Markets Stumble Following Global Rate Hikes

December 16, 2022

Good Morning,

Auckland mayor Wayne Brown was in hot water for airport comments, Coalition should have set higher climate target, says Birmingham, Bank of England hikes key rate by 50 basis points, will continue to respond ‘forcefully’ if needed, Elon Musk sells another huge chunk of Tesla shares, U.S. and Russia make another prisoner swap; Moscow says no ‘Christmas ceasefire’, Stock futures fall sharply following Fed update and ahead of more economic data.

Let's jump in.

Before The Bell

Markets

  • Following hawkish comments by Fed chairman Jerome Powell and a mediocre economic update from China the NZX 50 moved +0.2% higher to 11.609.99, The ASX 200 tumbled -0.6% to 7,204.80, and the Nasdaq (-0.8%) and S&P 500 (-0.6%) saw losses.

Earnings and Data

  • Australian employment increased by a huge 64,000 people over the month – more than 50 per cent higher than average – while unemployment rose by a slim 7400, keeping the jobless rate steady at a 48-year low 3.4 per cent. (AFR)

  • The New Zealand economy grew by a dramatic 2% in the three months to the end of September, far above economists’ forecasts, Stats NZ has reported. (Stuff)

  • Bank of England hikes key rate by 50 basis points, will continue to respond ‘forcefully’ if needed (CNBC)

  • Following the election defeat, Opposition Leader Peter Dutton signalled that the Coalition would take a higher target than the 28 per cent reduction in emissions by 2030 set by the Morrison government, and is developing policy around nuclear energy. Labor has enshrined a 43 per cent target. (AFR)

News Summary

  • Tesla CEO Elon Musk sold about 22 million more shares in his electric vehicle business, which were worth around $3.6 billion, according to a financial filing out Wednesday night. The transactions took place between Monday and Wednesday this week according to the filings with the Securities and Exchange Commission. (CNBC)

  • U.S. and Russia make another prisoner swap; Moscow says no ‘Christmas ceasefire’ (CNBC)

  • Auckland International Airport shares have resumed trading after being halted following speculative comments from Auckland mayor Wayne Brown that the company was planning a major capital raising to fund a new domestic terminal. (Stuff)

  • A 6.2 magnitude earthquake originating in the waters off Taiwan's eastern coast shook the island on Wednesday afternoon (local time), but no injuries or major damage were immediately reported. (Stuff)

  • Banks, ASIC face off with FTX on crypto licensing (AFR)

  • It’s waggy tails and floppy ears all around at Jarden Australia and Melbourne’s Intrinsic Partners, whose lead bankers scored advisory roles on Woolworths Group’s $586 million play for PETstock owner Petspiration Group. (AFR)

  • ANZ chairman Paul O’Sullivan has been accused by the founder of climate activist shareholder group Market Forces of deliberately misleading the bank’s annual meeting in his opening remarks by misconstruing the basis for a shareholder resolution relating to lending to the fossil fuels industry. (AFR)

  • The Australian Securities and Investments Commission has commenced civil proceedings in the Federal Court against Finder Wallet, a registered cryptocurrency exchange and subsidiary of Finder.com. (AFR)

  • The chief executive of agribusiness and pastoral group Elders says a share price drop of 23 per cent that wiped $475 million from the group’s value on the announcement of his departure next year is a “gross overreaction” and he does not take it as a compliment. (AFR)

  • Elon Musk, once worth as much as $340 billion, has been displaced as the world’s richest person by Bernard Arnault. (BBG)

  • After some moderate successes halting deals among smaller companies, on Dec. 8 Khan launched her biggest challenge yet: a suit to block Microsoft Corp.’s $69 billion purchase of Activision Blizzard Inc. (BBG)

Deal Flow

Investments/ M&A

  • More details are emerging about Skip Capital’s looming interest in burrito maker Zambrero, with the deal on track to be signed next week. The raising’s expected to see Zambrero, which has never raised a dollar from external investments, pick up about $250 million in fresh capital at a valuation north of $700 million. (AFR)

  • Qatar’s Nebras Power has joined Goldwind at the $750m 312 megawatt Moorabool Wind Farm in Victoria, Australia’s sixth-largest operating wind farm. Nebras Power has struck a deal to acquire a 49 per cent stake, putting it on the share register alongside Hong Kong and Shenzhen listed windfarm developer and owner Goldwind’s local arm Goldwind Australia. (AFR)

  • Woolworths Group boss Brad Banducci says there is plenty of growth left in the booming pet sector, from doggy daycare to nutrition and grooming, after the grocery giant snapped up a 55 per cent stake in pet business Petspiration Group for $586 million. (AFR)

  • Spark is in talks with TVNZ about a potential “content partnering agreement” covering Spark Sport, the telco said on Thursday. (Stuff)

  • Telecommunications company 2degrees has agreed to sell its cellphone towers for $1.08 billion to a firm jointly owned by rival Spark and a Canadian pension fund. (Stuff)

  • Private equity firm Coral Tree Partners has purchased the digital jukebox service provider AMI Entertainment Network from Gores Group. Financial details of the transaction weren’t disclosed in a statement reviewed by Bloomberg News. AMI is valued in the transaction at up to $175 million (BBG)

  • Mitsubishi UFJ Financial Group Inc. is in talks to invest about $200 million in Akulaku Inc., an Indonesian online lender backed by Jack Ma’s Ant Group Co., according to people familiar with the matter. (BBG)

  • DEPT, a technology and marketing business owned by Carlyle Group Inc., has agreed to buy smaller peer Melon. The Amsterdam-based company will pay about $50 million to $60 million to acquire Melon, people familiar with the matter said, asking not to be identified discussing confidential information. (BBG)

  • Rice Acquisition Corp. II agreed to merge with NET Power in a deal valuing the combined company at about $1.5 billion, including debt, according to a statement Wednesday confirming a Bloomberg News report. (BBG)

  • Blackstone Weighing Options for $1 Billion Ayumi Pharma, Sources Say. (BBG)

  • A gamut of Ark Investment Management LLC’s funds, including Wood’s flagship Ark Innovation ETF, bought nearly 75,000 shares of Tesla and about 297,000 of Coinbase on Wednesday, continuing a dip-buying streak that started in October, according to data compiled by Bloomberg. (BBG)

  • Abu Dhabi Funds led by ADQ are in talks to buy a stake worth about $855 million in Israeli financial services firm Phoenix Group as the United Arab Emirates expands into the country after normalizing ties two years ago. (BBG)

VC & Fundraising

  • Start-up Avenue Bank, which sells a partially secured bank guarantee product to SMEs, is donning the hard hat to put a $10 million capital raising to investors. (AFR)

  • 5B, the Malcolm Turnbull and Simon Holmes à Court-backed modular solar panel pioneer, has secured a funding injection of $20 million from BP’s venture capital fund to speed the development of automated production. (AFR)

  • Four major Japanese banks have agreed to provide a loan totalling 1.2 trillion yen ($8.8 billion) to the Japan Industrial Partners Inc.-led consortium for its buyout offer for Toshiba Corp., people familiar with the matter said. (BBG)

  • Mews, a cloud-based software company that serves the hospitality sector, has raised $185 million in a funding round led by Kinnevik and Goldman Sachs Asset Management. (BBG)

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