World Cup Shocks ⚽️🏆🤯

December 12, 2022

Good Morning,

The US dollar slumped, China makes Covid u-turns, National win Hamilton seat, the football World Cup has many shocks, UK banking rules are set for a big change and Microsoft's deal is looking less likely.

Before The Bell

Markets

  • It was a red week for the stock markets. As attention turned to key rates decisions occurring this week.

Earnings and Data

  • Earnings coming up for the week

    • Monday: UK monthly GDP growth

    • Tuesday: Aussie NAB business survey, US Nov CPI, Oracle

    • Wednesday: UK Nov CPI, US FOMC decision

    • Thursday: Aussie employment data, NZ 3Q GD, Sunrice Earnings BoE and ECB policy decision

    • Friday: EU Nov CPI & Adobe

    • Weekend: Accenture

  • Last weeks earnings

    • Air New Zealand expects to see a big bump to its six-month profits as Kiwis start to fly again, with a fall in jet fuel prices cutting one of its major costs. First-half profit before tax and other significant items are expected to be in a range of $295 million to $325m, the airline said on Thursday. (Stuff)

    • The Australian economy grew 0.6% in the September quarter down from 0.9% in the previous quarter. (AFR)

    • Aspermont Limited, a media services provider to the global resource industry reported earnings results for the full year ended September 30, 2022. For the full year, the company reported sales was AUD 18.73 million compared to AUD 16.05 million a year ago. Net loss was AUD 0.429 million compared to net income of AUD 0.115 million a year ago. (Market Screener)

    • Shares of retailer Costco slumped 1% after the company reported revenue that fell short of Wall Street’s expectations. The company reported $54.44 billion in revenue. (CNBC)

    • Fonterra’s first-quarter profit jumped 84% as it benefits from strong margins in its protein and cheese products. The country’s largest dairy processor said normalised after-tax profit increased to $214 million in the three months to October 31, from $116m last year. Sales rose 32% to $5.79 billion. (Stuff)

    • Gitlab reported third quarter EPS of $-0.10, $0.05 better than the analyst estimate of $-0.15. Revenue for the quarter came in at $113M versus the consensus estimate of $106.04M. (Invest)

    • For the third quarter, LululemonAthletica inc. beat expectations, reporting earnings of $2.00 per share and $1.86 billion in revenue. (CNBC)

    • Metcash chief executive Doug Jones says the second half of fiscal 2023 has started well, with group sales up 6.2 per cent. (AFR)

    • Microsoft NZ increased its net profit by 250% to $40 million NZD (Herald)

    • Science Applications International Coporation reported adjusted earnings of $1.90 per share, surpassing the Zacks Consensus Estimate of $1.74. The bottom line increased 3% from the year-ago quarter’s earnings of $1.85 per share. (SWS)

News Summary

Monday

  • The White House condemned former President Donald Trump after he called for the "termination" of the US constitution. (RT)

  • The US dollar has erased more than half of this year’s gains amid growing expectations the Federal Reserve will temper its aggressive rate hikes. (BBG)

Tuesday

  • People in China's capital Beijing were allowed to enter parks, supermarkets, offices and airports without showing proof of a negative COVID-19 test on Tuesday, the latest in a mix of easing steps nationwide after last month's historic protests. (RT)

  • The NZD has been getting glowing reviews in the international press as the "top performing major currency" over the past few days. (NH)

Wednesday

  • In a turnaround, China eases its Covid quarantine and lockdown policy to allow people to isolate at home. (BBC)

  • Neil Warnock has beaten his Republican rival in the Georgia senate run-off race to give the Democrats a 51-49 advantage in the upper chamber. (BBC)

  • Chip maker TSMC invests $40 billion USD in Arizona plants in one of the largest foreign investments in US history. (BBC)

  • The Government has provided a loan worth $6 million NZD which will allow Ruapehu Alpine Lifts to continue operating in 2023. (Herald)

Thursday

  • Subcontractors will get their full $2.89 million in retention payments from liquidated Wellington company Armstrong Downes Commercial, and a further $500,000 will be paid to unsecured creditors by Christmas. (Stuff)

  • New Zealand’s richest man, billionaire Graeme Hart, was behind the biggest single donation to Auckland mayor Wayne Brown’s winning $470,000 election campaign. (Stuff)

  • Russia freed WNBA star Brittney Griner on Thursday (local time) in a dramatic high-level prisoner exchange, with the US releasing notorious Russian arms dealer Viktor Bout, American officials said. (Stuff)

