Fed Hikes Rates to 22 Year High

July 28, 2023

Good Morning,

  • Data showed the decline in China's industrial profits narrowed for the straight month in June, About 18% of Ryman's shareholders have voted against the re-election of interim chair Claire Higgins, and apparently the board of Fonterra, spends more time talking about geopolitical risks now than at any time in the recent past.

Let's jump in.

Before The Bell

Markets

  • Wall Street's main indexes surged on Thursday on hopes that the Federal Reserve's policy tightening was ending and the world's largest economy was heading for a soft landing, while Meta Platforms jumped on strong third-quarter revenue forecast (RT)

  • European shares snapped a six-day winning run on Wednesday, hurt by underwhelming results from French luxury goods giant LVMH as well as nerves ahead of the Federal Reserve's interest rate decision later in the day (RT)

Earnings and Data

  • Data showed the decline in China's industrial profits narrowed for the straight month in June, offering some respite to investors concerned about slowing growth in the world's second-largest economy (RTT)

  • Transport heavyweight Mainfreight has outlined the difficult trading conditions and a broad drop in performance at its annual meeting this afternoon. Overall group revenue down 19%. In the transport category, revenue was flat at $538 million, warehousing revenue rose 15% to about $200m, while air and ocean revenue dropped just over 40% to $451m. (NBR)

  • Investment bank Jarden logged $71 million in firm-wide revenue for its first quarter, a sharp turnaround from March, when expenses weighed on the New Zealand-headquartered firm (AFR)

  • European commercial real estate transactions plunged 58% in the second quarter as rising rates upended the continent’s property markets (BBG)

News Summary

  • The blinding rise of generative AI technology has changed everything. It’s opened up a whole new world for New Zealand consumers and businesses (Stuff)

  • The board of retirement village company Ryman Healthcare fronted shareholders in a marathon annual meeting on Thursday where they faced questions over the level of disclosure, returns, costs and the resumption of dividends (Stuff)

  • Cancer diagnostic company Pacific Edge says it expects to manage cash reserves, in the event of an adverse Medicare coverage decision, until it regains coverage – a process that could take four years (NBR)

  • The board of one of New Zealand’s largest exporters, Fonterra, spends more time talking about geopolitical risks now than at any time in the recent past, an executive of the company told an Auckland conference yesterday (NBR)

  • About 18% of Ryman's shareholders have voted against the re-election of interim chair Claire Higgins to the board for another 18 months (NBR)

  • BHP Australia boss Geraldine Slattery warned that the Albanese government’s “same job, same pay” rules for labour hire threaten the country’s ability to exploit critical minerals for the energy transition and could deliver a $US2 billion ($2.94 billion) blow to the miner’s copper plans (AFR)

  • Financial services customers are getting angry as cost-of-living pressures bubble over, triggering a record number of complaints with the Australian Financial Complaints Authority over the past year (AFR)

  • NSW Treasurer Daniel Mookhey says higher taxes on the state’s coal industry will have only a “negligible” risk of increasing power prices, as the Minns government considers whether to follow Queensland’s lead and increase coal royalties (AFR)

  • Macquarie will consider PwC’s culture and reputation issues as it reviews whether to change its long-time auditor, the company has told shareholders (AFR)

  • Fortescue Metals expects to set a fifth consecutive iron-ore export record in the year ahead, after beating analysts’ estimates and delivering to the top end of its target for the year to June 30 (AFR)

  • China has jailed the former Communist Party boss of Hangzhou, the eastern city that’s home to Ant Group Co. and Alibaba Group Holding Ltd., for life after finding that he took some $25 million in bribes over his career (BBG)

  • Swiss drugmaker Roche needs to have better drug development projects in advanced stages to bolster its battered stock market value, its finance chief said on Thursday (RT)

Deal Flow

Investments / M&A

  • State Super, Australian Retirement Trust and The Infrastructure Fund own some 40 per cent of QAL – the owner of airports at Gold Coast, Townsville, Mount Isa and Longreach – and have Barrenjoey on board for advice. Sources said the two superannuation funds wanted to exit in full, while TIF was keen for a partial sell down (AFR)

  • Strike Energy has reignited its buyout bid for Talon Energy in what shapes up as the latest round of consolidation of onshore gas assets in the Perth Basin (AFR)

  • Czech tycoon Daniel Kretinsky and Spanish infrastructure investor Asterion Industrial Partners are the last remaining bidders for German utility Steag, according to people familiar with the matter (BBG)

  • Nissan Motor Co. has finalized plans to invest in Renault SA’s electric-vehicle venture Ampere, capping months of negotiations to rebalance the troubled automotive alliance. The Japanese carmaker will invest as much as €600 million ($663 million) in the business (BBG)

  • Global Auto Holdings said on Thursday it had raised its cash buyout offer for Lookers by 10 pence to 130 pence per share, valuing the British car dealership at 504.2 million pounds ($654.15 million) (RT)

  • The private equity owners of popular emergency contraception pill Plan B, Foundation Consumer Healthcare, have hired advisors to explore options including a potential sale of the company (RT)

  • India's Mahindra & Mahindra picks up 3.53% stake in RBL Bank for $51 million (RT)

  • PacWest Bancorp's shares jumped nearly 29% on Wednesday, as investors cheered Banc of California's $1.1 billion deal for the lender that has been under pressure since the banking crisis earlier this year (RT)

VC & Fundraising

  • Queensland-headquartered telco Pivotel, which specialises in servicing customers outside the catchment of regular mobile phone coverage, has drafted boutique corporate advisor TMT Partners to oversee a capital partner search (AFR)

  • NB Capital Solutions, a unit of Neuberger Berman that finances companies owned by private equity firms, raised about $2.5 billion for a fund, around $1 billion more than its initial target (BBG)

Equity Raises

  • High-vis demand has Quadrant’s Jaybro building for an IPO (AFR)

  • Guangdong Ubridge New Material Technology Co., a refiner of minerals including titanium and zirconium, is considering a Hong Kong initial public offering that could raise about $300 million, according to people familiar with the matter (BBG)

  • Surf Air Mobility Inc. shares were issued a reference price of $20 by the New York Stock Exchange to guide investors when the stock starts trading Thursday in the first significant direct listing in almost two years (BBG)

  • How Jack Ma’s Ant Group Is Inching Toward IPO Reboot (BBG)

Daily Picks

  • The Matildas have slumped to a disastrous 3-2 loss to Nigeria and will likely have to beat Canada without Sam Kerr to avoid a group stage exit at their home Women’s World Cup (AFR)

Job Board

New Zealand

  • ASB rural banking graduate - Apply here

  • Waterman Capital investment analyst - Apply here

Australia

  • Citadel Securities graduate and intern roles - Apply here

  • Goldman Sachs Investment Banking Intern - Apply here

  • IMC graduate and intern roles - Apply here

  • Jarden

    • Graduate role - Apply here

    • Summer internships - Apply here

  • Macquarie graduate roles - Apply here

  • Optiver

    • Graduate role - Apply here

    • Internships - Apply here

The Daily Deck is sponsored by Industrial Equity, LLC

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