NZ House Prices Nearing Bottom?

May 12, 2023

Good Morning,

NZ house prices may not fall as much as expected, Westpac has claimed the only way to generate sufficient competition in the grocery sector for the benefit of consumers is to break up the existing Foodstuffs-Woolworths duopoly, BP is ramping up oil exploration and drilling activity in frontier prospects as the energy giant tries to stem a decline in its oil and gas output after years of focusing on a shift to renewables to cut carbon emissions.

Let's jump in.

Before The Bell

Markets

  • The Dow and the S&P 500 fell on Thursday, pressured by a drop in Disney shares after the company reported a fall in subscriber growth, while PacWest's latest woes sparked another rout in the regional banking sector (RT)

  • Europe's benchmark STOXX 600 was unchanged on Thursday as a drag by Germany's Bayer and energy stocks offset an earlier rise on hopes of a pause in the Federal Reserve's interest rate hike campaign amid supportive U.S. economic data (RT)

  • Asian stocks ended Thursday's session mostly lower as investors reacted to a mixed bag of corporate earnings from Japan and signs of growing deflationary pressures in China. The impasse over the U.S. debt ceiling overshadowed softer-than-expected U.S. inflation data (RTT)

  • The S&P/ASX edged 0.05 per cent, or 3.8 points, lower to 7251.9 on Thursday, as losses across the utilities sector offset gains in technology stocks (AFR)

Earnings and Data

  • Households will be paying twice as much as they do now on electricity within five years, the outgoing head of the Electricity Networks Association has forecast (Stuff)

  • Figures from Worldline show consumer spending weakened towards the end of April. The annual growth rate dropped from 8.3% in March to 3.8% in April (Stuff)

  • Wellington Airport passenger numbers have bounced back to 86% of pre-Covid levels, as the airport posts a profit of $25.2 million for the year (Stuff)

  • The New Zealand dollar spiked higher after a report showed United States inflation was slowing, taking pressure off the Federal Reserve to hike interest rates at its meeting next month. The US dollar index, which measures the greenback against a basket of currencies, dipped 0.6% after data overnight on Wednesday showed the US consumer price index (CPI) rose at a 4.9% annual pace in April, slower than the 5% expected (Stuff)

  • The average asking price for Christchurch apartments rose 16% to $748,700 over the year to April, according to the property website’s latest price index. In dollar terms, that was an increase of $101,050 (Stuff)

  • In a statement issued last night, Zespri chief executive Dan Mathieson said the company was expecting one of the lowest volumes of green kiwifruit in the past 20 years, with green variety trays down about 30% to 42 million trays from 61 million in 2022 (NBR)

  • It was another year of record activity in New Zealand’s private capital markets in 2022, with $4.99 billion of investment and divestment across private equity and venture capital transactions. The overall activity in 2022 was also significantly higher than the historical 10-year average of just over $2b and, to give the figures a wider context, some $12.2b has been invested in growing New Zealand companies in the past decade (NBR)

News Summary

  • The Government needs to break up Countdown and Foodstuffs if it wants to significantly improve competition in the supermarket industry, Westpac researchers say (Stuff)

  • House prices will not fall as much as previously expected, and the market downturn will not be as severe, economists say (Stuff)

  • The Financial Markets Authority has rejected claims from a financial advice provider that its misleading of existing and potential clients about returns did not have any impact on them (NBR)

  • Billionaire Andrew Forrest’s signature renewable energy project, the $3 billion Clarke Creek wind farm in central Queensland, has been put on hold and workers on site told to “demobilise” (AFR)

  • Australia’s national broadcaster has unveiled an organisation-wide restructure, warning there will be redundancies as it shifts regional bureau staff into its news division and creates a standalone content team (AFR)

  • The Turkish presidential candidate Muharrem İnce withdrew from the race after the release of a purported sex tape, boosting chances of outright success for other candidates in a race that polls suggest will be close (Guardian)

  • Blackstone Inc and Apollo Global Management were among about 20 bidders for some assets of collapsed Silicon Valley Bank, the Federal Deposit Insurance Corporation (FDIC) said on Wednesday (RT)

