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October 16, 2023

Good Morning,

Fonterra has increased the farmgate milk price forecast for this season, Kiwbank has agreed to pay an $812,500 penalty after it overcharged customers bank fees for more than a decade, the rate of construction cost increases has fallen below the 10-year average in New Zealand, and the National party is poised to take control following the election results.

Let’s jump in!

Before The Bell

Markets

  • Australians devote a greater share of their income to mortgage repayments than any other advanced economy, the IMF has revealed, as it downgraded its forecasts for the local economy and warned inflation will be higher than previously thought. (AFR)

  • In its latest World Economic Outlook, the IMF left its forecast for global real GDP growth in 2023 unchanged at 3.0% but cut its 2024 forecast to 2.9% from its July forecast of 3.0%. World output grew 3.5% in 2022. (RT)

  • U.S. stocks have surfed through multiple crosscurrents over the past week - from the blistering spike in Treasury yields to the Middle East shock at the weekend - but they remain on board amid what the IMF sees as "remarkable" U.S. economic strength. (RT)

  • Oil prices on Friday rose more than 4% after the U.S. tightened sanctions against Russian crude exports, exacerbating supply concerns in an already tightly balanced energy market (CNBC)

Earnings & Data

  • The co-operative on Monday lifted its farmgate milk price forecast to between $6.50 and $8 per kilogram of milk solids. That increased the midpoint, which farmers are paid off, by 50 cents to $7.25 per kgMS. (Stuff)

  • Brent crude fell 36 cents to $87.79 a barrel by 0805 GMT, while U.S. West Texas Intermediate (WTI) crude eased 35 cents to $86.03 a barrel. Both benchmarks had fallen by more than $1 in earlier trading before recovering slightly. (RT)

  • German carmaker BMW saw group sales of its battery-electric vehicles surge by 79.6% year on year in the third quarter of 2023 to 93,931 units, the company said on Tuesday. (RT)

  • Fletcher Building entered a trading halt after questions on leaky pipes briefing were asked (NBR)

  • Pacific Edge has warned the risk of non-coverage by Medicare for its Cxbladder product is more elevated than they had assed last (NBR)

  • Sky Television shares have leapt 14% after the NZX lifted a trading halt on the firm that it imposed because of takeover talks (Stuff)

  • Renters are likely feeling the squeeze after rental property prices increased by 7.2% in the past year, the second-highest rate on record (Stuff)

  • MediaWorks has reported a NZD$110 million drop in value after a net loss of almost NZD$10m in the last financial year (Stuff)

News Summary

Monday

  • Fonterra has increased the farmgate milk price forecast for this season (Stuff)

  • A senate inquiry has recommended a review of the Qatar flight decision (9 News)

  • Commonwealth Bank is looking at cutting almost 200 jobs (9 News)

Tuesday

  • Kiwbank has agreed to pay an $812,500 penalty after it overcharged customers bank fees for more than a decade. (Stuff)

  • The Albanese government is moving to regulate Apple Pay, Google Pay and other new digital payment services by expanding the Reserve Bank’s powers, with draft legislation to be released on Wednesday. (AFR)

  • The US is warning Iran to stay out of Israel’s conflict with Hamas as American weapons begin flowing to its Middle East ally after the weekend’s terror attack, and as Israel called up an unprecedented 300,000 reservists for the conflict (AFR)

Wednesday

  • Peanuts and hazelnuts could become more expensive due to drought and insect problems overseas (Stuff)

  • The Auckland housing market is starting to recover (Stuff)

  • The rate of construction cost increases has fallen below the 10-year average in New Zealand (Stuff)

Thursday

  • Rental prices jump 7.2% to second-highest rate on record (Stuff)

  • Vero handed record $3.9 million penalty for making false and misleading statements to customers (Stuff)

  • Billionaire Investor Paul Tudor Jones Calls Geopolitics ‘Most Threatening’ He’s Seen (BBG)

Friday

  • A Royal New Zealand Air Force (RNZAF) Poseidon crew has found three Fijian fishers nine days after they were reported missing (1 News)

  • Trade Me is “stuck in 2010” when it comes to cybersecurity and protecting its users from scams, an expert says (Stuff)

  • Tributes are pouring in for a New Zealand-born soldier who was killed in action during the Hamas militant attack on Israel (1 News)

Weekend

  • AB’s advance into semi-finals after beating Ireland (Stuff)

  • The National party is poised to take control following the election results (NBR)

  • Ferrari will start accepting cryptocurrency as a form of payment for its vehicles in the United States (RT)

Deal Flow

Investments / M&A

Australia & New Zealand

  • Japan’s NTT has dropped out of the auction for cybersecurity company Versent, leaving Telstra in pole position (AFR)

  • Ramsay Health Care has lobbed a bid for Cura Day Hospitals (AFR)

  • The deadline for bids for Pacific Current Group is drawing closer (AFR)

  • Timaru-based honey producer The Mānuka Collective has acquired part of Ngāi Tahu’s Oha Honey (Stuff)

  • French-based company Vinci Group is interested in acquiring EastLink. (AFR)

  • The ACCC has waved through Brookfield and EIG’s $18.7 billion (AUD) deal for Origin Energy. (AFR)

  • EQT has bought VetPartners for ~$1.4B (AUD) (AFR)

  • Telstra has bought cloud services business Versent for $267.5m (AUD) (AFR)

  • Good Spirits Hospitality’s sale of its business for $20.7m (NZD) has been judged as fair via an independent valuation (NBR)

  • NYSE-listed giant Albemarle’s exclusive due diligence at Liontown Resources is over, and local billionaire Gina Rinehart’s 19.9% stake is casting a shadow on a big payday for investors (AFR)

