Chinese Market Mayhem

November 29, 2022

Good Morning,

China protests spread to multiple cities as anger builds against zero-COVID policy, and Chinese markets slide as these protests put investors on edge, oil prices plunge to the lowest level since December 2021 and Ukraine warns of more Russian attacks as fighting rages on.

Let's jump in.

Before The Bell

Markets

  • ASX falls 0.4 per cent amid China protests and COVID-19 outbreak (AFR)

  • Commodities sank as China's COVID-19 outbreak worsened and a series of stunning street protests threaten to derail economic activity and sap demand for energy, food and raw materials (AFR)

  • Gabriel Wildau, managing director at Teneo Holdings LLC in New York states, "Markets will respond negatively to the widespread protests and rising case numbers, which are likely to trigger new supply-chain disruptions and dampen consumption demand". (BBG)

  • Since the U.S. Federal Reserve's latest meeting, investors have parsed a bevy of economic data that somewhat eased inflation concerns, further strengthening the case for smaller interest rate hikes. (BBG)

  • UBS has added another 0.25 percentage point rate rise to its Reserve Bank forecast, meaning the broker now expects the Australian cash rate to peak at 3.35 per cent. (AFR)

Earnings and Data

  • Kiwi Property Group Ltd, one of New Zealand's biggest listed landlords declares a $151.1 million NZD net loss in its latest half year, while rental income rose by 6 per cent. (NZH)

  • Third Age Health Services, a primary care provider has reported a general practice revenue of $1.8 million NZD during the first half of this financial year, up 304.3% on pcp and 137.0% against the 6-month period ended 31 March 2022. (NZ Doctor)

  • Task Group, a mobile engagement software company, formerly known as Plexure told the markets this morning it now expects revenue for the full year of between $59 million and $62 million NZD. (NBR)

  • Eftpos terminal and payments provider Smartpay has posted a net profit of $2.7 million NZD for the six months to the end of September, up from $400,000 in the prior corresponding half. (NBR)

News Summary

  • Over the weekend people gathered in Chinese capital Beijing and Shanghai, angry at President Xi Jinping's zero-Covid approach. Some called for Xi to resign. (BBC)

  • Police used water cannons and tear gas to deal with unrest in the centre of Brussels on Sunday following Morocco's 2-0 World Cup win over Belgium in Qatar. (BBC)

  • Early Black Friday results show higher traffic in stores and deeper promotions across the U.S. Deep discounts lured shoppers seeking a reprieve from stubborn inflation. (BBG)

  • The latest MLIV Pulse survey concludes stagflation is the key risk for the global economy in 2023. (BBG)

  • The Government will pay $4000 to every small shop and dairy wanting to install fog cannons, following the death of worker Janak Patel. (Stuff)

Deal Flow

Investments/ M&A

  • Marine and campervan equipment retailer Burnsco will shift to Australian ownership after its Macleod family shareholders agreed to sell the business to Jaycar Electronics Group. (NBR)

  • Mexico's Banca Mifel has lined up investors including Apollo Global Management and the Abu Dhabi Investment Authority to fund a bid for Citigroup Inc's Mexican retail bank. (RT)

VC & Fundraising

  • IT services outfit Atturra Limited was rounding up investors for a $25 million AUD raise before the market open on Monday, telling them it would use the proceeds for acquisitions. The acquisitions were not named but investors were told together they would add $55 million to $65 million AUD in revenue to Atturra's bottom line. (AFR)

Equity Raises

  • Microcap Pilot Energy was rattling the tin for $1.7 million AUD to advance its Cliff Head carbon capture and storage project. The placement was priced at 1.5 cents per share, a 12 per cent discount to the last close. (AFR)

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