Unfortunate Outlook on House Prices

February 24, 2023

Good Morning,

An Auckland home with a swimming pool has sold at auction for almost $1 million less than it did just over a year ago, House price slide expected to continue into next year, survey shows, Bill Gates has bought a 3.76% stake in Dutch drinks giant Heineken.

Let's jump in.

Before The Bell

Markets

  • The NZX 50 gained +0.8% to 11,888.50, while the ASX 200 moved -0.4% lower.

  • Internationally, the S&P 500 lost -0.2%, and London's FTSE 100 shed -0.6%.

Earnings and Data

  • Auckland International Airport returned to profit as it benefits from pent-up demand for travel after the Covid-19 pandemic. The country’s biggest international gateway reported an underlying first-half profit of $68 million in the six months to December 31, from a loss of $11.5m last year (Stuff)

  • Campervan company Tourism Holdings returned to profit as strong demand coming out of the pandemic underpinned prices. The company reported a $25.2 million first-half profit in the six months to December 31, compared with a $4.4m loss last year. First-half revenue lifted 49% to $261m (Stuff)

  • Kiwibank’s chief executive said the company’s $98 million net profit – reported today – would not be deemed as excessive and supported a proactive discussion on the issue with industry counterparts (NBR)

  • Comvita’s bottom line was $4.2m, up 19.4% on last year’s net profit of $3.5m, while its earnings before interest, tax, depreciation and amortisation (ebitda) rose 12.1% to $13.4m (NBR)

  • The NZX today reported full-year revenue growth of 9% to $95.7 million, driven by growth in its other business lines such as Smartshares and Wealth Technologies (NBR)

  • Tourism Holdings posted a net profit after tax of $25.2 million for the six months ending December 31, 2022 following a period of losses due to the Covid-19 pandemic and closed international borders (NBR)

News Summary

  • An Auckland home with a swimming pool has sold at auction for almost $1 million less than it did just over a year ago (Stuff)

  • Sky TV begins selling its new Sky Box, but reveals delay cost millions (Stuff)

  • Air New Zealand looks to pay a dividend this year. The airline had previously said a distribution to shareholders would not be considered until FY26 (NBR)

  • There are no signs yet of any reduction in demand for quality office space, Precinct Properties told the market on Thursday. The inner-city property owner and developer’s portfolio of properties in central Auckland and Wellington was 98% occupied, it said (NBR)

  • The New Zealand Shareholders’ Association will vote any shares for which it holds a proxy against Pushpay’s $1.34 a share takeover (NBR)

  • Prolific investor Aware Super has lost two portfolio managers from its equities team, who were responsible for the superannuation fund’s substantial stakes in the likes of Bapcor, Downer and Carsales (AFR)

  • Chinese lithium prices fall 30pc on weak EV demand (AFR)

  • Adani’s Brother Plays Opaque, Powerful Role at Embattled Dynasty (BBG)

  • News Corp. is no longer involved in discussions to sell its Move Inc. subsidiary to CoStar Group Inc., the company said in a statement Tuesday (BBG)

Deal Flow

Investments / M&A

  • Investor sources said Pengana had made several recent offers to roll up the four Cordish Dixon funds in a series of scrip mergers into its Pengana Private Equity Trust, via deals that would create a $1 billion ASX-listed private equity champion (AFR)

  • Sydney private equity firm Potentia Capital’s freshly lobbed $2.17 to $2.25 bid for Nitro Software scored an early win on Thursday afternoon, even as it holds breath for the target board to switch sides on its recommendation (AFR)

  • Melbourne-based Atlas Arteria will not take on cross-town rival Transurban Group for a stake in EastLink, and will instead focus on bedding down its recent $US2 billion acquisition in the United States (AFR)

  • Downer EDI Ltd has chipped off another business unit, agreeing to sell its construction services arm Australian Transport Projects (ATP) to Malaysia’s Gamuda Berhad for $220 million (AFR)

  • Chris Ellison’s Mineral Resources will stump up close to $1 billion for a share in lithium hydroxide plants in China in a rebuff to Prime Minister Anthony Albanese’s push for onshore processing of battery minerals into finished products (AFR)

  • Euronext NV has made an indicative takeover offer to buy fund distribution platform Allfunds Group Plc for €5.5 billion ($5.9 billion) in cash and stock (BBG)

  • JX Nippon Exploration and Production Ltd. is considering selling its U.K. North Sea assets as it conducts a review of its global portfolio, but hasn’t yet made a final decision, the company said in a statement on Wednesday (BBG)

  • Amazon.com Inc. says it has completed its purchase of One Medical parent 1Life Healthcare Inc., sealing the $3.49 billion acquisition after the US Federal Trade Commission declined to challenge it (BBG)

  • France's NGE announces deal to build 330km of high-speed trainline in Egypt (RT)

  • Indian low-cost airline IndiGo (INGL.NS) is negotiating the purchase of "several hundred aircrafts" from Airbus (AIR.PA), French Finance Minister Bruno Le Maire said in comments published by Les Echos on Thursday (RT)

  • Exchange operator Euronext (ENX.PA) has submitted a preliminary offer to buy fund distribution firm Allfunds (ALLFG.AS) for 5.5 billion euros ($5.85 billion) in a deal that would help the Paris Stock Exchange operator advance diversification (RT)

VC & Fundraising

  • Apollo Global Management Inc. is in talks to inject $750 million to support the leveraged-finance business of Credit Suisse Group AG’s investment-banking spinoff First Boston, potentially making it one of the biggest backers of the Swiss lender’s revamp (BBG)

  • The electric-vehicle battery unit of Sunwoda Electronic Co. is considering raising as much as 4 billion yuan ($580 million) of fresh funds ahead of an initial public offering on Shanghai’s Star board market, according to people familiar with the matter (BBG)

Equity Raises

  • The Star Entertainment Group has secured an $800 million equity recapitalisation via Barrenjoey and Macquarie Capital (AFR)

  • Investors snapped up all available shares within hours of the start of Adnoc Gas’s $2 billion initial public offering, showing that demand for Middle Eastern stock sales remains strong (BBG)

  • Credit Suisse Group AG and Mizuho Financial Group Inc. have joined the lineup of banks working on the listing of Olam Group’s agricultural business in Singapore and Saudi Arabia, according to people with knowledge of the matter (BBG)

  • SM Prime Holdings Inc. is considering reviving an initial public offering of a real estate investment trust that could raise as much as $1 billion, according to people familiar with the matter, in what would be the largest such listing in the Philippines (BBG)

Debt

  • Distressed Funds Blocked From Buying Debt No One Else Wants (BBG)

Daily Picks

  • Bill Gates has bought 3.76% stake in Dutch drinks giant Heineken Holding NV (HEIO.AS), although the billionaire founder of Microsoft has previously said he was "not a big beer drinker." (RT)

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