  • UBS has been bought as a defence advisor for Adore Beauty(AFR)

  • Pressure mounts on Fletcher over Aussie pipe failures (NBR)

  • Air NZ guides HY earnings between $180m and $230m (NBR)

  • A quantum of shareholders asking Sky TV why it had put an extended pause on its share buyback forced the company to admit this morning it had received a non-binding indicative offer from an unnamed third party (NBR)

  • Fintech upstart Stake, which is chaired by ex-Perpetual chief executive Geoff Lloyd, has tabled a non-binding takeover offer to acquire ASX-listed rival Selfwealth at AUD17.5¢ (AFR)

Key Global

  • HSBC has bought Citi’s Chinese retail wealth management portfolio (BBG)

  • Accounting giant Deloitte is acquiring some of rival PricewaterhouseCoopers' (PwC) Maldives and Sri Lanka network firms, according to a Deloitte memo seen by Reuters, strengthening the company's presence in the South Asia region. (RT)

  • Truist Financial is in talks to sell its insurance brokerage unit to private equity firm Stone Point for about $10 billion, news website Semafor reported on Monday, citing people familiar with the matter. (RT)

  • Exxon Mobil is close to a $58B (USD) deal to buy Pioneer Natural Resources (BBG)

  • KKR is considering the sale of Q-Park, which may value the European car park operator at about €4B (BBG)

  • Codelco, the world’s biggest copper producer, is nearing a deal to acquire Lithium Power International that could value the ASX-listed firm at nearly $315m (AUD) (BBG)

  • Birkenstock Falls Almost 13% as US Trading Debut Flops (BBG)

  • Goldman Strikes Deal to Sell GreenSky Unit to Sixth Street Group (BBG)

  • Jim Ratcliffe is emerging as the frontrunner to buy into English football giants Manchester United Plc, people with knowledge of the matter said, with the British billionaire’s recently revised offer giving him the edge over a rival proposal from Qatari investors (BBG)

  • Sculptor Capital Management Inc. agreed to an increased bid of USD$676 million from suitor Rithm Capital Corp., the latest salvo in its fight with a consortium led by Boaz Weinstein to acquire the hedge fund firm (BBG)

  • Atlassian Corp. agreed to acquire video-messaging startup Loom for USD$975 million, its largest deal ever, in a bet that more professional collaboration and instruction will be done remotely (BBG)

  • Microsoft Corp. said it completed its USD$69 billion purchase of Activision Blizzard Inc. after a nearly two-year fight with global regulators threatened to scuttle the deal (BBG)

  • Miami-based infrastructure investor I Squared Capital aims to sign a deal to acquire Deutsche Bahn's international transport business Arriva as soon as Monday (RT)

  • German insurer Allianz said on Friday it has entered into definite agreements to sell its 49% stake in CPIC Fund Management Co. to Chinese investment bank Guotai Junan Securities (RT)

VC & Fundraising

  • Mining-focused buyout firm Appian has raised $2B (USD) for a new fund (BBG)

  • New Zealand Spirits brand Scapegrace is raising $8m (NZD) (NBR)

  • Spirits brand Scapegrace is well underway with building New Zealand’s largest distillery on the banks of Lake Dunstan near Cromwell in Central Otago, but the distillery is just part of a much bigger plan for tourism and hospitality offering on the site. (NBR)

  • The Brothers Beer Group will avoid liquidation, after shareholders agreed to inject more than $1 million into the business to keep it afloat and some creditors agreed to take a haircut. (NBR)

  • Macquarie Asset Management is in talks with investors to raise as much as USD$11.5 billion in total for a trio of funds dedicated to Asia Pacific infrastructure, global renewables and energy transition, according to the people familiar with the matter (BBG)

Equity Raises

Australia & New Zealand

  • Bank of America research for IPO hopeful Cuscal Limitedlanded in front of investors, valuing the end-to-end payments outfit at as much as $736 million. (AFR)

  • Tasmea’s IPO is all go as pre-IPO materials hit inboxes. (AFR)

  • DevEx Resources is trying to raise $21.1m (AUD) via a $10m placement and an $11.1m non-renounceable entitlement offer (AFR)

Key Global

  • Cipriania, the operator of celebrity-packed restaurants and members’ clubs, is seeking to raise as much as €500m (BBG)

  • Metro Bank has raised £325m in new funding (BBC)

  • Birkenstock is looking to price its IPO at the top of the range (BBG)

  • Bain Capital is said to have delayed the IPO of Virgin Australia to at least 2024 (BBG)

  • Omani state energy firm OQ SAOC raised 288.2 million riyals (USD$748.6 million) in the initial public offering of its gas pipelines business after pricing it at the top of the range, making it the country’s biggest listing on record (BBG)

Debt, Restructuring & Bankruptcy

  • Metro Bank has refinanced £600m of debt (BBC)

  • Country Garden warned on Tuesday about its inability to meet offshore debt obligations, potentially joining a growing list of Chinese developers that have defaulted and setting the stage for one of the country's biggest debt restructurings. (RT)

  • Swedish private equity firm EQT Partners’ dealmakers are redirecting their energies to the debt financing for VetPartners, now that they’ve fended off rival bidders with their winning AUD$1.4 billion bid (AFR)

Job Board

New Zealand

  • ASB rural banking graduate - Apply here

  • Waterman Capital investment analyst - Apply here

Australia

  • Citadel Securities graduate and intern roles - Apply here

  • Goldman Sachs Investment Banking Intern - Apply here

  • IMC graduate and intern roles - Apply here

  • Jarden

    • Graduate role - Apply here

    • Summer internships - Apply here

  • Optiver

    • Graduate role - Apply here

    • Internships - Apply here

The Daily Deck is sponsored by Industrial Equity, LLC

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