Auckland Enters State of Emergency

Good Morning,

A State of Emergency has been declared in Auckland after Flash flooding, houses swept away and evacuations, Elton John concert cancelled after torrential rain, Households under 'mounting pressure' as Westpac raises short-term mortgage rates, and ASB cuts $14 million in account fees ahead of posting its half-year profit next month.

Let's jump in.

Before The Bell

Markets

• Markets have moved sideways for the most part over the past 24 hours. The NZX 50 moved +0.1% higher to 12,036.05, the ASX 200 gained +0.3%, to 7,493.80, the S&P 500 moved +0.4% higher and the Nasdaq gained +0.6%. All major markets remain positive on the YTD. All 3 treasury bond yields saw increases, a change from the early part of the year, but remain down on the YTD

• Hong Kong Dollar Pessimists Stage a Comeback. Bearish bets on the Hong Kong dollar are gaining traction as a slump in local borrowing costs dulls the appeal of the currency versus the greenback (BBG)

• Superdry Plc shares plunged after the fashion retailer cut its profit outlook for the year, blaming its underperforming wholesale business and warning of potential consumer weakness in the months ahead (BBG)

• Shares of India's Adani Enterprises sank nearly 20% on Friday as a scathing report by a U.S. short seller triggered a rout in the conglomerate's listed firms, casting doubts on how investors will respond to the company's record $2.45 billion secondary sale (RT)

Earnings and Data

• Alaska Air Group Inc. (ALK) revealed a profit for its fourth quarter that increased from the same period last year but missed the Street estimates. The company's bottom line came in at $22 million, or $0.17 per share. This compares with $18 million, or $0.14 per share, in last year's fourth quarter (Nasdaq)

• American Airlines Group Inc.expects profit this year to exceed estimates following a slow start, as steady demand for air travel keeps an industry recovery going into 2023. Full-year adjusted earnings will be $2.50 to $3.50 a share, the Fort Worth, Texas-based carrier said in a statement Thursday that also detailed fourth-quarter results. Analysts had expected $1.89 on average, according to estimates compiled by Bloomberg (BBG)

• AXIS Capital Holdings Limited posted a fourth-quarter 2022 operating income of $1.95 per share, which beat the Zacks Consensus Estimate by about 14.7% and beat our estimate of $1.55. The bottom line dropped 8.5% year over year (Nasdaq)

News Summary

• A state of emergency is now in place for Auckland, following confusion over an "imminent" declaration from Mayor Wayne Brown (Stuff)

• 'Pandemonium': Elton John concert cancelled after torrential rain. The Elton John concert was cancelled less than half an hour before he was set to take to the stage as torrential rain wreaked havoc across Auckland (Stuff)

• Westpac has followed ASB's lead, and edged up its short-term home loan rates, while dropping its long-term rates. The move follows Stats NZ's revelation that inflation remained stubbornly high at 7.2%in the three months to the end of December (Stuff)

• ASB is removing monthly fees on its everyday personal and business accounts, which it says will mean customers pay $14 million less in fees this year. The bank has scheduled the end of monthly transaction account fees for February 1, two weeks before it is due to announce its results for the half year to December 31 (Stuff)

• Officials are working to arrange a meeting between Prime Minister Chris Hipkins and his Australian counterpart, Prime MInister Anthony Albanese, the Herald understands. The meeting could occur soon after Waitangi Day commemorations conclude (Herald)

• Hundreds of prison officers in western Sydney will begin strike action today over growing concerns for their safety. Early today the guards from Parklea Correctional Centre started 48 hours of industrial action and the striking officers will form a 90-minute picket line from 7.30am (9 News)

• Independent budget airline Bonza has started selling tickets for its maiden flights from the Sunshine Coast in Queensland next week. The low-cost carrier will launch its inaugural flight, to Proserpine, north Queensland, next Tuesday (9 News)

• Japan and the Netherlands are poised to join the US in limiting China’s access to advanced semiconductor machinery, forging a powerful alliance that will undercut Beijing’s ambitions to build its own domestic chip capabilities, according to people familiar with the negotiations (BBG)

Deal Flow

Investments / M&A

• British convenience store operator Bestway Group Ltd. has bought a 3.45% stake in J Sainsbury Plc and said it may look to buy more in a move that will prompt speculation about the future of the UK grocer (BBG)

• US investment firm MSP Sports Capital is considering a potential investment in England’s Everton Football Club, people with knowledge of the matter said (BBG)

• Australia and Germany have earmarked A$50 million ($35.5 million USD) and 50 million euros ($54.4 million USD), respectively, towards a joint initiative to establish a green hydrogen supply chain, Australian Minister for Climate Change and Energy Chris Bowen said on Friday (RT)

• Tyro Payments has given Potentia Capital four weeks of due diligence in hopes of a “significantly improved proposal”, six weeks after it shut talks with its two suitors. Tyro confirmed the revelation of renewed talks between the two parties, saying it wanted to see Potentia come out with a better offer and confirmation of its funding for the bid (AFR)

Equity Raises

• United Internet AG and Warburg Pincus said the initial public offering of Ionos Group will raise gross proceeds of as much as €543 million ($590 million) when the web hosting business lists in Frankfurt (BBG)

Debt

• TUI AG has picked banks to arrange a rights offering to help repay part of a German government bailout package, people familiar with the matter said (BBG)

Daily Picks

Auckland University academic Sir Peter Gluckman, who previously served as the Government’s chief science adviser, has given the planned merger of TVNZ and RNZ a fail (Stuff)

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