Markets in the Green Amidst Reporting Season

January 27, 2023

Good Morning,

Inflation helps boost Government tax take. Grant Robertson says government accounts show NZ in good position to respond to global economic challenges, U.S. GDP rose 2.9% in the fourth quarter, more than expected even as recession fears loom, Toyota Motor Corporation’s President and Chief Executive Akio Toyoda will step down from his post on April 1, to be replaced by current Chief Branding Officer Koji Sato.

Let's jump in.

Before The Bell

Markets

  • The NZX 50 gained +0.2% to 12.023.46 while the ASX remained closed for Australia Day. Wall Street had a good day, with the Nasdaq climbing +0.9% and the S&P inching +0.6% higher. In Europe, the FTSE 100 added +0.2% to 7,770.29, and the STOXX 600 added +0.6% to 454.94.

Earnings and Data

Group 1 Automotive reported strong net income and revenue, driven in part by acquisition of smaller rivals (Automotive News) 

Excluding items, Amphenol Corp. reported adjusted earnings of $481.3 million or $0.78 per share for the period (RTT)

Alerus Financial Corporation (Nasdaq: ALRS) reported net income of $10.9 million for the fourth quarter of 2022, or $0.53 per diluted common share, compared to net income of $9.6 million, or $0.47 per diluted common share, for the third quarter of 2022, and net income of $12.7 million, or $0.72 per diluted common share, for the fourth quarter of 2021 (Yahoo)

U.S. GDP rose 2.9% in the fourth quarter, more than expected even as recession fears loom (CNBC)

American Airlines ’ fourth-quarter profit beat analysts’ expectations as strong travel demand and high fares buoyed results during a turbulent holiday season. Shares of American were down 2%, trading at around $16 on Thursday (CNBC) 

Tesla’s strong orders and weak margins in its latest earnings have analysts conflicted on the stock (CNBC)

News Summary

  • Inflation helps boost Government tax take. Grant Robertson says government accounts show NZ in good position to respond to global economic challenges. (NBR)

  • Leo Molloy prepares for a scrap with Good Spirits over licensing (NBR)

  • Kiwibank has warned customers of increasingly sophisticated credit card frauds, and other banks are taking similar measures to alert customers and bolster resources (NBR)

  • ‘Our people are highly desirable’: FMA staff turnover jumps. But the market regulator says 17% turnover rate is in line with pre-Covid levels and in the midst of a ‘very competitive’ job market (NBR)

  • Chipotle seeks to hire 15,000 restaurant workers ahead of busy spring months (CNBC)

  • Toyota Motor Corporation’s President and Chief Executive Akio Toyoda will step down from his post on April 1, to be replaced by current Chief Branding Officer Koji Sato, the Japanese automaker said Thursday (CNBC)

  • Rents in the Auckland region rose by over 3% last year, and that rate of increase was the highest since 2017, new Barfoot & Thompson figures show (Stuff)

  • The Warehouse Group, one of the country’s largest retailers, may cut 190 jobs at its Auckland support offices as it responds to “challenging market conditions” and increased online shopping (Stuff)

  • The Australian Competition and Consumer Commission has written to pet goods suppliers and other industry players, to investigate how Woolworths’ planned move in the sector could impact competition. (AFR)

  • Broker Morgan Stanley has tipped Australia’s big four banks to shake off worries over a slowing economy and falling house prices and lift dividends by 9 per cent on average in financial 2023. (AFR)

  • The New York Stock Exchange said a manual error caused wild price swings and trading halts for hundreds of company stocks when the market opened on Tuesday. (AFR)

  • Rupert Murdoch on Tuesday withdrew a proposal to reunite News Corp (NWSA.O) and Fox Corp as the company is also exploring a sale of Move Inc, which operates the Realtor.com website, to CoStar Group, according to a regulatory filing and sources familiar with the process (RT)

  • Hindenburg Research said it held short positions in India's Adani Group, accusing the conglomerate of improper use of offshore tax havens and flagging concerns about high debt that eroded $11 billion in investor wealth on Wednesday (RT)

Deal Flow

Investments / M&A

  • The ownership of The National Business Review, New Zealand’s oldest business publication, is set to change with a new shareholder in the wings. (Stuff)

  • Morrison & Co and Brookfield-backed Uniti Group is set to take on old sparring partner Vocus Group, now owned by Aware Super and Macquarie, and infrastructure funds in the battle for TPG Telecom’s Vision Network. (AFR)

  • Rupert Murdoch's News Corp is in talks to sell its Move Inc. online real estate business to CoStar Group Inc. (BBG)

  • Justin Bieber sells music catalog to Blackstone-Backed Hipgnosis (BBG)

  • Iberdrola (IBE.MC) is looking to sell a portfolio of gas, wind and solar assets in Spain which could raise more than $700 million, three sources with knowledge of the plans told Reuters. (RT)

  • Qatar is in talks to acquire a stake from French company TotalEnergies' (TTEF.PA) $27 billion cluster of energy projects in Iraq, three sources told Reuters, as Baghdad hopes to stem efforts by Western energy companies to exit the country. (RT)

  • Rogers Communications Inc's (RCIb.TO) long battle to buy smaller rival Shaw Communications Inc (SJRb.TO) overcame a major hurdle after the Canada Competition Bureau dropped plans to kill the deal following two defeats in courts in less than a month. (RT)

  • Britain's competition regulator said on Wednesday it had started the first phase of an investigation into U.S. chipmaker Broadcom Inc's (AVGO.O) $61 billion acquisition of cloud-computing firm VMware Inc (VMW.N). (RT)

Equity Raises

  • Origin Energy suitor Brookfield hunts co-investors for equity cheque (AFR)

  • Middle Eastern investors including International Holding Co PJSC and Abu Dhabi Investment Authority are bidding to buy stock in the $2.5 billion follow-on share sale floated by Indian billionaire Gautam Adani’s flagship, according to people familiar with the matter. (BBG)

Debt 

  • Debt concerns leave Asda investors fretting over mooted merger (BBG)

Daily Picks

China's reopened borders and renewed focus on boosting the sagging economy have brightened the deals outlook, with bankers starting to field interest for mergers, acquisitions and fundraising involving the world's second-largest economy. (RT)

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