☕️ Pizza pullback

Former market darling Domino's is having a tough time of it.

July 26, 2023

Good morning.

The war being raged against ‘woke investing’ in the US does not appear to have made it to Australia yet. Australian Ethical Investments posted a 48% increase in funds under management in the recently ended financial year, according to a market update on Tuesday, pushing its total AUM above $9 billion.

Investment performance ($266 million) outpaced inflows ($177 million) during the June quarter. Australian Ethical shares (+5%) were among the better performers on the bourse yesterday, narrowly missing out on inclusion in our market movers section below.

ps. if this was forwarded to you, you can sign up for LOI at letterofintent.com.au

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MARKET MOVERS

*Stock data as of the market close. Commodities and crypto data in USD.

Market News: Onetime market darling Domino’s Pizza has been having a tough time of it lately. The stock is down about 70% from its pandemic peak in September 2021 and took another hit on Tuesday, with a downgrade from Goldman Sachs providing the catalyst for the latest decline.

The investment bank raised questions about the company’s ability to pass on higher input costs to its customers, and also about fierce competition for franchise sales from other chains, with Pizza Hut (recently sold to new private equity owners) and fast food giant McDonald’s both in aggressive expansion mode.

THE QUICK SYNC

  • China named a new central bank governor. (Bloomberg)

  • Spotify posted higher than expected subscriber growth, but deeper losses, on rising music royalties and podcast costs. (Variety)

  • How the credit card partnership between Apple and Goldman Sachs turned sour. (The Information)

  • The IMF lifted its global growth forecasts slightly, but warned about persistent challenges in China. (Reuters)

  • LVMH warned of a slowdown in the US luxury market (Financial Times)

TRADING FLOOR

M&A:

  • Propel Funeral Partners is strengthening its first line of defence as InvoCare finalises the last terms of a take-private agreement. (AFR)

  • Talon Energy shareholders have fired off an ultimatum to the board to take Strike Energy’s buyout proposal seriously. (AFR)

    • Talon has tapped Royal Bank of Canada and Allen’s to defend the buyout proposal from Strike Energy. (The Australian)

  • Jarden and Nomura extended their partnership by another two years. (AFR | The Australian)

  • IFM is in the final stages of negotiations to acquire a stake in Tally Group. (AFR)

  • BlueScope and Visy have struck deals to buy gas from Senex’s Atlas project in Queensland. (SMH)

  • Deloitte has hired the Mainsheet Capital staff in Perth to bolster its Western Australia presence. (The Australian)

Capital Markets:

  • Panoramic Resources is set to announce its equity raising plans by the end of the week (The Australian)

  • Critical Resources and Dotz Nano were drumming up interest in equity raisings. (AFR)

  • Redcape’s investors are being told withdrawals are paused until at least the end of December. (AFR)

VC:

  • Diraq has won the lion’s share of a one-off NSW government $7m quantum commercialisation fund. (StartupDaily)

  • Silicon Quantum Computing has more than doubled its valuation via a $50.4m Series A capital raise. (BNA | StartupDaily)

  • Sans Drinks was placed in administration. (StartupDaily)

  • Bae Juice takes $500,000 shot as it looks to US. (StartupDaily)

Others:

  • Goldman Sachs’ local chairman of corporate advisory Bruce MacDiarmid is retiring. (AFR | The Australian)

  • Mirvac Group is understood to be the latest property company embarking on job cuts. (The Australian)

  • Activist investor David Kingston has demanded that Ardent return its $141m in idle cash to shareholders. (AFR)

THE WATERCOOLER

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