Debt Ceiling Talks Leave Investors On Edge

Author

Euan Marshall
May 23, 2023

Good Morning,

SpaceX has launched four private astronauts en route to the International Space Station, Joe Biden said the relationship between the U.S. and China is expected to improve “very shortly”, NZX listed software solutions company Gentrack saw 26% gains on Monday and U.S. investors are on edge after Republican negotiators unexpectedly walked out of debt ceiling talks.

Let's jump in.

Before The Bell

Markets

  • The ASX 200 fell 0.2 per cent on Monday, snapping a two-day rally, as US debt ceiling talks dragged on, weighing on investor sentiment (AFR)

  • Ryman Healthcare’s shares have risen by as much as 7% as investors appear to be buoyed by signs the company’s reset strategy is going to plan (NBR)

  • U.S. investors are on edge after equities and the dollar got knocked back on Friday, when Republican negotiators unexpectedly walked out of debt ceiling talks (AFR)

  • Asian shares rose after U.S. President Joe Biden said the relationship between the US and China was expected to improve “very shortly” following their spat over an alleged spy balloon earlier this year (NBR)

  • Volatility gauges suggest traders expect smaller near-term swings in Ethereum compared with Bitcoin, a reversal of the usual pattern for the two largest digital assets in the cryptocurrency sector (BBG)

  • Gentrack shares surged 26%, making it the biggest gainer on the NZX today (Stuff)

Earnings and Data

  • NZX and ASX-listed software-as-a-service provider Gentrack posted a half-year profit of $7.9 million NZD this morning, and has upgraded its revenue guidance by $10m for the full year to between $157m and $160m (NBR)

  • A record $726 million was invested in New Zealand tech companies in 2022, up 8.2% ($55m) on the prior year despite a global funding crunch (NBR)

  • Infratil’s annual profit fell 28% to $891.7 million NZD after the infrastructure investor gleaned less from asset sales (Stuff)

  • Europe’s largest airline Ryanair expects 10% traffic growth this year to more than offset a 1 billion euro rise in its oil bill, as it posted slightly better than expected annual post-tax earnings of 1.43 billion euros (RT)

News Summary

  • The New Zealand Government has committed up to $140 million to enable New Zealand Steel to reduce its coal use at its Glenbrook plant in South Auckland by installing a $300m electric arc furnace (NBR)

  • Goldman Sachs Group Inc. economists estimated that the U.S. Treasury Department will by June 8 or 9 see its cash levels drop below the $30 billion it’s signalled as a bare minimum for meeting federal obligations falling due (BBG)

  • Authorities say they are investigating an apparent gunfight at an off-road vehicle rally in Mexico’s Baja California state that left 10 people dead and another 10 wounded (BBG)

  • SpaceX launched four private astronauts en route to the International Space Station, including the first woman from Saudi Arabia to travel to space (BBG)

  • Sydney’s house prices could rise by 10 per cent or more this year if the market maintains its rate of growth, which is fuelled by low stock and resurgent demand, experts say (AFR)

  • Regulators are dusting off rule books to tackle generative AI like ChatGPT (RT)

  • Greek Prime Minister Kyriakos Mitsotakis pummeled his opposition in Sunday’s national election, moving a step closer to getting another four-year term and sending markets higher on the prospect that the premier’s investment-friendly policies will continue (BBG)

  • Facebook owners Meta Platforms Inc. was hit by a record 1.2 billion Euro privacy fine by the European Union and given a deadline to stop shipping users’ data to the US after regulators said it failed to protect personal information from the prying eyes of American security services (BBG)

Deal Flow

VC & Fundraising

  • Listed liqour producer and marketer Top Shelf International Holdings was drumming up interest in a $35 million to $40 million AUD recapitalisation over the weekend, with blessings from its substantial shareholder Salter Brothers (AFR)

  • Ramsay Health Care’s attempts to stitch up its first corporate bond deal appears to be struggling to gain traction with investors (AFR)

Debt

  • Failed early childcare operator The Rainbow Group owes close to $20 million NZD to creditors (NBR)

Daily Picks

  • Read more here about AFR’s skepticism regarding Wall Street’s rosy reports on the economy of China

Job Board

New Zealand

  • ASB rural banking graduate - Apply here

  • Waterman Capital investment analyst - Apply here

Australia

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  • Goldman Sachs Investment Banking Intern - Apply here

  • IMC graduate and intern roles - Apply here

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