‘Take the politics out of tax’: PwC partner

Author

Maren Ishak
February 19, 2024

Good Morning,

Mixed signals in markets this week! European and Japanese stocks soared, while US investors fretted over inflation. Fletcher Building's news shook Australia, and Incitec Pivot's fertilizer sale heats up. Big deals: Bristol Myers' M&A bond draws crowds, and Colorado blocks Kroger-Albertsons merger.

Let’s jump in!

Before The Bell

Markets

  • Inflation news spooked investors, with consumer prices rising 0.3% in January (above expectations) and core prices up 0.4%, keeping yearly inflation at 3.9% (Fed target: 2.0%) (TRP)

  • European stocks rallied on hopes of cooling inflation and potential interest rate cuts: STOXX 600 rose 1.39%, DAX gained 1.13%, CAC 40 hit new highs with 1.58% increase, FTSE MIB climbed 1.85%, and FTSE 100 added 1.84% (TRP)

  • Japanese stocks surged, with Nikkei 225 jumping 4.3% and TOPIX gaining 2.6%, near 34-year highs on weak yen and upbeat earnings, despite concerns over uncertain future monetary policy due to weak growth data (TRP)

Earnings & Data

  • Synlait guides HY loss; Fonterra upgrades milk price forecast (NBR)

  • T&G annual loss could double initial estimates due to Cyclone Gabriel (NBR)

  • A 17% increase in net profit after tax (npat) to A$1.94 billion ($2.07b) for the six months to December 2023 has done little to slow the slide in CSL’s share price following an announcement yesterday that a new heart drug failed its trial (NBR)

  • Nicholas O’Kane, who earned A$58m in 2023 as head of the commodities and global markets division (CGM), will step down from the role this month to “pursue opportunities outside Macquarie” (NBR)

  • The opening of three new stores help drive JB Hi-Fi’s total sales growth in New Zealand by 5.1% to $168.7 million, even as comparable sales – which assess established stores sales success with previous comparable periods – fell by 1.2% (NBR)

  • Fletcher Building has made a $120 million net loss after tax in its interim result and its chief executive has resigned, giving six months’ notice (Herald)

  • Macquarie Group Ltd.’s profit fell due to reduced activity in its commodities and global markets business, while the veteran head of the division will step down later this month (RT)

  • ASB profit drops 12%, loan margins squeezed (Stuff)

  • Germany's Commerzbank posts biggest net profit in 15 years (RT)

  • Jet engine maker Safran posts higher 2023 core profit (RT)

  • Coinbase Global reported a profit of US$273.4 million, its first quarterly profit since 2021 on sturdy trading volumes due to a resurgence of interest in crypto (BBG)

  • IAG New Zealand insurance profit rose to A$204 million ($218m) in the six months to December 2023, up from A$136m in the same period the prior year (Herald)

News Summary

Monday

  • Christopher Luxon queried about David Seymour (Stuff)

  • Credit cards bridging financial gaps for millions of Aussies (9 News)

  • Protests take place across Pakistan amid election vote-rigging allegations (Guardian)

Tuesday

  • Russian forces have constructed a nearly 20-mile (30km) barricade made of old train carriages in eastern Ukraine, thought to be a defensive fortification designed to slow any Ukrainian counterattack. (Stuff)

  • Catastrophic summer storms have wreaked havoc on Victoria’s electricity system, taking down transmission lines and forcing the state’s biggest coal power station offline, leaving half a million customers without power and stoking fears about the vulnerability of the grid. (AFR)

Wednesday

  • A church youth leader who was found guilty of conspiring with an American rapper and three Air New Zealand baggage handlers in a thwarted attempt to smuggle $8 million worth of methamphetamine via an international flight to Auckland (Herald)

  • Melbourne Rebels chief executive Baden Stephenson has left the embattled rugby union club as it deals with the ongoing fallout of years worth of unpaid taxes and supplier fees (AFR)

  • Elon Musk has claimed that Delaware, home to much of corporate America, is trying to prevent businesses from heeding his call to leave the state, where a court invalidated his $56 billion Tesla pay package (RT)

Thursday

  • Bankrupt company director jailed over unpaid tax (Stuff)

  • ‘Take the politics out of tax’: PwC partner (NBR)

  • Japan unexpectedly slips into recession, Germany now world's third-biggest economy (RT)

Friday

  • The level of inflation business leaders and forecasters are predicting is concerning the Reserve Bank governor (RNZ)

