Shipping Prices Return To Pre-Covid Levels

Author

Euan Marshall
January 12, 2023

Good Morning,

ANZ report highlights a mixed picture for commodities while shipping pressure eases in New Zealand, Sun Cable has entered administration, Sydney rents hit record highs in December, controversial Catholic cleric George Pell has died at 81, the UK Treasury is considering plans for a national cryptocurrency, Goldman Sachs is no longer predicting a recession in the eurozone in 2023, J Powell has said the Fed is not a climate policymaker, Apple will begin making in-house screens in 2024, Meta and Apple fall off Glassdoor's list of best places to work and the global economy is perilously close to falling into a recession.

Let's jump in.

Before The Bell

Markets

  • ANZ has released its Commodity Price Index for December, which ended the year a smidge lower - down 0.1%. In local currency terms, the index dropped 3.8%, as the NZ dollar appreciated 2.1% against the Trade Weighted Index. ANZ's report also stated global shipping prices had fallen sharply and were nearing pre-pandemic levels (NBR)

  • Uniqlo parent Fast Retailing Co Ltd on Wednesday said it would raise wages by as much as 40%, a clear sign that Japan's rock-bottom salaries may be starting to budge after decades of deflation and cost-cutting (RT)

  • Debt-heavy Asian companies are headed for a reckoning this year when $US314 billion of bonds come due, just as refinancing costs for lower-rated firms have risen to close historic highs (AFR)

  • Shares have advanced about 1% in Hong Kong, Japan and Australia after the S&P500 moved back above its key 3,900 mark, with sentiment in the region also supported by China's reopening from Covid curbs.

Earnings and Data

  • Data from the Australian Bureau of Statistics on Wednesday showed retail sales jumped 1.4% in November from October to a record of A$35.9 billion. This was more than twice the median forecast of 0.6%, and October's result was revised up sharply to a rise of 0.4% from an originally reported drop of 0.2% (RT)

  • Idaho-based grocery chain Albertson's Companies reported $0.87 in earnings per share for the quarter, coming in $0.20 above expectations. Meanwhile, 8.5% revenue growth from the prior year quarter to $18.15B came in $550M above the analyst consensus (Seeking Alpha)

  • Bed Bath & Beyond has posted wider quarterly losses than expected as its chief executive acknowledged the struggling retailer's turnaround plan had not achieved its goals. Bed Bath & Beyond lost $393 million during the fiscal third quarter, it said, worse even than the $385.8 million quarterly loss it projected just last week, and a 42% increase from year-ago losses (CNBC)

News Summary

  • An electric vehicle surge in NZ drove record new car registrations in 2022 (NBR)

  • New Zealand's inflation has hit 7.8% YOY, according to a Massey University forecast (Stuff)

  • Sun Cable, an Australian renewable energy company, has entered administration (9 News)

  • Sydney rents hit record highs in December (9 News)

  • Australia and Papa New Guinea are expected to sign a new defence treaty (9 News)

  • Controversial Catholic cleric George Pell has died at 81 (BBC)

  • The UK Treasury is considering plans for a national cryptocurrency (BBC)

  • Controversial influencer Andrew Tate loses bid to end his detention in Romania (BBC)

  • The battle for the Ukrainian city Soledar raged in sub-zero temperatures on Wednesday, with Russia's mercenary Wagner Group claiming to have taken control of the salt mining town (RT)

  • Goldman Sachs is no longer predicting a recession in the eurozone in 2023 (RT)

  • Joe Biden has said he was surprised to learn in November that classified documents were found at his former private office (BBC)

  • J Powell has said the Fed is not a climate policymaker (AX)

  • Brazil's judicial authorities have ordered the arrest of top public officials after rioters stormed key government buildings in Brasília (BBC)

  • Chinese state media defended their retaliatory measures against South Korea and Japan over their COVID-19 travel curbs as "reasonable", while Chinese tourists decried Seoul's "insulting" treatment on social media (RT)

  • A Chinese quant fund has donated $53m (USD) as Xi stresses philanthropy (BBG)