  • Higher debt servicing costs will add $80 a week to the “average” household budget by the end of next year, ASB economists say, and an extra $100 by the end of 2024. (Stuff)

  • Mining giant Glencore has partly blamed the Palaszczuk government’s new controversial royalties scheme for its decision to abandon its plans to build a $2 billion thermal coal mine in Central Queensland. (AFR)

  • Papua New Guinea’s upcoming $30 billion plunge into LNG expansion will not come at the expense of the vast renewable energy and hydrogen opportunities in the country, says Petroleum Minister Kerenga Kua. (AFR)

Friday

  • Prime Minister Jacinda Ardern has made a last-minute visit to the byelection battleground of Hamilton West in a final effort to rally Labour supporters on the last day of campaigning. (Herald)

  • Australian Prime Minister Anthony Albanese has announced a four-point plan to combat increasing energy prices, including a $1.5 billion package to provide energy bill relief. (9 News)

  • Rishi Sunak is set to announce a collaboration between the UK, Italy and Japan to develop a new fighter jet that uses artificial intelligence. (BBC)

  • Gas Prices Fall Below Last Year’s Average. The U.S. average for regular unleaded gasoline has declined to $3.29 (USD) a gallon, below its average of $3.36 (USD) last year. (WSJ)

Weekend

  • National's Tama Potaka has recorded a resounding victory in the Hamilton West by-election. (Stuff)

  • More than 13,000 Telstra customers have had their details published online due to an internal error. (9 News)

  • US sports journalist Grant Wahl has died whilst covering the World Cup in Qatar. (BBC)

  • European Parliament Vice President Eva Kaili has been arrested over allegedly bribery. (BBC)

  • The World Cup semifinals will be Argentina vs Croatia and France vs Morocco after England, Brazil, Portugal and the Netherlands were knocked out. (BBC)

  • Sam Bankman-Fried has said he hopes to start a new business to make enough money to pay back the victims of the FTX collapse. (BBC)

  • Trump's US steel tariffs broke international trade rules according to the WTO. (BBC)

  • UK banking rules are set for their biggest shake-up in more than 30 years. (BBC)

  • Penguin Random House boss Markus Dohle has resigned after the Simon & Schuster deal failed. (BBC)

  • The US are seeking to block Microsoft's $69B (USD) acquisition of Activision Blizzard. (BBC)

Deal Flow

Investments/ M&A

  • After record profit's, oil and gas corporation Exxon will now repurchase $US50 billion ($74 billion) of stock through 2024, expanding its previous plan of $US30 billion through 2023, the Irving, Texas-based company said in a statement. (AFR)

  • Assicurazioni Generali SpA is planning to sell a roughly €20 billion ($21 billion) Italian life insurance portfolio as part of a plan to improve profitability, people familiar with the matter said. (BBG)

  • Andrew Forrest's Squadron Energy to pay over $4 billion USD for CWP Renewables. (AFR)

  • NRG Energy Inc. agreed to buy Vivint Smart Home Inc. for $2.8 billion to accelerate the US power producer’s strategy of diversifying from its core electricity-generation business by focusing on retail consumers. (BBG)

  • MNG Airlines, a logistics and transport company, is going public through a merger with a blank-check company led by European dealmakers Makram Azar and Scott Freidheim. The deal with Golden Falcon Acquisition Corp. has an expected enterprise value of $676 million, according to a statement Wednesday. (BBG)

  • Credit Suisse Rises as Saudi Crown Prince Weighs Investment Mohammed bin Salman is considering $500 million injection Crown Prince considers investment in investment bank spinoff. (BBG)

  • Italian contractor Webuild has pulled out of a $350 million AUD proposed acquisition of engineering group Clough, forcing the Perth-based contractor, which is building Snowy 2.0, into administration. (AFR)

  • K3 Capital (K3C.L) said on Thursday it was in advanced talks to sell itself to U.S. private-equity firm Sun Capital Partners Group in a deal valuing the British professional services firm at 257.3 million pounds ($314 million USD). (RT)

  • QIC’s infrastructure team is understood to be in the final stages of signing a $140 million odd deal to buy Healius’s day hospitals that were put on the auction block via Gresham Partners. (AFR)

  • Property developer funds appeal against salmon farm consent The McGuiness Institute, backed by Willis Bond, seeks review of NZ King Salmon project, which had $60 million NZ raised for. (NBR)

