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NZ Hits a Technical Recession
Good Morning,
GDP data released on Thursday showed the NZ economy has hit a technical recession, European shares slipped on Thursday after the European Central Bank raised borrowing costs as expected and signalled more policy tightening in its fight against sticky inflation, and Vodafone and CK Hutchison unveiled the long-awaited 15 billion pound ($19 billion) merger of their British mobile operations.
Let's jump in.
Before The Bell
Markets
The S&P 500 and Nasdaq jumped to 14-month highs on Thursday as investors digested fresh economic data and bet that the U.S. Federal Reserve is nearing the end of its aggressive interest-rate hike campaign (RT)
European shares slipped on Thursday after the European Central Bank (ECB) raised borrowing costs as expected and signalled more policy tightening in its fight against sticky inflation (RT)
Asian stocks ended mixed on Thursday as new Chinese data disappointed and the U.S. Federal Reserve signaled that more rate hikes are in the cards. Investors also awaited cues from the ECB and BOJ meetings (RTT)
Earnings and Data
A tight talent pool is helping to drive wages up as businesses compete for employees. Recruitment firm Hays’ latest research found 95% of employers planned to increase salaries this year. Further, 66% plan to increase salaries more than 3%– a big step up from 37% last year and 12% the year prior (Stuff)
Gross domestic product (GDP) data released on Thursday showed the economy has hit a technical recession – and households are bearing the brunt of the pain, economists say. Stats NZ data for the March quarter showed the economy contracted by 0.1%, making two consecutive quarters of falling GDP (Stuff)
Chemicals group DGL has lowered its full-year earnings guidance to be flat year-on-year, citing increased costs which have eroded margins. The New Zealand-founded, ASX-listed company said today it now expected earnings before interest, tax, depreciation, and amortisation to be in the range of A$64 million to A$66m, down from a previously guided range of A$71.5m to $A$73.5m (NBR)
About 75,900 people found work in May, according to data released by the Australian Bureau of Statistics on Thursday, countering economists’ expectations for modest employment gains of 17,500 (AFR)
News Summary
Fonterra says the first year on the road for its electric tanker was a success, but there are challenges to overcome (Stuff)
A quartet of failed companies owned by an Auckland tax evader owes unsecured creditors more than $2 million, according to the first liquidators’ reports (NBR)
After the highs of the Covid period and the lows of being accused by a Commerce Commission study of making unseemly profits, supermarkets appear to have regained much of their good reputation with New Zealand consumers (NBR)
New Zealand’s startup ecosystem rose 14 spots in the rankings of the 2023 Global Startup Ecosystem Report (2023 GSER) despite a global slowdown in venture capital funding (NBR)
Scott Technology will do a strategic review of its ownership structure after discussions with its majority shareholder, JBS. The NZX-listed automation and robotic solutions company has hired Macquarie Capital as financial adviser for the review which “will explore options to maximise value for all shareholders” (NBR)
NZX issuers will be required to disclose their reasons for using “accelerated non-renounceable entitlement offer” (anreo) structures when seeking to raise capital, as well as setting out the likely impacts on non-participating shareholders (NBR)
Kiwi recession is a warning sign for Australia (and the big four) (AFR)
Get ready for a fresh face in the prime broking market. The mass exodus of global investment banks has left a gap in the sector, and disruptor bank Invast Global wants a piece of the action (AFR)
A bipartisan group of six senators and two members of the House of Representatives on Wednesday introduced legislation to protect Americans’ data from being used by U.S. adversaries (RT)
Vodafone boss Margherita Della Valle has bagged her first win with a merger deal in Britain, but the time it took to get there and the tortuous road ahead shows the scale of the challenge she faces to turn around the telecoms group (RT)
Powell Indicates at Least Two More Rate Hikes Ahead After Pause (BBG)
Petroleo Brasileiro SA is not considering proposing an offer to buy out Brazilian petrochemical maker Braskem SA, according to people familiar with the matter (BBG)
Survivors from an overcrowded fishing boat that capsized and sank on Wednesday off the Greek coast in one of the worst disasters in the Mediterranean in recent years have told doctors and police that women and children were travelling in the hold of the vessel (Guardian)
Boris Johnson deliberately misled parliament over Partygate and was part of a campaign to abuse and intimidate MPs investigating him, according to a damning official inquiry that threatens to further tear apart the Conservative party (Guardian)
Deal Flow
Investments / M&A
French luxury goods group LVMH has paired up with Epic Games, creator of Fortnite, to draw in customers with fitting rooms and fashion shows in virtual worlds (AFR)
Cerberus Capital Management, the $US60 billion ($88 billion) alternative asset investor, has tapped bankers at Citi as it considers a bid for ASX-listed shipbuilder Austal, Street Talk has confirmed (AFR)
SapuraOMV is understood to be working with JPMorgan to run its mooted selldown of New Zealand and Malaysian assets, which are together expected to be worth more than $US1 billion ($1.47 billion) (AFR)
The renewables’ developer, which is 50 per cent owned by British oil and gas giant BP, is marching ahead with a two-part auction for 1 gigawatt worth of Australian solar farms and 800 megawatts battery storage (AFR)
Barrenjoey and Morgan Stanley began taking bids into a variable price bookbuild for Abacus Property King’s Storage King spin off on Wednesday morning at a $1.41 floor price, which was a 10.2 per cent discount to the NTA (AFR)
Australia's AGL Energy said on Thursday it had signed a three-year deal with energy giant BP to provide easier access to electric vehicle charging points for users in New South Wales, in a bid to switch towards green energy (RT)
Gibson Energy said on Wednesday it will buy South Texas Gateway oil terminal from Buckeye Partners and its partners for $1.1 billion as the Canadian energy infrastructure firm looks to expand into U.S. crude oil export markets (RT)
Vodafone and CK Hutchison unveiled the long-awaited 15 billion pound ($19 billion) merger of their British mobile operations on Wednesday, saying the creation of a new market leader would help drive competition and investment (RT)
Rosen Group, an engineering firm specializing in testing oil and gas assets, is weighing a potential sale, people with knowledge of the matter said (BBG)
Kuwait reached an agreement worth $367 million with Turkish drone giant Baykar to purchase its increasingly sought-after TB2 combat drones, the Kuwaiti army said (BBG)
VC & Fundraising
Navigator Global Investments is expected to launch a raising on Thursday, fund manager sources told Street Talk. UBS and Jarden are joint advisers on the mooted deal, which is expected to comprise an entitlement offer and placement (AFR)
Hysata Pty Ltd., an Australian clean energy technology startup, is working with Morgan Stanley to help raise as much as A$100 million ($68 million) in a series B round (BBG)
Equity Raises
Daily Picks
President Vladimir Putin may struggle to hold on to power if the war in Ukraine forces Russia to abandon military aggression and accept a peace deal with Europe, former US Secretary of State Henry Kissinger said (AFR)
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