NZ & Aus
Consumer credit: Centrix data suggests that arrears and business liquidations are returning to pre-pandemic levels. The company’s latest monthly report shows 426,000 people in arrears in July from 414,000 the month before. That represents 11.7% of active consumer borrowers, the highest in four months, but also heading to levels of four years ago. > End of consumer savings + Covid stimmy…reversion to 4 years ago…
Sky City: Facing a 10-day suspension of casino license by Internal Affairs pursuant to section 144(a) of the New Zealand Gambling Act 2003 (Act) and follows a complaint made in February 2022 to the Department by a former customer who gambled at the SkyCity Auckland casino over the period from August 2017 to February 2021, alleging violations of host responsibility. Stock down +9% on the news — we expect could be a +$7-10mn hit to revenue if it occurs — follows the regulators in Aus cracking down on Crown + SkyCity’s Adelaide casino. Wait and see…we think stock is probably oversold…
Conviction list: In order of preference: IFT, SCL, NZX, THL. A lot of value has been recognised in THL already following a good result, but we still like it for the tourism thematic. International equivalent — Booking.com (BKNG). Scales still has value to be recognised while IFT remains are “hold forever” stock.
Conviction list Aus: In order of preference: DGL, CSL, MQG. DGL still trades at 4x EBITDA — we are looking for Henry to pay down some debt from his buying spree…CSL remains a good co, while MQG is a “no brainer”.
US
Little news – labour day over there. Noting the British tabloids are reporting the Glazers may not sell Manchester United — this has become a strange situation, and frankly we don’t know the answer — if it happens, it happens; if it doesn’t, it’s likely still a high quality asset that will be sold later. A “wait until the fat lady sings” situation.
Links
Rest in peace to Jimmy Buffett (not W.E) — our favourite article about retirement the Margaritaville Way. (“At the active-living community for Jimmy Buffett enthusiasts, it’s five o’clock everywhere.”)
Good piece on the man behind the UBS-Suisse merger, Colm Kelleher. (“How the UBS chair came to oversee the most complicated bank merger in history”) WSJ – The Real Story of Musk’s Twitter Takeover (“Walter Isaacson offers a behind-the-scenes look at one of the most surprising and controversial decisions of the mogul’s career.)
Week Ahead
Monday
Australia: ANZ Job Ads.
Tuesday
US: Durable Goods Orders, Factory Orders; Eurozone: PPI, HCOB Composite PMI; China: Caixin PMI Composite; Australia: RBA Cash Rate Target, Current Account Balance.
Wednesday
US: ISM Services Index, Fed Beige Book, Trade Balance; Eurozone: Retail Sales; Australia: Q2 GDP.
Thursday
US: Initial Jobless Claims; Eurozone: CPI, Unemployment Rate; Eurozone: Q2 GDP, Employment; China: Trade Balance; Australia: Trade Balance.
Friday
US: Consumer Credit; Australia: Nickel Industries EGM.
Saturday
China: CPI/PPI, New Yuan Loans.
