Pesky Inflation Means Uncertain Fed

October 17, 2022

Good Morning,

Jacinda Arden announced that additional trade sanctions on Russia would be released later this week, the Bank of England has doubled the maximum size of its bond buy-backs, Ruapehu Alpine Lifts has gone into voluntary administration, hundreds of thousands of kiwis face steep increases in their gas and electricity bills, farmers in New Zealand might be up for a tax bill based on how much their animals' burp and urinate, ASB economists have predicted house prices to fall 24%, the UK economy shrunk in August unexpectedly, the Bank of England has said the emergency bond-buying scheme would end this week, Kiwibank is set to increase its variable home loan rate to 7%, Ben Bell becomes New Zealand's youngest mayor, Belgium's central bank's chief believes its likely the ECB hikes rates above 3%, Hot US inflation causes markets to wipe out initial losses, France sends Germany gas for first time, Russia to move people from Kherson as Ukraine advances and National MP resigns from her portfolio amid conflict of interest issue.

Before The Bell

Markets

  • Markets were down in the US as some major banks posted lower earnings.

Earnings

  • Citigroup reported a 25% decrease in third quarter profits but topped revenue expectations (CNBC)

  • Wells Fargo shares were up 3% as bank tops expectations despite boosting loan loss reserves (CNBC)

  • Morgan Stanley reported a 30% fall in third quarter net income as the investment banking market dries up (FT)

  • JPMorgan Chase tops estimates as bank reaps more interest income than expected (CNBC)

News Summary

Monday

  • Jacinda Arden announced that additional trade sanctions on Russia would be released later this week. (Stuff)

  • Grocery suppliers to supermarkets in New Zealand have seen costs rise 9.2% YOY in September. (Stuff)

  • Australia is facing problems with almost $70B (AUD) worth of defence projects. (9 News)

  • The Bank of England has doubled the maximum size of its bond buy-backs. (RT)

  • Elon Musk has said Taiwan should become a special administrative zone of China. (BBC)

Tuesday

  • Ruapehu Alpine Lifts, which operates the Whakapapa and Tūroa skifields, has gone into voluntary administration. (Stuff)

  • The serious fraud office has dropped its investigation into the accounting scandal at Fuji Xerox NZ. (Herald)

  • Westpac has lifted its New Zealand home loan rates. (Stuff)

  • The Bank of England has warned of material risk to financial stability and made fresh emergency moves to stabilise the market. This includes buying more bonds. (BBC)

  • The UK courts have permitted US-based hedge funds Elliott Associates and Jane Street to sue the London Metal Exchange over cancelled nickel trades. (RT)

Wednesday

  • The Reserve Bank of New Zealand has recommended the removal of the housing order from its remit. (Stuff)

  • The skilled migrant and parent visas are opening up again in New Zealand. (Stuff)

  • The Bank of England has warned of tighter rules for crisis-hit pension funds using liability-driven investments. (RT)

  • US consumer inflation and spending expectations have declined. (CNBC)

Thursday

  • Ngāi Tahu invests $1.5 million NZD into the financial education platform Banqer (NBR)

  • Kiwibank set to increase its variable home loan rate to 7% (Stuff)

  • Deloitte vice chairman steps down after drunken tirade at Royal Ascot (AFR)

  • Global money market funds experienced $89 billion worth of inflows which is the largest weekly injection into cash for over two years (CNBC)

Friday

  • US inflation came in higher than expected at 8.2% sending the markets down initially (BBG)

  • NZ Law Society elects new president, Frazer Barton, a partner at Anderson Lloyd (NBR)

  • MPI commits $6.7 million to land-based salmon farm (NBR)

Weekend

  • Binance NZ keen for crypto specific regulation (NBR)

  • Outgoing Genesis CEO warns market on energy subsidy (NBR)

  • Waikato planners set sights on fast passenger rail to Auckland (Herald)

  • Biden brushes off risks of strong dollar (BBG)

  • Guardians of world economy told to buckle up as outlook dims (BBG)

  • Fed's Bullard leaves open possibility of larger December hike (BBG)

  • Crypto group lets hacker keep stolen $80 million AUD (AFR)

  • Credit Suisse prepares Swiss business sales to raise capital (AFR)

  • Rupert Murdoch explores reuniting Fox and NewsCorp

Deal Flow

Investments/ M&A

  • BGH Capital, an Australian PE firm, has resurrected talks to purchase church giving and donations businessPushpay Holdings with a new bid which is believed to value Pushpay at well above $1.2B (AUD). (AFR)

  • Edmond de Rothschild Heritage Wines, a French wine producer, has purchased the central Otago vineyard Akarua Estate. (Stuff)

  • PSG's Qatari Owner Qatar Sports Investments is buying a 22% stake in Portuguese football club, SC Braga, in a deal which values the club at $88m (USD). (BBG)

  • Indian-based multinational conglomerate Adani Group is in talks to buy debt-ladened conglomerate Jaiprakash Associates' cement business for $606m (USD). (RT)

  • Insight Partners, an investment firm, will acquire a stake in the $3.6B (USD) enterprise software development firm Aptean. (BBG)

  • California-based diagnostics firm Bio-Rad is in talks to merge with German testing company Qiagen in a deal that could be worth more than $10B (USD). (RT)

  • A conglomerate of European clean-tech entrepreneurs, including Porsche Ventures and the founder of Tesla's European operation, has acquired a controlling stake in Australia's largest Tesla battery installer Natural Solar. It is their first investment in their $100m (AUD) spending spree. (AFR)

