31 Mar 2023
Investors move on from banking fears
Markets
- Local and global equity markets moved higher this week as investors put banking fears behind them and looked to the next move by the US central bank.
- Aged care operator Estia Health has received a takeover offer from private equity group Bain Capital for $3 per share, or $775 million, a 28% premium to the traded price before the announcement.
- Bank of Queensland announced that its current executive chair would take the role of Managing Director and CEO until December 2024, following the sudden departure of George Frazis in November 2022.
- Premier Investments beat expectations by growing sales 17.6% in the half-year to January 28, with the company claiming strong execution helped deliver the result. Sales and earnings were ahead of expectations.
- The Australian Clinical Labs proposed takeover of their bigger competitor Healius hit a hurdle after Healius’ two major shareholders announced they were not in favour of the $1.5 billion merger of equals.
- The Brookfield Asset Management-led consortium has agreed to a $18.7 billion deal to acquire Origin Energy. Brookfield plans to invest to decarbonise Origin’s large utility and generation business.
- United Malt Group shares soared after the company announced it had opened its books to Malteries Soufflet, the world’s second biggest commercial maltster, who made a takeover offer for $5 a share, or $1.5 billion.
- The oil price rose strongly as oil supply from Iraq’s Kurdistan region came to a halt after a pipeline closure and US inventories fell to a two-year low.
Economics
- Australian retail trade rose by a small 0.2% in February 2023, in line with expectations, with annual growth now at 6.4%. Since the peak in November 2022, retail trade is down by 2%.
- Australian inflation rose by 0.6% in February which resulted in the annual rate falling to 6.8%, well below estimates for a 7.2% annual rate. The second month in a row that inflation came in below estimates. The move lower might buy the RBA some breathing room, but still a long way to go to get inflation under control.
- Australian job ads fell by 1.5% for the three months to February but remain at a very high level. Vacancies rose in professional services, health, and education, whilst vacancies fell sharply in retail. Supply of labour has shifted due to higher participation rate and return of overseas migration.
- The US economy grew by 2.6% in the year to December 2022, coming in slightly below expectations, whilst US durable goods orders fell by 1% in February and consumer confidence rose in March.
- A US manufacturing index rose in March coming in above expectations, whilst a services index rose also coming in above expectations.
- A key US home price index fell 0.6% in January coming in a little better than expectations. US pending home sales rose by 0.8% in February also coming in well above expectations.
- A German business climate index rose in March, coming in ahead of expectations.
- German consumer prices eased from 9.3% annually to 7.8% in March, coming in above expectations.
- Prices in UK stores rose at the highest rate on record this month with shop price inflation accelerating to 8.9% from 8.4% in February. Food price increases hit 15%.
Politics
- Federal Labor and the Greens reached agreement that would restrict new coal and gas projects. The deal stops short of an outright ban but will make future approvals much more difficult.
- The NSW Labor party has soared to victory needing just one more seat to secure an absolute majority, making Chris Minns the new state leader, with a more than 6% swing against the ruling Liberal coalition.
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