Aussie CPI Bombshell

October 27, 2022

Good Morning,

ANZ has forecasted that house prices will fall 27% in New Zealand, Australia's CPI increased by 1.8% in the September quarter, bringing YOY inflation to 7.3%, Rishi Sunak has named his cabinet, US home prices cooled at a record pace, India has ordered Google to pay another fine of $113m (USD), China's economy slowed & the Hong Kong stock market rout is threatening $15B (USD) of losses on complicated structured products.

Let's jump in.

Before The Bell

Markets

  • Positive updates from leading stocks and another green day on Wall Street pushed the New Zealand market up.

  • The Australian market was up slightly after the gains were trimmed after the core CPI bombshell. (AFR)

  • All three major US market indexes were up for the third straight session.

  • The US dollar fell to a three-week low due to bets the federal reserve will slow rate hikes. (BBG)

  • China's offshore Yuan rose the most on record due to a suspected state bank intervention. (BBG)

Earnings

  • Alphabet missed Q3 EPS and revenue estimates. After slow revenue growth and a 2% decline in YouTube ad revenue. Their stock fell 6%+ in immediate AH trading (CNBC)

  • Visa beat Q4 EPS and revenue estimates. After strong consumer payments and e-commerce and an ongoing recovery in cross-border travel. It increased its dividend by 20%. Their stock rose ~2% yesterday (MW)

  • Restaurant Brands' sales for the third quarter were up 32% YOY. Their shares increased by 2.07%. (Herald)

  • Spotify beat Q3 revenue estimates. However, it posted worse-than-expected losses despite a 20% YoY increase in monthly active users and a 13% YoY increase in paid subscribers. This caused their stock to fall 7%+ in immediate AH trading (CNBC)

  • UPS beat Q3 EPS estimates but missed revenue estimates. This was due to softening global demand and declines within its supply chain solutions division. However, it reaffirmed its FY guidance of $102B in revenue. Their stock was relatively unchanged. (CNBC)

News Summary

  • New Zealand parliament has passed the Fair Pay Bill. (Stuff)

  • Federated Farmers have said they will not support the New Zealand governments farming emission proposal. (Stuff)

  • ANZ has forecasted that house prices will fall 27% in New Zealand. (Stuff)

  • American fast food chain TGI Fridays is eyeing six restaurants across the country. (Stuff)

  • Business confidence slid in New Zealand in October, according to ANZ. (Herald)

  • Australia's CPI increased by 1.8% in the September quarter, bringing YOY inflation to 7.3%. This was higher than expected. (AFR)

  • Medibank has confirmed all customers' data was accessed in a cyber breach. (AFR)

  • Rishi Sunak has named his cabinet, and it includes some surprises in an attempt to unify the party. (BBC)

  • US home prices have cooled at a record pace. (CNBC)

  • Democrats have retracted a call for Biden to negotiate a settlement to the war in Ukraine. (BBC)

  • The Saudi Arabian finance minister has said the world's energy transition might take 30 years. (RT)

  • India has ordered Google to pay another fine of $113m (USD) for anti-competitive practices. (BBC)

  • China's economy slowed in October, and small business confidence shrunk. (BBG)

  • The Hong Kong stock market rout is threatening $15B (USD) of losses on complicated structured products linked to that market. (BBG)

  • Adidas has cut its ties with rapper Kayne West. (BBC)

Deal Flow

Investments/ M&A

  • The Canadian government has imposed new conditions on Rogers Communications' $14.7B (USD) takeover of rival Shaw Communications. (BBG)

  • Telefonica, a Spanish telecommunications company and Liberty Global, a multination telecommunications company, are weighing the sale of their 50% stake in a UK towers venture, Cornerstone. Cornerstone is believed to be valued at $11.5B (USD). (BBG)

  • K1 Investment Management, a US investment firm, has acquired Australian software company Elmo Software for close to $500m (AUD). (AFR)

  • The UK competition watchdog has cleared the London Stock Exchange's $314m (USD) takeover of Quantile. (RT)

  • PE firm General Atlantic has bought a $100m (USD) stake in Mobileye Global, an Intel-controlled self-driving technology company. (BBG)

  • Germany has allowed China's Cosco to take a 24.9% stake in one of logistics firm HHLA's three-terminal at Germany's largest port in Hamburg. (RT)

  • Inditex, the world's biggest textile retailer and the owner of Zara, has sold its Russian business to UAE conglomerate Daher Group. (BBG)

  • Canadian pot producer Canopy Growth has acquired three US pot producers. (BBG)

  • The Della Valle family has failed to reach the 90% approval target it needed to take luxury shoemaker Tod's private. (RT)

  • British Gas has acquired the customers of AvantiGas ON's natural gas business. (RT)

  • Asia Pacific Healthcare Group, a New Zealand lab testing service company, has acquired New Zealand biotech company Rako Science. (NBR)

  • Australian IT services group Ericom has hired KPMG to sell the business and has started a two-part auction. (AFR)

  • Australian headquartered courier, warehousing and logistics provider Direct Couriers is looking for potential buyers. (AFR)

VC & Fundraising

  • Square Peg Capital, a VC firm, has closed the largest VC fund in Australia at $861m (AUD). (AFR)

  • Music licensing group Songtradr is seeking $52m (AUD) at a 17% valuation cut to their previous raise. (AFR)

  • Christchurch-based waste recycling tech company Zincovery has raised $3m (NZD) in a round led by Icehouse Ventures & Outset Ventures. (NBR)

Equity Raises

  • Saudi Arabian utility Marfiq formally known as Power and Water Utility Co has priced its IPO at the top end of the range to rise $897m (USD). After the IPO, draw $52.5B (USD) in interest. (BBG)

  • Mobileye Global, an Intel-controlled self-driving technology company, has priced its IPO above the range at $21 (USD) per share to raise $861m (USD). (BBG)

  • Australian-listed bricklaying robot maker FBR is seeking $20m (AUD) via a share placement at a 20% discount. (AFR)

  • PE firm VMG has sold a minority stake to PE firm Bonaccord Capital Partners. (BBG)

  • Minemet Recycling, a scrap metal business, is testing funds ahead of a potential $70m (AUD) IPO on the ASX. (AFR)

Debt

  • Elon Musk has told debt bankers who are providing $13B (USD) in debt funding that he plans to close the Twitter deal on Friday. (BBG)

  • The bid led Japan Industrial Partners to acquire Toshiba is likely to miss the lending deadline. (RT)

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