30 Jul LOCKDOWNS IMPACT OPTIMISM OVER CORPORATE EARNINGS; MERGER MANIA
Welcome to this week’s business and media intelligence update.
LOCKDOWNS IMPACT OPTIMISM OVER CORPORATE EARNINGS
As Australian cities continue to struggle with rolling lockdowns, and the country’s biggest economy enters its fifth week of pandemic restrictions, companies are also preparing for their second pandemic era earnings season.
According to Bloomberg, investors should watch for updates on inflation, virus outbreaks, the mining boom, consumer spending, and M&A activity. Meanwhile, the Australian Financial Review predicts that Delta-variant-related lockdowns will make it trickery for companies to issue earnings guidance.
Lockdown? What lockdown? The share market is booming and so, too, the number of Australian mergers and acquisitions (M&A).
According to Refinitiv data, as of July, domestic, inbound, and outbound Australian M&As totaled a record USD $143.6 billion. And this is despite USD $30.8 billion worth in transactions being withdrawn already in 2021.
The size of the deals is astonishing, with data from Goldman Sachs revealing that 38 per cent of the deals were worth between $1 billion and $4 billion, and a further 37 percent over $4 billion in value.
A key driver of the booming M&A environment is cheap debt, with record low interest rates expected to continue to fuel deals for another six to 12 months, regardless of lockdowns.
Analysts expect the infrastructure, oil and gas sectors to be among the busiest for deals. ESG pressures from investors are forcing oil and gas companies to divest assets as seen by AGL’s demerger from its power generation business, and BHP’s plans to sell its coal assets.
Read more here.
WHAT PWC’S STAFF COMPETITION, #YOUKNOWYOUREINLOCKDOWNWHEN, REVEALED
How do you keep employee morale up in the middle of a pandemic lockdown?
Well, here at Cannings, we have … never mind.
But across at PWC, they have a daily photo competition for staff members who are encouraged to post humorous pictures of life under lockdown. Home schooling, anyone? EY and KPMG meanwhile, are providing virtual childcare for parents in need of someone to entertain or keep an eye on their munchkins.
Starved for ideas? Here’s what other Australian companies are doing.
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