Bubbles in Foreign Waters

January 24, 2024

Good Morning,

New Zealand to send a six member team to defend shipping in the Red Sea, 21 soldiers killed in Gaza Strip, a Chinese warship off the coast of Japan ignores HMAS Toowoomba crews orders, mildly injuring Australian divers by turning on its sonar.

Let's jump in.

Before The Bell

Markets

  • NZX50 rises 1.0%, ASX 200 rises 0.5% on Tuesday. Bitcoin drops 2.9% falling back under $40,000 USD.

  • Inflation data this week is likely to come in much lower than the Reserve Bank predicted – but a lot of that is due to international factors, economists say. (Stuff)

  • Bond investors are cautioning that rate cut expectations are still a touch aggressive for 2024 even after traders have dialled back bets on the magnitude and timing of the first monetary easing by central banks. (AFR)

Earnings and Data

  • Employment confidence has edged higher, but people are mindful of the cost of living and job security. The Westpac-McDermott Miller Employment Confidence Index rose by 1.4 points to 99.7 in the December quarter. While higher, the index remained down from a peak of 115.2 in the 2022 September quarter. (NBR)

  • Power companies are cranking up their investment in new generation, with a survey by Concept Consulting showing commitments for renewable energy developments have almost doubled in the past 18 months. Results of the survey for the Electricity Authority showed 4979GWh of new generation in the pipeline for construction, up from 2600GWh in the previous July 2022 survey. (NBR)

News Summary

  • A Kiwi ex-pat who tortured his three-year-old son in Australia is set to be deported to New Zealand. (Stuff)

  • The Marlborough District Council has rejected the one offer it received on the old library building in Blenheim. (Stuff)

  • New Zealand is deploying a six-member NZ Defence Force team to protect shipping in the Red Sea. (Stuff)

  • Twenty-one soldiers were killed in the Gaza Strip in the deadliest attack on Israel's forces since the Oct. 7 Hamas raid that triggered the war, the military said Tuesday (local time), a major setback that could add to mounting calls for a cease-fire. (Stuff)

  • Hopes by locals that Woolworths might swoop in and announce plans to build a supermarket in Flaxmere have been dashed with the chain saying it had no plans to do so “at the moment”. (Stuff)

  • Zespri chief executive Dan Mathieson has stepped down to take up a position with US-based berry company Driscoll’s. (NBR)

  • The coalition government has dropped the Construction Sector Accord aimed at tackling systemic challenges in New Zealand’s construction sector. (NBR)

  • Small business advocates have called on the federal government to make parental leave payments directly to workers, ending costly administration for operators and helping wipe out superannuation “baby debt” facing mothers at retirement. (AFR)

  • A Chinese warship repeatedly ignored requests from the crew of HMAS Toowoomba to turn its sonar off and stay away, closing to within 1.4 kilometres of the immobilised Australian frigate before injuring divers. (AFR)

  • Billionaire Andrew Forrest’s private company has drawn up a policy wishlist to save the nickel industry, amid a warning from Swiss resources giant Glencore about the plight of the sector in Australia. (AFR)

Deal Flow

Investments / M&A

  • New Zealand-based Tourism Holdings (THL) has lined up a strategic acquisition of Camperagent RV Centre, a top Adelaide RV dealership, marking its expansion in the Australian market. (NBR)

  • In Australia over the last year, more than A$38 billion worth of mergers and acquisition deals were either cancelled or now seem very unlikely to complete because of regulatory concerns or shareholder pushback. (NBR)

  • Australian private equity firm Anchorage Capital Partners has pushed back against speculation it’s looking to acquire MediaWorks. (NBR)

  • Street Talk understands Global Power Generation Australia’s bankers at Morgan Stanley will formally launch a sale process this week, after meeting potential bidders over the past fortnight. The preparations were revealed by this column in December. (AFR)

  • Central West Pumped Hydro, a 2.6 gigawatt hours electricity generation project in NSW that wants to feed into the National Energy Market by 2027, is gearing up to bring in a new investor as it stares down a hefty construction bill. (AFR)

  • One of the founders of customer research start-up Dovetail, last valued at $960 million, has hit the road. (AFR)

  • Gilbert + Tobin has lured back two of its top M&A partners. Street Talk understands White & Case partners Chris Flynn and Nirangjan Nagarajah are headed back to their old shop. (AFR)

VC & Fundraising

  • Deep tech startup Marama Labs has raised €1.75 million ($3.1m) in an over-subscribed seed-plus round to help it scale up hardware manufacturing capacity in New Zealand for its patented CloudSpec spectroscopy instrumentation. (NBR)

  • Willow’s high-profile shareholder register has stumped up again, Street Talk can reveal. The property and infrastructure software start-up, which is backed by ex-Macquarie Group boss Nicholas Moore, raised over $US12 million ($18.2 million) of ordinary equity from existing shareholders in mid-January to strengthen its balance sheet. (AFR)

Daily Picks

  • Australian Open: Coco Gauff scraps her way into semi-finals. Read more here.

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