  • Australian gambling company Tabcorp has acquired a 20% stake in social media player Dabble for $33m (AUD). (AFR)

  • Todd Boehly's Horizon Acquisition Corp II, a blank check company, is interested in merging with Flexjet,which offers subscription-based private jet services. The merger would value the SPAC at $3.1B (USD). (BBG)

  • Sequoia Capital and Binance have stood by their previous commitment to partially equity fund the Twitter deal. (TI)

  • Japan Industrial Partners is leading a consortium of bidders looking to buy Toshiba, a Japanese-based multinational conglomerate, for $19B (USD). (RT)

  • General Motors has said it will invest up to $69m (USD) and take an equity stake in Australian mining company Queensland Pacific Metals. (RT)

  • Volkswagen is closing in on a joint venture with Chinese autonomous driving startup Horizon Robotics. VW could invest as much as $1B (USD). (BBG)

  • Hydro-Quebec has agreed to buy New England power firm Great River Hydro and its 13 hydroelectric generating stations in a deal worth $2B (USD). (BBG)

  • UDC looks to scale up by acquiring $213 million worth of assets from European Financial Services, Euro Rate Finance and European Wholesale Finance (NBR)

  • Volts Wagon nears a joint venture deal with start up Horizon Robotics Inc (BBG)

  • Dish Network in talks with Ergen-Backed SPAC for Wireless Merger (BBG)

  • Vista Equity to pay $4.6 billion USD for software firm KnowBe4 (BBG)

  • US grocer Kroger in talks to merge with rival Albertsons (AFR)

VC

  • India's Gautam Adani is in talks with Singapore's sovereign wealth fund GIC Pte and Temasek Holdings to raise $10B (USD) to fund the group's expansion into clean energy and ports. (BBG)

  • 8090, a VC firm founded by 27-year-old Jasper Lau, is raising money from the world's Mega-Rich families. (BBG)

  • Tencent-backed payment platform startup Airwallex has raised $100m (USD) in an extension on its series E funding round at a $5.5B (USD) valuation. (BBG)

  • Delta Air Lines has invested $60m (USD) in air taxi startup Joby Aviation for a 2% equity stake with the potential for up to $200m (USD) in the future. The partnership will initially offer passengers air taxi transport to and from the airports in New York and Los Angeles. (RT)

  • Livestock management software company AgriWebb has raised $10m (AUD) and pushed its next major capital raise due to the tight funding environment. (AFR)

  • Wellington-based Peoples Coffee will launch a $1.5m (NZD) capital raise on Friday via PledgeMe, with the minimum investment being $250 (NZD). (NBR)

  • SunDrive, an Australian solar disputer, has won over Malcolm Turnbull and Cameron Adams, who have joined Mike Cannon-Brookes and government innovation funds on SunDrive's share register after a $21m funding round closed. (AFR)

  • T-Shirt Ventures, a national disability health insurance scheme startup, has raised an $11m (AUD) Series A, which was taken out by health, education and lifestyle investment firm HEAL Partners. (AFR)

  • Continue AI raises $5.7m seed round with their goals set high to become the largest sustainability platform throughout the world (BW)

  • Resonance is a new $150m VC fund based in Paris which is fully backed by Otium Capital (TC)

  • Metalenz raises $30m worth of funding to expand its 3D ultra-small imaging tech (TC)

  • Skydance Media announces $400 million USD funding round led by KKR (BW)

  • IT services provider FPT invests in Japanese consulting business LTS (BW)

Equity Raises

  • GME Resources, a WA nickel and cobalt exploration and development company, is seeking $3m (AUD) via a share placement at a 17.4% discount. (AFR)

  • Magrabi Medical Group, a leading optical retailer & operator of eye clinics in the Middle East, is considering an IPO for its hospital business on the Saudi stock exchange as soon as next year. The IPO could raise as much as $200m (USD). (BBG)

  • Riyadh Cables, a manufacturer and exporter of power and telecommunications cables, is planning to raise $400m (USD) from a Saudi IPO. (BBG)

  • Conrad Asia Energy is trying to secure bids for its $45m (AUD) IPO by the end of the week. (AFR)

  • NIB is seeking to raise $150m (AUD), of which $135m (AUD) will be done via a share placement to institutional investors and $15m (AUD) via a share purchase plan. (AFR)

  • Japanese chip startup Socionext jumped 15% on its trading debut after completing Japan's biggest IPO of the year. (BBG)

  • Chip startup Socionext defies recent investor pessimism and raises $455m in Tokyo IPO (BBG)

  • Riyadh Cables Group looks to raise around $400m in Saudi IPO (BBG)

  • Perfect Communication to seek a valuation of up to $1 billion USD from a listing in Saudi Arabia (BBG)

Debt Raises

  • ANZ and the Commonwealth Bank of Australia have provided $120m (AUD) in funding for Pacific Equities Partners' new traffic management group Altus Group. (AFR)

  • The Commonwealth Bank of Australia is expected to launch a $750m (AUD) PERLS XIV capital notes that could raise as much as $1.5B (AUD). (AFR)

  • Carlyle's credit arm has invested ~$750m (USD) into the Citrix buyout split 50:50 between the secured debt portion and a preferred equity piece. They have also invested $750m (USD) in the second-lien debt backing the buyout of Nielsen Holdings. (BBG)

Reply

or to participate.