  • Wall Street braces for 'lacklustre' earnings season. Analysts are tipping the S&P500 will record its weakest quarter of earnings growth since 2020 as a contraction in margins weighs on corporate profits (AFR)

  • The global economy is perilously close to falling into a recession, according to the latest forecasts from the World Bank (BBC)

  • Wells Fargo secured a spot in the top 10 M&A advisors last year for the first time (BBG)

  • Apple will begin making in-house screens in 2024 to reduce its reliance on technology partners like Samsung & LG (BBG)

  • Meta and Apple have fallen off Glassdoor's list of best places to work (AFR)

Deal Flow

Investments / M&A

  • Pendal investors have withdrawn $5.3B (AUD) on the eve of Pendal's merger with fellow funds management business Perpetual (AFR)

  • Bankrupt crypto lender Voyager Digital received initial court approval for a proposed $1B (USD) sale of its assets to Binance US and said it would seek to expedite a U.S. national security review of the deal (RT)

  • Fujitsu, a Japanese IT firm, wants to divest its entire $1B (USD) stake in its air conditioning manufacturing unit Fujitsu General (BBG)

  • German vaccine producer BioNTech has agreed to acquire British artificial intelligence startup InstaDeep for up to £562m to speed up its biotech research and manufacturing capabilities (RT)

  • PE firm Carlyle has bought a majority stake in Indian beauty company and wellness solutions provider VLLC. In a deal worth ~$300m (USD) (RT)

  • Bain Capital, a US headquartered PE firm, is closing in on a deal to acquire a minority stake in EcoCeres, a biomass company which is majority owned by Hong Kong and China Gas. The deal is believed to be worth a few hundred million (BBG)

  • Saudi Arabia will establish a firm to invest in mining assets internationally as the kingdom seeks to diversify its economy from oil and secure access to strategic materials (BBG)

  • Endeavour group, an Australian retail company, has purchased Margaret River-based Cape Mentelle Winery from a subsidiary of French luxury goods conglomerate Louis Vuitton Moet Hennessy for an undisclosed price (AFR)

  • BP will sell Meta power from a solar farm under construction in Ohio (BBG)

VC & Fundraising

  • Goldman Sachs Asset Management has raised $1.6B (USD) for a fund registered under the EU's toughest ESG rules (BBG)

  • The US's largest public pension fund California Public Employees' Retirement System (CalPERS), will invest $500M (USD) each with PE firms TPG and GCM Grosvenor to help launch funds backing up-and-coming PE firms (PI)

  • A New Zealand-founded headphones company, Earshot, has its ear to the ground for fresh capital to expand into new markets. Founder James Bell-Booth wants to grow global sales and raise up to $2m (NZD) from institutional investors (NBR)

  • Aussie Angles, an Australian angle investing platform, has raised a $1.4m (AUD) seed round which includes funding from family office Euphemia and VC funds AirTree Ventures and Rampersand (AFR)

  • Ondo Finance, a decentralized investment platform founded by two ex-Goldman associates, launched a new fund for holders of stablecoins to invest in bonds and US Treasuries (BBG)

Equity Raises

  • Carbon trading infrastructure business Xpansiv has raised $181m (AUD) at a $2B (AUD) valuation. Investors include Goldman Sachs, Bank of America and Aware Super (AFR)

  • A Chinese firm QuantaSing Group Ltd, providing digital adult learning services, is set to be the first from the nation to list in the US this year, testing investor appetite after Beijing tightened oversight over its battered online education sector (BBG)

Daily Picks

  • Statistics New Zealand reveals employment growth amid a tight labour market and economic headwinds. Find out why here

  • NBR's Economics Panel analyses what we can expect from the New Zealand economy as 2023 progresses. Check it out here

Love our newsletter? Please share it with your friends, family, colleagues or anyone who needs to stay on top of the market via this link.

Also, if you have any feedback or questions, don't hesitate to hit us up via email or Instagram.

The Daily Deck is sponsored by Industrial Equity, LLC

Reply

or to participate.