Australia

Stimulus blunder Down Under sends Big Data alert

25 May 2020

Australia overfunded an $85 bln wage subsidy programme due to excessively pessimistic epidemic models and data entry errors. Canberra thought 6.5 mln workers needed help, nearly twice the real number. Others will find it similarly difficult to cut through the noise.

Sino-Australian DNA sequenced by virus-test deal

11 May 2020

Fortescue’s chairman helped broker a controversial Canberra purchase of 10 mln Covid-19 kits from Chinese genomics giant BGI. It adds to diplomatic tensions over Huawei and the pandemic’s origins. And yet over $150 bln of bilateral trade probably will endure, and maybe even grow.

Corona Capital: SPAC reversal, Italy, Toilet paper

8 May 2020

Concise views on the pandemic’s corporate and financial fallout: Dan Loeb’s blank-check company tries to nix a deal; Italians warily get back to work; Australian TP panic subsides.

Cards played well in three-handed casino deal

29 April 2020

Blackstone is buying 10% of Australia’s Crown Resorts from Lawrence Ho’s Melco. The buyout shop antes up at a discount while the Macau operator sensibly folds a busted bet. And amid a crisis, Crown gets staked by a shrewd backer. It may take time, though, for the pot to grow.

Australia Inc reruns its crisis capital playbook

27 April 2020

Lender NAB will raise $2.2 bln in the biggest local equity issuance since the pandemic began. Just as in 2008, the country is weathering the disruption better than most. Companies Down Under are shrewdly restocking coffers, but often at the expense of retail investors.

Virgin Australia could struggle to regain altitude

21 April 2020

The carrier has gone into administration with over $3 bln of debt after a bailout failed to materialise. Australia is loath to leave Qantas a monopoly, which should help spur a solution, maybe with local pension funds. Remaking Virgin into a success is a different story, though.

Spurned Caltex can do some refining on its own

21 April 2020

Canada’s Couche-Tard abandoned its $5.5 bln plan to buy and break up the petrol station operator because of the pandemic. The Australian company’s mooted property spinoff looks like a poor consolation prize. It would make more sense just to proceed with the suitor’s blueprint.

Bad news could travel fast for Facebook and Google

20 April 2020

Australia is forcing the tech goliaths to share revenue with local media. The virus was the last straw after years of digital destruction and fake news scandals. Whatever the financial formula, the costs should be bearable. The trouble is that Canberra headlines will go global.

Treasury Wine’s posh-plonk split calls for a toast

9 April 2020

The $5 bln Australian winemaker could spin off its prized Penfolds business. That should deliver a higher valuation for the upmarket label and separate it from a ragbag of other brands that need restructuring. A coronavirus-induced glut of luxury grapes will eventually help, too.

M&A protectionists get even stronger cover

1 April 2020

All foreign takeover bids will now be subject to review in Australia, shielding local companies from a recovering China and beyond. As anti-globalisation rises, other countries might retrench similarly. That could make it harder for the capital-hungry and encourage oligopolies.

Australia fuels global race to flatten jobs curve

1 April 2020

Prime Minister Scott Morrison proposes spending some $80 bln subsidising wages for six months. That would cover about 70% of median pay for most and equal 6.5% of GDP. Increasingly generous pandemic stimulus measures in one country ultimately could help workers in another.

World will be ready for some 2021 Olympic spirit

24 March 2020

It’s likely the Summer Games won’t go on as planned in Tokyo. Cancelling would be a defeat, but rescheduling for next year a symbol of resilience. By then, an economic recovery should hopefully be under way and global audiences will be drawn more than ever to the Olympic flame.

Covid-19 monetary placebos start Down Under

3 March 2020

Australia’s central bank cut rates to a record low 0.5%, becoming the first in the developed world to trim post-outbreak. Others are expected to follow in some coordinated fashion. Any effects will be marginal or misplaced. Governments are better placed to deliver support.

BHP’s best-laid plans may go awry for new boss

18 February 2020

The mining giant delivered a 39% rise in half-year profit, giving a running start to CEO Mike Henry. Since assuming the role on Jan. 1, virus-hit China has threatened iron ore demand. A strategic focus on investing in growth and returning capital to shareholders could be on hold.

Aussie Caltex should fill up with Canadian cash

13 February 2020

Petrol station operator Couche-Tard has sweetened a bid for its peer Down Under to $5.9 bln. While only a 2% top-up, the alternatives are looking less appealing. The breakup value doesn’t quite stack up, especially in the current climate. It would be best for Caltex to accept.

Aussie fires light tiny flame under climate action

22 January 2020

The damage may cost an estimated 0.5% of GDP, barely registering in the $1.3 trln economy. Politicians may act as social costs mount, but change will come faster if stakeholders also heed warnings that “secondary perils” could be recurring rather than one-off.   

Aussie fires could be tipping point for carbon tax

13 January 2020

Horrendous bushfires are pushing CO2 emissions cuts ever further into the spotlight. The scope for sharp hits to earnings at domestic champions like airline Qantas has stopped Canberra properly pricing carbon before. But inaction is becoming increasingly unsustainable.

Infrastructure investors catch the tech bug

9 January 2020

Macquarie may be in talks to buy AirTrunk for over $2 bln. It follows a record year for data centre M&A which saw volumes triple. Growing consumption of the new oil is fuelling demands for storage warehouses. And the hunger for yield is building up towering multiples.

Aussie petrol station bidding war lacks fuel

8 January 2020

UK-based EG Group is interested in buying pump operator Caltex Australia, raising pressure on Canada’s Couche-Tard to up its $6 bln offer. Its costs could already far exceed returns, however. For the target, it’s only a possible relief from a fraught go-it-alone IPO plan.

AB InBev’s Oz M&A party leaves antitrust headache

12 December 2019

The world’s biggest brewer’s $11 bln sale of its Australian unit to Asahi has been challenged by the country’s watchdog. Its tough stance on beer and cider competition may hurt boss Carlos Brito’s plan to cut debt. The Corona-maker has other options, albeit less appetising ones.