RBA Lifts Interest Rates 📈

March 13, 2023

Good Morning,

The Reserve Bank has heaped more pain on borrowers, extending its record run of interest rate rises to a 10th consecutive increase, the number of people recorded as uncontactable following Cyclone Gabrielle is now officially at zero, transport Michael Wood has announced $78 million in new funding to upgrade Christchurch bus services, Rocket Lab has US$38 million in Silicon Valley Bank which collapsed on Friday.

Before The Bell

Markets

  • Hopes of a systemic slowdown in the rate of inflation went unfulfilled throughout February, meaning capital markets are again "pivoting" to expect a longer economic down cycle (NBR)

  • China, the world's second biggest oil consumer is snapping up crude after reversing its Covid-19 policies. Against a backdrop of tight supply, the demand boost has everyone from Goldman Sachs Group Inc. to trading powerhouse Vitol Group predicting a rally to $100 USD per barrel later this year (BBG)

Earnings

  • Apple's biggest supplier Foxconn says its revenue last month fell by 11.65% compared to the same period in 2022 due to weaker demand for electronics (BBC)

  • AerSale Corporation came out with quarterly earnings of $0.23 per share, beating the Zacks Consensus Estimate of $0.18 per share. This compares to earnings of $0.31 per share a year ago (ND)

  • Cargojet, a Canadian air transportation services company, reported its Q4-2022 earnings results. The stock finished 10.8% lower, revenue reached C$267 million compared to the consensus estimate of about C$260.6 million, representing a 13.2% growth rate. (TR)

  • South Port, Bluff-based port company has reported a net profit of $5.2 million for the six months ended December, compared with $5.9m a year ago. Revenue for the period rose 7% to $24m, while operating costs grew at a faster rate of 14% to $16.4m on the back of higher finance and administrative expenses (NBR)

  • NBR Lister Graeme Hart’s 78%-owned packaging company Pactiv Evergreen has announced the closure of two US manufacturing plants, with the loss of 1300 jobs. The restructuring was disclosed alongside Pactiv’s annual results, featuring net profit of US$318 million from revenue of US$6.2 billion (NBR)

  • ASX-listed software-as-a-service company Xero is looking to cut up to 800 jobs globally in a bid to “streamline its operations”. The company is also exiting from Waddle, a cloud-based lending platform it acquired in 2020, for which it expected to incur a write-down of $30 million to $40m (NBR)

  • General Motors Co (GM.N) on Thursday said it was offering buyouts for most of its salaried employees and expects to take a pre-tax charge of up to $1.5 billion to cover the costs (RT)

  • Allbirds admits missteps, unveils new strategy after brutal holiday quarter (CNBC)

News Summary

Monday

  • The Central Bank of Australia is set to raise interest rates for a 10th straight meeting on Tuesday, with policy makers facing a complex messaging task for an outlook of slower economic growth and still-elevated inflation (BBG)

  • Starbucks Corp. is investing $36 million USD to open and renovate coffee shops in the UK, pushing on with expansion in a market where profit has dropped due to soaring costs of coffee beans and labour (BBG)

  • Harris Associates, one of Credit Suisse's major shareholders, has sold its entire stake in the Swiss bank (RT)

Tuesday

  • The world’s largest social networking company, Meta is eliminating more jobs, on top of a 13% reduction in November, in a bid to become a more efficient organization (BBG)

  • The number of people recorded as uncontactable following Cyclone Gabrielle is now officially at zero, with police saying all those previously listed are now accounted for (Suff)

  • The Reserve Bank of Australia has heaped more pain on borrowers, extending its record run of interest rate rises to a 10th consecutive increase in its bid to drive down inflation. It signaled, though, that the peak may not be far off (Guardian)

Thursday

  • The National Party is further positioning itself as the cost of living party, challenging the Labour Government to set up a Parliamentary inquiry into retail banking regulation and competition (Stuff)

  • Sky Television and TVNZ have failed to reach an agreement that would let users of Sky’s new SkyPod media player access TVNZ’s channels through its TV guide (Stuff)

  • Sheikh Tahnoon bin Zayed Al Nahyan will become chairman of Abu Dhabi’s $790 billion sovereign wealth fund, consolidating his power beyond roles that include the United Arab Emirates’ national security adviser and head of the country’s largest bank (BBG)

  • Uber Technologies Inc. is exploring whether to spin off its Uber Freight logistics arm in a sale or as a separate publicly traded company to streamline its focus on ride hailing and food delivery, according to people familiar with the matter (BBG)

Friday

  • Transport Michael Wood has announced $78 million in new funding to upgrade Christchurch bus services as officials consult on a future light rail or busway system for the city (1 News)

  • The Health Minister has ordered an advertisement she features in to be taken down, following questioning from National (1 News)

Weekend

  • The managers of SVB's are exploring ways to buy the firm back from its parent company (BBG)

  • Rocket Lab has US$38 million in Silicon Valley Bank which collapsed on Friday (Stuff)

Deal Flow

Investments / M&A

  • A $10 billion AUD merger of equals between Australia's largest regional lenders, Bendigo and Adelaide Bank and Bank of Queensland, would be "too complex and value destructive" say Citi analysts who previously advocated a tie-up (AFR)

  • A private equity firm is seeking to raid a 10 per cent stake in ASX-listed funerals business InvoCare on Monday night, ahead a potential takeover offer (AFR)

