NZ
Channel Infrastructure (CHI) has entered into an agreement with Seadra Energy Inc (SE), a US-based company, regarding the sale of its decommissioned refinery assets. Under the terms of the agreement, SE will pay a fee of US$4 million for a 6-month option to purchase specific hydrocracking and related assets for US$33.875 million. The option can be extended for an additional 6 months by paying a fee of US$0.5 million.
Continue to rate CHI as a BUY as the operator becomes a pure-play “toll booth” for fuel imports.
Napier Port Q3 trade volume data highlighted containerised cargo volume declined by 10% and bulk cargo volume fell by 16.4%. The fall was more pronounced for the third quarter with containerised cargo volume reducing by 31.6% and bulk cargo volume reducing by 28.6%.Read thru > less imports, less exports > slowing demand in the freight industry (we’ve seen the same with Mainfreight).
Australia
The Australian market (ASX200, -0.5%) fell for a fourth day in a row as all sectors except for tech finished in red.
Weak economic data from China weighed on investors’ sentiment as concerns of a post covid rebound appear bleak – as inflation remained flat. The news greatly impacting the mining sector. It is reported that InvoCare’s shareholders will have to wait a little longer for PE suitor, TPG Capital, to firm up its $13.00 per share bid after due diligence timed out on Monday – asking for a short extension to present to investors.
US
The US market (S&P500, +0.2%) was up, ending a three-day losing streak as markets await key inflation report on Wednesday which could dictate the Fed’s upcoming interest rate decision.
Last week, the S&P 500 pulled back 1.16%, despite nonfarm payrolls growing less than expected in June, slightly stronger-than-expected wage growth raised concern over the potential for more Federal Reserve rate hikes.
Economists expect a weak inflation print for the month of June to come in at 3.8% its lowest level since April of 2021, from 4.1% in May – which spark optimism rates could hold flat from here. We’d want to see 2-3 months of below 4% inflation to suggest inflation is coming under control and on a path to 2.3% target. Warren Buffett still sees value in fossil fuels, with Berkshire Hathaway agreeing to a $3.3bn deal to acquire Dominion Energy’s 50% share in a liquefied natural gas terminal. The world is still heavily reliant on fossil fuels for at least another decade, green energy needs a lot more work before we have a significant transition, and lower our dependence on fossil fuels.