World Economic Forum kicks off in Switzerland

January 18, 2023

Good Morning,

Business confidence is at its weakest level in more than 60 years, according to the latest NZ Institute of Economic Research mood-gauge of businesses, China’s drop in births triggers new global challenge, a Chinese official told an audience of international billionaires and bankers that his country’s economy will likely rebound to its pre-pandemic growth trend this year after coronavirus infections passed their peak, the green trade row dividing the Davos elite.

Let's jump in.

Before The Bell

Markets

  • US Markets were closed for Martin Luther King Jr. Day. Markets everywhere else remained in good spirits on China's reopening. The NZX 50 rose +0.6% to 11,881.00 and the ASX 200 was flat at 3,999.09.

Earnings and Data

  • The Commonwealth Bank’s January consumer sentiment survey published yesterday found that although consumer sentiment increased by 5 per cent this month, the index level of 84.3 is “indicating that Australian consumers are very pessimistic”. (AFR)

News Summary

  • TVNZ has joined New Zealand Herald publisher NZME, RNZ and several smaller publishers in reaching a deal to supply curated news content to Google for use in its Google News app. (Stuff)

  • Wages in Nelson Tasman are rising as businesses use financial incentives to try and attract and retain staff. (Stuff)

  • Insurer Cigna has been fined $3.575 million​ at the High Court in Wellington​ for misleading, and overcharging, more than 52,000​ of its life insurance policyholders. (Stuff)

  • Consumer NZ says HelloFresh customers continue to be charged for meal kits they have cancelled (Stuff)

  • Controversial plans for the development of a $200 million waterfront Mission Bay retail, apartment, cinema and office scheme were last month rejected for a third time. (Herald)

  • The average mortgage rate paid in November 2022 was the same as in 2019. (Herald)

  • Sky TV is increasing the costs of Sky Sport by $3 per month from March 1, and the price of its Sky Sport Now streaming app by $5 per month from the same date. (Herald)

  • Business confidence is at its weakest level in more than 60 years, according to the latest NZ Institute of Economic Research mood-gauge of businesses. (NBR)

  • Trade Window Holdings has announced its intention to raise up to $20 million via a non-underwritten capital raising at 45 cents per share - a 10% discount on yesterday's market close price of 50 cents. (NBR)

  • Major gas suppliers’ refusal to offer domestic manufacturers contracts while they study the federal government’s price cap plan is preventing lower international prices filtering through to lower domestic prices, Credit Suisse energy analyst Saul Kavonic says. (AFR)

  • Traders Race Back Into Oil on Optimism Over China Reopening (BBG)

  • Higher expenses and a plunge in dealmaking hobbled quarterly results for two of Wall Street’s premier investment banks, with shares of Goldman Sachs Group Inc. sinking amid concern that the situation won’t improve anytime soon. Morgan Stanley’s report was less dour, and the stock gained ground in pre-market trading. (BBG)

  • Pfizer Inc. expanded its program to offer its products at not-for-profit prices in poor countries to include 500 drugs and vaccines. (BBG)

  • China’s top economic official told an audience of international billionaires and bankers that his country’s economy will likely rebound to its pre-pandemic growth trend this year after coronavirus infections passed their peak. (BBG)

  • Money-market traders are amping up bets on interest-rate hikes by the Bank of England after near-record UK wage growth put the spotlight firmly on Wednesday’s inflation report. (BBG)

  • Rio Tinto Boosts Iron Ore Production as Copper Set to Jump (BBG)

  • The green trade row dividing the Davos elite. (BBC)

Deal Flow

Investments / M&A

  • Self-proclaimed Australian “Mining-Tech” business Imdex is on the acquisition trail, keen to pick up a chunky offshore target (Devico) to shore up its position in global markets. (AFR)

  • Private equity group Pemba Capital is trying to bring its $119 million bid for SaaS business MSL Solutions to a head, with an unusual “best and final” statement two weeks out from a scheme meeting. (AFR)

  • Emerson Electric Co. went public with its months-long pursuit of National Instruments Corp., revealing a bid to take over the maker of measurement systems for about $7 billion. (BBG)

  • Nissan Motor Co.’s independent directors endorsed proposals from Renault SA to rebalance a 23-year-old alliance and pave the way for the French carmaker’s own revamp, two people familiar with the situation said. (BBG)

  • Invesco Ltd. and Man GLG Plc will take over British discount retailer Matalan Ltd. in a deal that will reduce the debt burden of the struggling UK retailer. (BBG)

VC & Fundraising

  • Spark Infrastructure’s new owners have begun shopping the group’s once controversial solar and wind projects investment platform, Spark Renewables, only one year after they took the parent company off the ASX boards. (AFR)

Equity Raises

  • Fund managers expressed caution about backing Virgin Australia’s potential return to the ASX amid the rally in airline stocks, citing the carrier’s checkered history and the dominant position of rival Qantas as key concerns should an initial public offering proceed. (AFR)

  • Indonesian miner Nickel Industries was drumming up interest in sizeable equity raising after market on Tuesday, which investors reckon would help bankroll a planned acquisition of new assets. (AFR)

  • Listed gold explorer Black Cat Syndicate was asking investors to tip in $15 million odd via a share placement, a day after it boosted the resource at its Coyote operations in Western Australia by 32 per cent. (AFR)

  • Liberty Mutual Holding Co. is exploring a sale of its Latin America businesses as part of the US insurer’s divestment plans from non-core markets, according to people with knowledge of the matter. (BBG)

  • China’s Muyuan Foods Co. has selected China International Capital Corp. and JPMorgan Chase & Co. to arrange its planned global depository receipts sale in Switzerland, according to people with knowledge of the matter. (BBG)

Daily Picks

  • Generative artificial intelligence, tech that can invent virtually any content someone can think up and type into a text box, is garnering not just venture investment in Silicon Valley but interest in Davos at the World Economic Forum's annual meeting this week. (RT)

  • China’s drop in births triggers new global challenge. (AFR)

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