No more beer this summer?

January 11, 2023

Good Morning,

New Zealand breweries see CO2 rationing as shortage hits, supermarket giant Coles will extend its price freeze policy in Australia, China has opened the door to talks with Australia to begin resolving trade disputes, the Australian government will cap the carbon price at $75 (AUD), Goldman Sachs is expected to lay off 12 people from its Australian IB team, donors from around the world have pledged over $9B (USD) to Pakistan, Virgin Orbit Rocket Launch Fails & Amazon announced plans to shut three warehouses in the UK.

Let's jump in.

Before The Bell

Markets

  • The NZX 50 continued its green start to the year, climbing up marginally. The turnover was very light at $63.1m (NZD) (GR)

  • Australian shares are poised to open modestly lower, reversing earlier gains after two US policymakers reiterated their expectation for rates to peak above 5 per cent and to hold there for some time (AFR)

  • The USD slid to a 7-month low against the Euro

Earnings and Data

 Earnings and data from Tuesday: 

  • Total consumer credit (US) rose by $28B (USD) in November, down only slightly from the $29.1B (USD) gain in the prior month, the Federal Reserve said Monday. That translates into a 7.1% annual rate, down from a revised 7.4% gain in the prior month (WT)

  • Commercial Metals Company's (NYSE) earnings are as follows, net earnings were $261.8 million (USD), or $2.20 per diluted share, on net sales of $2.2 billion (USD), compared to the prior year period were net earnings were $232.9 million (USD), or $1.90 (USD) per diluted share, on net sales of $2.0 billion (USD) (CN)

  • Jefferies Financial Group (NYSE) reported a 52.5% decline in fourth-quarter profit on Monday, hit by lower underwriting fees and volatile markets that dented income from its trading desks (RT)

  • Summerset Group (NZX) reported sales for the three months to the end of December rose 18 per cent compared with the same quarter in 2021. The company had 277 settlements for the quarter to December 31: 139 new sales and 138 resales (Herald)

Earnings and data coming up this week:

  • Wednesday: Inflation & retail sales (AU), J Powell speaks, Albertsons Companies, Bed Bath and Beyond  

  • Thursday: Trade balances (AU), building consents (NZ), CPI & PPI (China), Infosys

  • Friday: CPI, unemployment claims & federal budget balance (US), trade balance (China), GDP (UK), Taiwan Semiconductor Manufacturing Company

  • Saturday: JP Morgan Chase, Bank of America, Wells Fargo, BlackRock, Citi, Delta Airlines

News Summary

  • There is 'One more day' of Cyclone Hale, and there are concerns for east coast rivers as rain continues weather (Stuff)

  • Vodafone New Zealand says its name change to One NZ is not threatened by the TVNZ trademark challenge (Stuff)

  • New Zealand breweries see CO2 rationing as shortage hits (RT)

  • Supermarket giant Coles will extend its price freeze policy in Australia, whilst Woolworths has confirmed it won't extend its price freeze (9 News)

  • China has opened the door to talks with Australia to begin resolving trade disputes (AFR)

  • Goldman Sachs is expected to lay off 12 people from its Australian IB team (AFR)

  • The Australian government will cap the carbon price at $75 (AUD) for big polluters. The cap will increase by CPI + 2% each year (AFR)

  • Till Payments has made 120 staff redundant and installed three new board members (AFR)

  • China has blocked South Korean and Japanese visas in retaliation for Covid restrictions on Chinese travellers (BBC)

  • Donors from around the world have pledged over $9B (USD) to Pakistan to help them recover from the devastating flood that hit the country last year (BBC)

  • Disney's boss has told employees they need to start going to the office four days a week from the start of March (BBC)

  • Virgin Orbit Rocket Launch Fails, Denting UK Space Ambitions (BBG)

  • Amazon announced plans to shut three warehouses in the UK, putting 1,200 jobs at risk (BBC)

Deal Flow

Investments / M&A

  • CVS Is Exploring a $10 Billion-Plus (USD) Acquisition of Oak Street Health (BBG)

  • Microsoft is mulling a $10B (USD) investment in OpenAI, the creator of the viral AI bot ChatGPT (BBG)

  • Voyager Therapeutics, a Nasdaq-listed biotech, could get up to $4.4B (USD) for an agreement with Neurocrine Biosciences, a Nasdaq-listed biopharmaceutical company (BBG)

  • Frontline Plc, a global shipping giant controlled by billionaire John Fredriksen, has given up on plans to buy Euronav NV. The $4.2B (USD) deal would have created the world's largest publicly listed oil-tanker company but was scrapped after resistance from some of Belgium's oldest shipping families (BBG)

  • Vista Equity Partners agreed to pay about $2.6 billion (USD) in cash for insurance technology provider Duck Creek Technologies Inc (BGG)

  • Russia's second-largest oil producer Lukoil has reached an agreement to sell its ISAB oil refinery in Sicily to Israeli-backed PE fund G.O.I Energy for $1.6B (USD), which has formed a partnership with international commodities trader Trafigura (RT)

  • Nuvei Corp, a Canadian payments firm, has agreed to buy Paya Holdings, an Atlanta-based payments processor, for $1.3B (USD)

  • Full-service Canadian headquarter investment bank Canaccord Genuity Group's management is looking to take the firm private in a $1.22B (AUD) deal (AFR)

  • Gas explorer Norwest Energy has rejected a takeover offer from MinRes that would have seen them granted one MinRes share for every 1367 Norwest shares held, valuing the stock at about 6¢ a share (AFR)

  • English Premier League clubs Manchester United, Tottenham Hotspur, or Liverpool FC are being targeted by Qatar Sports Investments over a potential acquisition (RT)

  • Teneo, the global public relations and consulting firm backed by CVC Capital Partners, is nearing a deal to acquire UK competitor Tulchan Communications (BBG)

  • Goldman Sachs has suspended sell-side research on REITS listed in Australia and New Zealand as well as big listed property business as one analyst leaves the firm and another analyst shifts into a new role (AFR)

VC & Fundraising

  • Khosla Ventures, a US VC fund, is raising nearly $3B (USD) in new funds (AX)

  • ChrysCapital has raised $1.4B (USD), making it the largest-ever Indian PE fund (CQ)

  • Monogram Health, an in-home care provider, raised $375m (USD) in new funding from investors, including CVS Health, Cigna Ventures & TPG Capital (PRN)

  • Superannuation fund HESTA has committed $200m (USD) to its 12-year-old sustainable focused PE investment programme with Stafford Capital Partners (AFR)

Equity Raises

  • Tesla's Vietnam rival VinFast is considering launching a US IPO offering that could raise as much as $1B (USD) as soon as Q2 this year (BBG)

  • Hesai Technology, a Chinese developer of sensor technology used in self-driving cars, is planning to file for an IPO offering in the US that could raise about $150m (USD) (BBG)

  • British PM Rishi Sunak has revived talks with Japan's SoftBank Group regarding a London listing for chip designer Arm (RT)

Debt

  • Top Japanese banks are targeting the end of the month to issue commitment letters for a $10.6B (USD) loan that backs the takeover offer by a consortium led by Japan Industrial Partners for Toshiba Corp (BBG)

Daily Picks

  • Morgan Stanley followed Goldman Sachs Group Inc. in ramping up bullish bets on Chinese assets as the swift dismantling of Covid Zero policies boosts the nation’s growth outlook (BBG) ...... Time to go into China, then?

  • New Jersey and Ohio joined other states in banning TikTok from state devices (RT)

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