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February 22, 2023

Good Morning,

The aftermath of Cyclone Gabrielle sees searches for bodies in Napier called off due to sewage leak, President Joe Biden arrived in Ukraine for the one year anniversary since Russia invaded Ukraine, Sky TV may cut 170 NZ jobs in outsourcing move, The Supreme Court of the United States is set to hear two cases that could significantly reshape online speech and content moderation this week and the UK government runs a surprise budget surplus in January as cost of living crisis continues to hit households

Let's jump in.

Before The Bell

Markets

  • Here, the NZX 50 closed at 11,801.49, a 0.8% decline today.

  • The pan-European Stoxx 600 index moved between slight losses and gains throughout the session. It closed up 0.1% (CNBC)

  • In Australia, the S&P/ASX 200 closed 0.21% lower at 7,336.3

  • The Reserve Bank, in spite of Cyclone Gabrielle is expected to lift the official cash rate by half a percentage point to 4.75 percent tomorrow (Herald)

  • Dow Jones Industrial Average futures dipped 111 points, or 0.33%. S&P 500 futures also dipped 0.37%, and Nasdaq-100 futures pulled back by 0.3%. U.S. markets were closed Monday due to the Presidents Day holiday.

Earnings and Data

  • Power company Mercury NZ has declared an increased interim dividend after a half-year of record Lake Taupo inflows. Net profit for the half was $230 million from revenue of $1.3 billion. Earnings before interest, tax, depreciation, amortisation and financial instruments were $451m, up from $242m in the same period a year earlier (NBR)

  • BHP Group, trading at $1.273, announced a revenue of $25.71B (-15.8% Y/Y), a net operating cash flow of US$6.8 billion and free cash flow of US$3.5 billion (SA)

  • Australia's No. 2 grocer Coles Group Ltd said first-half profit beat analysts' forecasts as reduced pandemic-related spending offset inflation, but it warned rising wages and energy bills continue to push up costs, sending its shares lower. Profit from continuing operations jumped 11.4% to A$616 million in the six months to end-December, just ahead of analyst forecasts (RT)

News Summary

  • Prime Minister Chris Hipkins has announced the lead ministers to coordinate recovery efforts at the local level following Cyclone Gabrielle (Stuff)

  • The US will back Ukraine in its fight against Russia for "as long as it takes", US President Joe Biden has said on an unannounced visit to Kyiv. "We have every confidence you're going to continue to prevail," he said (BBC)

  • Economists say the Reserve Bank is likely to increase the official cash rate on Wednesday, even though many households and businesses are struggling with the impact of Cyclone Gabrielle (Stuff)

  • A magnitude 6.3 aftershock struck southern Turkey Monday, killing at least three people and injuring hundreds more, according to Turkish and Syrian officials, two weeks after a massive earthquake killed tens of thousands of people in both countries (CNN)

  • A new online shopping platform linked to one of China’s top retailers has quickly become the most downloaded app in the United States, surpassing Amazon and Walmart. Now it’s looking to capitalize from an appearance on America’s biggest stage (CNN)

Deal Flow

Investments / M&A

  • BGH Capital and Sixth Street’s $NZ1.34 bid for dual listed Church payments business Pushpay has won support from two proxy advisers ahead of the March 3 scheme vote, but it should be a tough fight as the target’s second-largest shareholder preps a no bid (AFR)

  • From advising on takeovers of historic clubs, to providing funding for top leagues, the likes of Goldman Sachs Group Inc. and JPMorgan Chase & Co. are discovering European football to be a lucrative source of revenue at a time when broader mergers and acquisitions activity is slowing (BBG)

  • KKR’s Alludo and Potential Capital are shaping up for a final fight at ASX-listed Nitro Software, with a six-month battle due to come to a head in coming days. Alludo went unconditional on its $2.15 a share takeover offer on Tuesday morning, effectively locking in its 13 per cent stake (AFR)

  • Microsoft President Brad Smith will on Tuesday seek to convince EU antitrust regulators at a closed hearing that the U.S. software giant's $69 billion bid for "Call of Duty" maker Activision Blizzard will boost competition (RT)

VC & Fundraising

  • Bill Qian, who oversaw venture capital investments and acquisitions at Binance Holdings Ltd., is seeking more than $100 million for a crypto VC fund (BBG)

Debt

  • Egypt started the sale of its first Islamic debt as the North African nation wrestles with a foreign-currency crunch. The three-year dollar sukuk is expected to price on Tuesday, according to a term sheet seen by Bloomberg. It was offered at an initial yield of around 11.625% (BBG)

Daily Picks

  • Wall Street meets English football, a good idea? (BBG)

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