  • On Friday, Camplify (an Airbnb-style website that connects recreational vehicle (RV) owners to budget-conscious holidaymakers) followed the Airbnb playbook of global expansion by completing the $47.6 million acquisition of German RV hire business, PaulCamper, to add to global operations in the United Kingdom, Spain and New Zealand. (AFR)

  • Covid-19 test maker Ellume has been snapped up by rival Hough for $38 million USD. (AFR)

  • The Ministry for Primary Industries has committed $6.7 million NZD to a land-based salmon farm project being billed as a New Zealand-first. (NBR)

  • Buyout firm Potentia Capital has hit back in the battle for ASX-listed Nitro Software, increasing its offer to $2 a share and saying it could go higher following a look at the company’s books. (AFR)

  • Auckland Mayor Wayne Brown raised the prospect of an Auckland Airport stake sale via the divestment of Auckland Council’s 18% stake. It would save money on debt servicing and reduce rates bills. (NBR)

  • John Textor is inching closer to a takeover of French football team Olympique Lyonnais in what will be his biggest acquisition in the sport. (BBG)

  • Deutsche Bank AG’s asset management arm DWS Group is considering a sale of its private equity secondary business as part of a plan to pull back from areas where it doesn’t have sufficient scale. (BBG)

  • Copper miner Sandfire Resources is in the market for a buyer for their De Grussa mine, Azure Capital has been hired to help find a buyer. (AFR)

  • Fashion brand Vince is exploring options which include selling the company. (BBG)

  • French shipping container company CMA CGM has agreed to buy two major shipping terminals in New York and New Jersey from Global Container Terminals. (BBG)

VC & Fundraising

  • Thoma Bravo LLC raised $32.4 billion for three new tech-focused funds in one of the biggest hauls by a private-equity firm this year even as some rivals struggle to close out funding rounds. (BBG)

  • Gas producer and explorer Denison Gas are stepping up its pursuit of a home on the ASX boards, chasing investors that can fund it through to its slated initial public offering next year. It is understood Denison Gas has kicked off a $40 million pre-IPO raising, targeting institutional investors and family office types that could tip in the capital now and anchor its register at the time of its float. (AFR)

  • Christchurch-based space transportation company Dawn Aerospace secures $20 million NZD in a Series A round. (NBR)

  • Creative NZ has awarded a $5.3 million contract to develop a digital arts agency to We Are Indigo, a small business advisory group at the centre of a government funding row. (NBR)

Equity Raises

  • Xiamen International Bank is considering a $1.3B (USD) HK IPO. (BBG)

  • Saudi Refiner Luberef set to price $1.3B IPO at top end (BBG)

  • Russia's Whoosh eyes $400 million USD valuation in upcoming IPO. (RT)

  • Listed sales software company Bigtincan has been tapping up fund managers for a $30 million AUD institutional raise. (AFR)

  • Onomotion raises €21 million to expand e-cargo bike urban logistics business. The Berlin-based Onomotion has come up with a scalable way to do micromobility-powered urban logistics — cargo e-bikes with built-in cover from the elements and attachable containers. (TC)

  • Evolution Capital and Roth Capital in the US were seeking buyers for shares in lithium group Xantippe Resources, which went into a trading halt while the raising played out. Xantippe was seeking to raise $20 million at 0.6¢ a share, split into a $12 million placement and $8 million share purchase plan. Investors said the stock was offered with a free attached option, on a one-for-two basis. It was expected to be mostly sold in the US. Xantippe owns the Carachi Lithium Brine Project in Argentina, nearby sites owned by ASX-listed Lake Resources and Allkem (formerly Galaxy Resources). (AFR)

  • Chinese athletic apparel producer Anta Sports is considering listing Wilson tennis racquet maker Amer. (BBG)

Debt

  • Most creditors of Hong Kong Airlines Ltd. voted to support the carrier’s proposed HK$49 billion ($6.3 billion) debt restructuring, a step to stave off insolvency after travel to and from the city dried up the past three years. (BBG)

  • Apollo Global Management and Franklin Templeton are among buyers Citrix System's $750 million USD leveraged buy-out debt. (BBG)

  • Coal miner Yancoal Australia Ltd (YAL.AX) said on Friday it intended to prepay $459 million of its debt on or around Dec. 16, as elevated coal prices were supporting strong cash inflows. (RT)

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