air taxi pioneer Volocopter has said it expects to remain independent until its first commercial flight in 2024 and then IPO the following year at what they hope is more than a $10B (USD) valuation. (BBG)

  • United Internet has picked banks for the IPO of its web hosting business Ionos Group. It has picked JPMorgan Chase & Co, Deutsche Bank, Berenberg and BNP Paribas as the joint global coordinators. Its seeking a market cap of $4.1B (USD). (BBG)

  • Saudi Arabia's sovereign wealth fund, the Public Investment Fund, is selling a 10% stake in the stock market, which could raise ~$669m (USD). (BBG)

  • CI Financial, an investment management firm, will split its US and Canada units. Its US unit is planning to IPO later this month. The new equity will help de-lever the business. (BBG)

Debt

  • Wall Street Banks who lent to Twitter have received bids as low as 60c on the dollar for the debt. (BBG)

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