  • Telecom Italia SpA's long-discussed plan to cut a $21 billion USD debt pile by selling off its most lucrative asset, the landline network, suddenly looks feasible, with two multi-billion-euro offers now on the table (AFR)

  • Shares in dual-listed church payment and management software company Pushpay have dropped 12 cents today after shareholders formally blocked a $1.539 billion takeover offer last week (NBR)

  • Mining giant Sibanye-Stillwater is a hair’s breadth away from delisting New Century Resources from the ASX, after five big lines of New Century shares sold into Sibanye’s hostile takeover offer in Tuesday’s trading and lifted its stake to more than 73 per cent (AFR)

  • Altria Group Inc said on Monday it would buy startup NJOY Holdings Inc for about $2.75 billion USD in cash, in a fresh bet by the Marlboro maker on the e-cigarette market after losing billions through its investment in Juul(RT)

  • The five nuclear-powered submarines America plans to sell to Australia from the 2030s will not be newly built but rebadged existing Virginia class models with price tags to be determined by the US State Department, officials said (AFR)

  • Brookfield Asset Management and EIG Partners are on track to sign a binding $18.2 billion takeover for Origin Energy as early as next week, bringing to a head seven months of negotiations (AFR)

  • Sequoia Financial Group has signed a binding deal to sell 80 per cent of its equities clearing business Morrison Securities to wealth management software business NewQuantum, as flagged by Street Talk on Tuesday (AFR)

  • Italy's biggest utility Enel Spa (ENEI.MI) on Thursday said it will sell its Romanian operations to Greece's Public Power Corp (DEHr.AT) (PPC) for 1.26 billion euros ($1.33 billion) as part of efforts to cut debt and focus on cleaner energy (RT)

  • Microsoft (MSFT.O) said it would license Activision Blizzard's (ATVI.O) "Call of Duty" (CoD) to Sony for 10 years to address concerns raised by Britain over its $69 billion takeover of the games maker, according to a document published by the regulator (RT)

  • Heineken NV’s purchase of South Africa’s biggest wine exporter got the final regulatory approval it needed, setting up the Dutch brewer for expansion across the continent (BBG)

  • Sanctioned Russian businessmen Mikhail Fridman and Petr Aven are in discussions over selling their stake in private Russian lender Alfa Bank to longtime business partner and Alfa Bank co-founder Andrei Kosogov (RT)

  • Goldman Sachs Group Inc. has sold a portfolio of rental homes in the north of England to PGIM Real Estate, a rare large institutional deal in a market that’s dominated by mom and pop investors (BBG)

  • Tata Technologies Ltd. has sought approval from India’s markets regulator for an initial public offering in which its parent carmaker Tata Motors Ltd. and other investors will sell as many as 95.7 million shares (BBG)

VC & Fundraising

  • ASX-listed Quebec lithium developer Sayona Mining is talking to Canadian investors to stitch up a capital raising, as it heads towards production and right after an investor presentation in the US (AFR)

  • Indian craft beer maker Bira 91 has raised $10 million from Japan's MUFG Bank, the companies said in a statement, as the New Dehli-based brewer looks to ramp up production and tap rising demand (RT)

Equity Raises

  • SoftBank Group Corp.’s Arm Ltd. is seeking to raise at least $8 billion in a US initial public offering (BBG)

  • Bravura Solutions will issue new shares at $0.40 each to help fund a big cost cuts program and buy some time for new CEO Libby Roy to execute a turnaround plan. The deal will see Bravura raise $80 million AUD via a one-for-1.73 entitlement offer and an institutional placement (AFR)

  • Embattled Indian conglomerate Adani Group said it prepaid share-backed financing of 73.74 billion rupees ($901.16 million), as it looks to allay fears over leverage and debt since a U.S. short seller's critical report sparked a stock rout (RT)

  • Brokers Goldman Sachs and UBS are seeking buyers for nearly 1 million shares left over from the first leg of Carsales.com’s rights issue (AFR)

  • Byju’s, the world’s most valuable edtech startup, is seeking to raise as much as $250 million through the issuance of convertible notes by its tutoring service unit, according to people familiar with the matter (BBG)

  • Atlas Energy Solutions Inc. raised $324 million in an initial public offering, pricing its shares below a marketed range for what was still the second-biggest US listing of 2023 (BBG)

  • Atlas Energy Solutions Inc. sunk in its trading debut after raising $324 million in an initial public offering priced below a marketed range (BBG)

  • Brait Plc, the investment firm controlled by billionaire Christo Wiese, will proceed with an initial public offering of food manufacturer Premier Group Ltd. on the Johannesburg Stock Exchange (BBG)

Debt Raises

  • London Stock Exchange-listed banking mutual Nationwide Building Society has held investor calls with Australian debt investors this month, in what could be laying the groundwork for its maiden Australian dollar deal (AFR)

  • Argentina Looks to Buy Time on $37 Billion of Maturing Debt (BBG)

Job Board

New Zealand

  • Murray & Co Investment Banking Intern and Grad Roles

    • Apply here for internships

    • Apply here for graduate roles

Australia

  • Goldman Sachs Investment Banking Intern

    • Apply here by 18th July for Melbourne and Perth and August 1 for Sydney

  • Macquarie gradate roles

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