  • Nearly 300 bottles of alcohol supplied to student flat (RNZ)

  • Coinbase rises after JPMorgan analyst ditches short-lived bear call (BBG)

Weekend

  • Watch: 'State of the nation is fragile', Christopher Luxon says (Stuff)

  • Blast from the past: fin serv execs set to debut M&A play on the ASX (AFR)

  • Trump tells supporters his $355 million fraud fine is election interference (RT)

Deal Flow

Investments / M&A

Australia & New Zealand

  • Fletcher Building’s shock disclosure of further impairment charges and the possible resignation of chief executive Ross Taylor has left analysts questioning the board’s accountability for continuing bad news at the building and materials giant (NBR)

  • Australian fund manager Betashares has marked $100 million under management sourced through New Zealand-based financial advice platforms and has signalled its intention to list some of its exchange-traded funds on the NZX in future (NBR)

  • Famed property developer Tim Gurner has taken time away from taunting tradies. Street Talk understands the Gurner Group founder is in discussions with Roberts Co, the Sydney-based building contractor founded by Rich Lister Andrew Roberts (AFR)

  • The Ontario Municipal Employees Retirement System (OMERS) has rolled up its sleeves and entered the fray at NSW Land Registry Services, where London’s NatWest is running an auction to sell its 20 per cent stake (AFR)

  • ASX-listed Wide Open Agriculture wants to pour its cash and resources into hero product Buntine Protein – a legume-based protein powder used in protein supplements – and is seeking buyers for non-core regenerative food and drink brand Dirty Clean Food (AFR)

  • Investment banks circle sinking APM Human Services International (AFR)

  • Global travel management company The Appointment Group has acquired two of the country’s most prominent travel businesses, Red Hot Travel & Events and Sound Travels (NBR)

  • Kiwi giant Trade Me in bankers’ pitch books (AFR)

Key Global

  • German direct investment in China rose by 4.3% to a record high of 11.9 billion euros ($12.7 billion) last year and also increased as a share of the country's overall investment abroad, official Bundesbank data analysed by the IW institute showed (RT)

  • Bristol Myers Sees Over $85 Billion of Demand for M&A Bond Sale (BBG)

  • Incitec Pivot’s protracted $1.5 billion fertiliser sale process has underbidders champing at the bit (AFR)

  • Colorado sues to stop $25 billion Kroger-Albertsons merger (RT)

  • Believe founder offers to buy music label in €1.46 Billion Privatization Deal (BBG)

  • Britain's Tritax Big Box agrees on possible US$1.17 bln offer for rival UK Commercial Property REIT Ltd (RT)

  • Commodities trader Vitol Group buys key stake in refiner Saras SPA, from Italian Billionaire Moratti. Valuing Saras SPA at €1.7 billion (BBG)

  • Novo Nordisk's controlling shareholder plans to invest up to $7 bln a year by 2030 (RT)

  • JPMorgan, Deutsche Bank tapped for $9.1bn Altium takeover (AFR)

VC & Fundraising

  • Kenya’s Ilara Health gets $4.2M debt-equity in a pre-Series A round to expand clinic-support services (TC)

  • Peak XV who split from Sequoia Capital takes startups on a Silicon Valley trip in AI push (TC)

  • Corporate adviser 333 Capital, best known for advising Bain Capital on its acquisition of Virgin Australia during the pandemic, has secured a role on Wiggins Island Coal Export Terminal’s monster refinancing (AFR)

  • Silicon Valley institution Y Combinator has released a new list of 20 types of startups it wants to join its accelerator program — calling for applications in sectors like artificial intelligence-powered robotics, space and defense technology (BBG)

Equity Raises

Australia & New Zealand

  • A group of 1980s industry execs are gearing up to launch their investment firm Australian Wealth Advisors Group on the ASX after raising A$5 million from investors (AFR)

Key Global

  • Street Talk understands UBS’ bankers are on hand to canvass takeover interest, which sources said had amounted to half a dozen inbound inquiries, The Swiss investment bank was a joint lead manager on the company’s 2022 sharemarket float alongside Goldman Sachs, Bank of America and Credit Suisse (AFR)

  • Sony Group Corp. said it will list its financial arm in October 2025, prepping a major capital infusion after the media conglomerate cut the forecast for its core gaming division (BBG)

  •  Hyundai Motor's planned $3 billion IPO in India will help the carmaker score two goals in one go: expand in one of the world's fastest growing markets and tackle the so-called "Korea discount" that suppresses the value of its business back home (RT)

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