☕️ Whack-a-mole

Markets are using the Aussie dollar to bet against China

Good morning.

Economists are downgrading their forecasts for China’s economy after the nation’s central bank cut lending rates by less than expected yesterday.

As policymakers play ‘whack-a-mole’ on stimulus measures, markets are increasingly fretting over the risks facing one of the world’s key economic engines. It’s taking a major toll on the Aussie dollar, which is now flirting with a nine-month low and could make the RBA’s fight with inflation that much tougher.

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MARKET MOVERS

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

Market News: A butterfly flaps its wings in Beijing and there’s a typhoon on the ASX. So it was for A2 Milk on Monday, which may be watching its largest market shrink right before its eyes.

After making $1 billion in Chinese sales, the premium dairy label is warning China’s falling fertility rate could hurt the growth of its infant formula business.

Shares fell 13.56% on Monday after A2M’s CEO said he expects the lucrative daigou channel to get back to just half its pre-COVID strength.

THE QUICK SYNC

  • Goldman Sachs is exploring a sale of its investment advisory business as it looks to walk away from the mass market. (Financial Times)

  • Speaking of Goldman, Malaysia’s government has pledged to renegotiate the 1MDB settlement it predecessors came to with the investment bank. (CNBC)

  • Softbank’s semiconductor business Arm is filing for an IPO in what could be the biggest US listing of the year. (Bloomberg)

  • Embattled Chinese property developer Country Garden will be removed from the Heng Seng index after failing to meet bond coupon payments. (CNBC)

  • China has trimmed a benchmark interest rate on loans as economists urge stronger stimulus measures. (WSJ)

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TRADING FLOOR

M&A:

  • EQT Partners is taking an early look at VetPartners. (AFR)

  • Acheron Capital wants to buy Balmaine Gold’s gold mine in Ballarat for $42m. (AFR)

  • Southern Capital appoints Bank of America to assist with testing buyer appetite for Qualitas Health. (AFR)

  • Marsh & McLennan has agreed to acquire Australia’s Honan Insurance. (AFR)

  • Pacific Current is believed to have held talks to buy Fortlake Asset Management for about $70m in the past year. (The Australian)

Capital Markets:

  • BlueRock has hired Ad Astra and Clearsight Advisors to advise on a capital raise and find a capital partner. (AFR)

  • Azure Minerals launched a $120m capital raise with Barrenjoey and Canaccord Genuity as joint lead managers and underwriters. (AFR | The Australian)

VC:

  • HEO Robotics has raised $12m in a Series A funding round led by AirTree Ventures. (AFR)

  • Beyond Meat revealed its vegan burger sales had fallen by a third over the last quarter. (AFR)

  • LaunchVic reveals a $1m Hugh Victor McKay fund for agtech startups. (SmartCompany)

Others:

  • Iress is once again under the spotlight for a private equity take-out after its share price crashed almost 36%. (The Australian)

  • A2 Milk revealed double-digit increases in net profits, earnings and revenue for the 2023 financial year. (SMH)

  • Matthew Nicholls has reappeared at Wilsons as head of private wealth advice. (AFR | The Australian)

  • The Premier Investments CEO has quit less than two years into the role ahead of a shake-up of the retail group that includes a proposed demerger. (BNA | The Australian)

  • AMP has agreed to pay shareholders compensation of $110m following a class action initiated in 2018. (BNA)

  • Qantas Airways has been accused of benefitting from $1bn in interest-free loans from customers after refusing to issue refunds for flight cancellations during the COVID-19 pandemic. (BNA)

THE WATERCOOLER