The next global investing megatrend: war stocks

Author

Maren Ishak
July 08, 2024

Good Morning,

The Daily Deck dives into today's financial news, highlighting a strong performance in the S&P 500 despite underperformance by small and mid-cap companies. European markets also rose as political concerns eased. Disappointing economic data from China dampened their stock market, while other news includes upcoming IPOs, earnings reports, and M&A activity.

Let’s jump in!

Before The Bell

Markets

  • While the S&P 500 reached new highs, growth stocks significantly outperformed value stocks by 4.15 percentage points, and small and mid-cap companies saw losses (TRP)

  • The pan-European STOXX Europe 600 Index closed up 1.01% as political concerns subsided in Europe (TRP)

  • Chinese stocks fell on disappointing manufacturing data that raised worries about the Chinese economy. The Shanghai Composite and CSI 300 indexes fell, while the Hang Seng Index in Hong Kong rose slightly (TRP)

Earnings & Data

  • A vast $90 trillion wealth transfer over the next 20 years will likely make millennials “the richest generation in history,” according to consultancy Knight Frank (CNBC)

  •  OSK Holdings Berhad Ticks All The Boxes When It Comes To Earnings Growth (Yahoo)

  • Nike shares plunge after retailer says quarterly sales will fall 10%, warns on China weakness (CNBC)

  • Lion New Zealand beer company takes $26m hit from ‘onerous’ contract (Herald)

  • Infratil announced an increase of A$466 million in the valuation of its 48.3%-owned data centre business CDC (NBR)

  • Samsung flags better-than-expected profit rise as AI boom lifts chip prices (RT)

  • Shell sees up to $2 Billion writedown after biofuels delay (BBG)

News Summary

Monday

  • 1 July changes that could affect your bank account (Stuff)

  • What is going on with Australia's vaping laws? (9 News)

  • Japan’s lonely deaths epidemic (Guardian)

Tuesday

  • Two young Māori are on a mission to raise $6000 to attend the World Indigenous Suicide Prevention conference in New York in July (1 News)

  • House prices need to fall at least another 16% to become anything like affordable, one forecaster says. (1 News)

  • Donald Trump's lawyers have asked for the former US president's conviction in his hush money criminal case to be set aside and his sentencing this month delayed, American media report. (BBC).

Wednesday

  • A Kiwi woman is reportedly dead after being run down following a robbery outside a California shopping mall as the attackers fled in a hail of bullets. (Herald)

  • Mandatory testing of primary school students for phonics will only provide a snapshot of where their learning is at, says an education expert. (RNZ)

  • China is far ahead of other countries in generative AI inventions like chatbots, filing six times more patents than its closest rival the United States, U.N. data showed on Wednesday. (RT)

Thursday

  • ‘No water equals no milk’: big dry, cold snap hit farmers (AFR)

  • Nvidia CEO Cashes in on Rally With $169 Million Share Sale (BBG)

  • Swiss price regulator puts UBS under observation (RT)

Friday

  • New targets set to mental health sector as $10m fund opens (RNZ)

  • Aussie Senate wants regulator ASIC split in two (NBR)

  • UK PM Sunak to resign as prime minister and Conservative leader (RT)

Weekend

  • Air New Zealand flight takes off for Shanghai. Nine hours later it lands back in Auckland (Stuff)

  • ASX to sit out global rally amid iron ore woes (AFR)

  • The next global investing megatrend: war stocks (AFR)

Deal Flow

Investments / M&A

Australia & New Zealand

  • $200m-a-year Opal HealthCare courts buyers; Morgan Stanley hired (AFR)

  • Street Talk understands MA Moelis Australia has been mandated to review options at Contract Resources which is slated to fetch a price of as much as $500 million. (AFR)

  • Fletcher Building’s Tradelink has attracted a big American turnaround specialist keen to extract operational efficiencies from the No.2 player in the trans-Tasman plumbing and bathroom supplies market. (AFR)

Key Global

  • Global merger and acquisition deals hit $1.5tn in the first half of 2024 as a surge in US takeovers and an uptick in megamergers offset a declining number of acquisitions. (FT).

  • Spirit Aero to be broken up as Boeing agrees $4.7 billion stock deal (RT)

  • BlackRock to buy UK data group Preqin for $USD 3.2 bln (RT)

Other Global

  • Indonesia's Delta Dunia eyes more deals as it completes US coal buy. (Reuters)

  • GSK buys COVID, influenza vaccines from retrenching CureVac (RT)

  • Private equity investor Direct Capital has reinvested in Bayley Corporation as the real estate group raised capital to fund its acquisition of a stake in its Australian counterpart McGrath. Filings on July 4 show Direct Capital was issued 1.06 mil shares for 17% of Bayley, two years after it sold out of a long-term holding (NBR)

  • Chief Executive Officer Benjamin Gliklich said he sees “an opportunity for incremental M&A” to build its advanced electronics business while holding onto its industrial and specialty chemicals operations. (BBG)

  • Liverpool Partners hires Macquarie Capital for Seisma sale (AFR)

  • Oaktree trading house squares off against shareholders for nickel mine (AFR)

  • Intesa Plans SRT Deals Tied to at Least €4.5 Billion of Loans (BBG)

  • Meta Set for EU Warning Over Ad-Free Instagram, Facebook (BBG)

  • Google buys stake in Taiwan solar power firm owned by BlackRock (RT)

  • GQG slashes tech exposure, here’s where it’s buying next (AFR)

  • French State Investment Firm Eyes Stake in Sanofi Consumer Unit (BBG)

  • UAE IT Services Firm Alpha Data Plans $200 Million Abu Dhabi IPO (BBG)

  • Eni, Equinor Deals in Nigeria Approved After Months of Delay (BBG)

  • Macy’s Investor Group Raises Buyout Offer Again, WSJ Reports (BBG)

VC & Fundraising

  • AI Startups Inject Some Life Into VC Dealmaking in the US. (BBG)

Equity Raises

Australia & New Zealand

  • Local comparables for IPO success Guzman y Gomez are few and far between, but the downward slide of Domino’s Pizza is a sobering reminder of just how tough it is in the fast food franchise market. (AFR)

Key Global

  • Hyundai Motor Co. could raise as much as $3.5 billion from the eagerly anticipated initial public offering of its Indian unit, people familiar with the matter said, easily making it the biggest to ever take place in the country. (BBG)

Other Global

  • IPO rush amid market rally boosts demand for independent directors. (WSJ)

  • Hong Kong shares boosted by Chinese property developers. (Financial Times)

Debt, Restructuring & Bankruptcy

  • Police were about $5m in debt when water coolers removed to save $11k per year. (Stuff)

  • Almost 1.8 million people are now in at least £50,000 of UK student debt, data obtained by BBC News reveals. (BBC)

The Daily Deck is sponsored by Industrial Equity, LLC

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