  • Proxy adviser Glass Lewis said on Wednesday Illumina Inc shareholders should vote for two of Carl Icahn's nominees to the firm's board, as representatives who can challenge the current board would be beneficial to the company (RT)

  • BP is ramping up oil exploration and drilling activity in frontier prospects as the energy giant tries to stem a decline in its oil and gas output after years of focusing on a shift to renewables to cut carbon emissions (RT)

  • Short seller Hindenburg Research hit again at Carl Icahn’s investment firm, saying the famed corporate raider failed to disclose enough in response to questions raised in its critical report (BBG)

Deal Flow

Investments / M&A

  • A deal to sell Good Spirits Hospitality’s trading assets is in its closing stages, according to the investment bank running the sale (NBR)

  • Proxy advisers are backing InvoCare’s board on the annual meeting resolutions – but it might not be enough if private equity firm and 19.9 per cent shareholder TPG casts its votes against the group (AFR)

  • Buyout firm Anchorage Capital Partners is assessing an aquisition of cinema chain Hoyts from China’s Wanda Cinema Line, and has tabled a first-round bid, Street Talk can reveal (AFR)

  • KPMG has mandated Grant Samuel to shop BWX’s 50.1 per cent stake in Go-to Skincare, while it aims to finalise a sell-side adviser for Sukin by May end (AFR)

  • Peter Coleman will become chairman of the world’s third-largest lithium producer once the $15.7 billion merger of New York-listed Livent and Australia’s Allkem is completed this year (AFR)

  • Australian lithium producer Allkem surged more than 14% on Thursday after announcing a $10.6 billion merger with U.S- based Livent to create the third-largest producer of the key component used in electric-vehicle batteries (RT)

  • Conglomerate Grupo Mexico is set to buy Citigroup Inc's retail banking operations in Mexico for about $7 billion in a deal that could be announced as early as this week, according to a person familiar with the matter (RT)

  • Deutsche Post's freight business could integrate large acquisitions, the head of the unit told Reuters on Wednesday, adding that if Deutsche Bahn's Schenker business were put up for sale, the company would have to see if it would be a good fit (RT)

  • EU antitrust regulators are set to approve Microsoft Corp's $69 billion acquisition of Activision next week, with May 15 as the likeliest date, people familiar with the matter said (RT)

  • Vitamin Shoppe owner Franchise Group Inc would be taken private by a group led by CEO Brian Kahn in a deal valued at about $2.6 billion, the company said on Wednesday (RT)

  • An investment consortium, comprising of Elliott Investment Management, Patient Square Capital and Veritas Capital, has agreed to take Syneos Health Inc private for $4.46 billion, the contract research firm said on Wednesday (RT)

  • Citigroup Inc. is nearing a deal to sell most of its Banamex retail operations to Grupo Mexico SAB for roughly $7 billion, according to people familiar with the matter. The Mexican conglomerate’s shares dropped by the most in almost four months (BBG)

  • Singapore sovereign wealth fund GIC Pte has emerged as the frontrunner to buy a stake in Messer SE, a deal that could value the German industrial gas maker at more than $10 billion, people familiar with the matter said (BBG)

VC & Fundraising

  • Blackstone Credit and Goldman Sachs Asset Management are expected to help bankroll TPG Capital’s mooted $700 million odd bolt-on acquisition for iNova Pharmaceuticals (AFR)

  • A digital infrastructure provider backed by Singapore’s state-owned investment firm Temasek Holdings Pte is considering raising as much as $1 billion in a funding round before its potential initial public offering, according to people with knowledge of the matter (BBG)

Equity Raises

  • Melbourne-based cloud services specialist Lab3 is preparing to raise money from external investors for the first time, seeking as much as $70 million to support growth via Wilson Advisory (AFR)

  • Nickel explorer Chalice Mining was in a trading halt on Thursday, and quietly putting together a $60 million private placement to accelerate exploration in the second-half (AFR)

  • Saudi Aramco is pushing back a planned Riyadh initial public offering of its energy-trading business, a deal that would have ranked as one of the world’s largest share sales this year, people with knowledge of the matter said (BBG)

Daily Picks

  • Pakistan supreme court rules arrest of Imran Khan was illegal (Guardian)

Job Board

New Zealand

  • ASB rural banking graduate - Apply here

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Australia

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