Media saga heats up: The battle between NZME and Nine Entertainment, the owners of Stuff, moved to the High Court in Auckland on Friday. NZME argued that it still had exclusive negotiating rights with ASX-listed Nine Entertainment Co for the purchase of rival Stuff’s media assets and is seeking an interim injunction to force Nine back to the negotiating table. In response, Nine said it pulled the pin on talks with NZME and negotiations have finished.
Applying pressure: NZME had also sought urgent approval from the Commerce Commission to overturn its earlier finding preventing the merger thereby allowing it to purchase Stuff for a nominal $1. At stake is NZME’s argument that the parties had been negotiating during an exclusive period.
The outcome: Justice Katz reserved her decision on the matter and will issue her ruling later today.
We got there: Payroll software provider PaySauce has completed the final instalment of its $5.8 million capital raising. Chair Nick Lewis highlighted the success of the capital raising during a global crisis describing it a “massive achievement” and a demonstration of shareholder confidence.
Further expansion: Originally under-subscribed when it was announced in January, almost 12 million shares were issued in March at 34 cents to bring in $4.07 million. In April, a further 3.4 million shares were issued, before the final allotment on Friday. PaySauce will use the capital to enter the Irish market, expand its New Zealand head count, and further develop the software platform
Sharp contraction: Manufacturing activity fell sharply in April and its future performance will depend on how quickly it can adapt to new Covid-19 requirements for physical distancing and the implementation of worker safety practices on the factory floor, as well as the extent of the global slowdown.
The Bank of New Zealand-BusinessNZ performance of manufacturing activity index came in at a new low of 26.1 in April (seasonally adjusted), a dramatic 51 percent slide on February’s reading of 53.7. A reading below 50 indicates a contraction in manufacturing. The previous low point was 36.1 in November 2008 at the worst of the GFC.
Catherine Beard, executive director of Manufacturing NZ, said unsurprisingly 90 percent of the responses from manufacturers were negative on the toll the lockdown had taken on the sector. However, she expected a return to “relatively stronger levels of activity” once Level 2 restrictions started.
Home sales dry up: With the country all but locked down in April, home sales recorded a 78.5 percent year-on-year drop, but there are signs the dip could be short lived, according to the Real Estate Institute of New Zealand.
Staying positive: Chief executive Bindi Norwell said the positive news was that there were good levels of activity starting to occur post the Level 3 lockdown with both first-time buyers and investors active in the market.
Norwell said the number of new listings coming onto the market this month and consumer confidence levels, particularly in relation to ongoing employment and ability to access finance, will be key to where the market goes from here.
Not such good news: NZIER said the percentage of homes nationally selling in the $1 million or more bracket increased to a record 21.6 percent, from 13.6 percent last April, likely reflecting a high percentage of sales concluded in the Auckland market. The number of homes selling for under $500,000 across New Zealand fell from 39 percent to 29.7.
Inventory very tight: Unsurprisingly, the total number of properties available nationally declined by nearly a third in April to 19,702, more than 10,000 listings down from April 2019 and the lowest level of inventory since records began, the institute said.
U.S. retail sales plunge: America’s retail sales collapsed at a historic rate in April, underscoring the severe economic impact coronavirus is having on U.S. retailers. An advance reading from the Census Bureau showed retail sales plummeted by 16.4 percent from the prior month in April, the largest decline since the series began in 1992. The drop was far worse than economists had expected, and it was significantly steeper than the revised 8.3 percent sales decline in March.
Penniless: With 846 stores and 85,000 employees, JC Penney plans to go bankrupt, following hard on the heels of Neiman Marcus and J. Crew, which have also filed for bankruptcy protection.
End of an era: The 118-year-old department store chain filed for bankruptcy protection on Friday. The company said it planned to “accelerate” permanent store closings as part of its bankruptcy proceedings. JC Penny has been in trouble for some time, analysts saying the business had failed to keep up with the times and was seen by many as outdated and out of touch.
Buffet reveals another sell-down : High profile investor and Berkshire Hathaway CEO Warren Buffett has revealed the company has significantly reduced its stake in investment banking giant Goldman Sachs during the first quarter, selling 85 percent of its stake.
Great return: Berkshire Hathaway initially acquired $5 billion of preferred stock in the investment bank in 2008, as a vote of confidence in Goldman Sachs at the height of the global financial crisis. It redeemed those shares three years later in 2011, making a profit of $3.7 billion on the trade.
Each way bet: At the company’s recent annual meeting Buffett said that “I think overall the banking system is not going to be the problem” although he added that if economic difficulties become severe enough “even strong banks can be under a lot of stress.”
PPE for your flight: McCarran International Airport in Las Vegas has installed new vending machines loaded with packs of personal protective equipment. The machines have an assorted selection of PPE products including a range of hand sanitizer options, alcohol wipes, a four-pack of disposable gloves and a selection of face masks.
