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Virgin Australia shares to debut following $439 million IPO
Virgin Australia returns to the Australian Securities Exchange (ASX) on Tuesday, after raising A$685m ($439m) in a public offering. Dealmakers are hoping that this transaction will help revive a stagnant listings market. After Bain Capital saved it from bankruptcy, Australia's second largest airline in terms of market share will be delisted by 2020. The airline sold 236.2 millions shares at A$2.90 per share, which equates to A$2.32billion on a fully-diluted basis. The IPO prospectus revealed that Bain, who bought Virgin for A$3.5billion including liabilities, would see its stake reduce to 39.4%, from around 70%. Qatar Airways, which has recently purchased into the airline will retain 23%. A term sheet that was seen by. Fund managers said that the shares were priced at a discount of almost 30% to Qantas's. This was an incentive for investors to purchase. A report by the Australian Competition and Consumer Commission showed that Qantas had a market share of 37.5% compared to Virgin's 34.4%. From our perspective, Virgin's IPO pricing was attractively discounted compared to Qantas. This allowed shareholders to profit from Virgin's operational improvements and structural tailwinds such as the increase in premium ticket demand. Virgin's focus on domestic markets and its hedged fuel positions provide resilience against geopolitical risks and commodity market risk. Virgin reduced its international business while Bain owned it. The airline has resumed its long-haul service to Doha via a lease with Qatar, the state-owned carrier. Prospectus revealed that the IPO would bring a windfall of fees to Goldman Sachs and UBS, as 2% of the proceeds will be paid to underwriters. The prospectus offers the option of paying an additional 1% incentive fee. LSEG data shows that the IPO volume has been flat in Australia over the last few years, with only one listing worth $6.4 Million so far in 2025, down from $319 millions worth of listings at the same time last Year. Liu stated that "a successful Virgin debut would help revive Australia's subdued IPO markets," Fresh equity supply is essential for a healthy market, especially from high-profile, well-supported listings. GemLife, a retirement resort group, is set to begin trading on July 3, after raising A$750 Million in its IPO earlier this month.
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Brazil's BNDES returns after a decade to the equities markets
The Brazilian state development bank BNDES said Monday that it will restart investments in equities following a nearly decade-long pause. It hopes to spend at least $5 billion reais (907.13 million dollars) this year in the "green" economic sector. The bank's investment arm BNDESPar will distribute the funds, according to the statement. BNDES plans to invest an additional 5 billion reais through investment funds. However, it did not give a timeframe for these investments. In a press statement, the bank stated that this move came after almost 10 consecutive years of no new direct investment from BNDES. "A long period focused primarily on massive divestment" and portfolio demobilization was also a part of their strategy. BNDES was once known for its massive funding of some of Brazil's biggest firms, such as oil giant Petrobras. The Development Bank of Canada announced its latest development last month. Trimmed its stake JBS has increased its share of the market to 18%. BNDES also has stakes in the planemaker Embraer and oil company Brava, as well as the logistics firm Hidrovias do Brasil. Its portfolio includes private companies, investment funds, and debentures. Aloizio Mercadante, the head of BNDES, said that the Lula government was resuming BNDESPar’s mission to strengthen the capital market and develop the country. This is a return to Lula’s strategy from 2003 to 2010. BNDESPar is a portfolio of 53 mutual funds with 8 billion reais committed capital, and an additional 27 billion reais from other investors, such as equity and credit funds. Mercadante stated that the new investments will be made to all companies, regardless of size, and will focus on decarbonization as well as green transition, innovation and other areas. It said that the bank could participate as an anchor investor in public offerings, acquiring up to 30 percent of smaller companies seeking to enter the capital markets for the first. However, it also had the option to engage in private deals.
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Wall St. ends with a higher price as hopes of rate cuts offset fears of an escalating conflict with Iran
Wall Street rose on Monday, as the prospect of the U.S. Federal Reserve reducing interest rates by as early as July offset concerns that Iran could disrupt crude transportation in the Middle East. All three major U.S. indexes ended the day higher. The consumer discretionary sector led the gains, with Tesla providing a strong boost. "The rally was a little surprising," said Jay Hatfield. He is the CEO and portfolio manager of InfraCap, a New York-based company. In a sense, the U.S. attacks have ended the uncertainty about whether or not the U.S. would attack. Hatfield said, "The market is very bullish at this time of the year because we are supposed to see a pullback in June." "People don't want to sell on this market." Michelle Bowman, Vice Chair of the Federal Reserve, said that it was time to adjust the policy rate as the risks on the job market outweighed inflationary concerns relating to tariffs. Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said that tariffs had so far had a smaller economic impact than anticipated. The financial markets expect at least two rate cuts of 25 basis points before the end of the year. It is expected that the first rate cut will occur in September. Paul Nolte is a senior wealth advisor & Market Strategist at Murphy & Sylvest, located in Elmhurst in Illinois. Powell's "wait and see" is probably a good tactic. But, of course, markets love lower interest rates. Tesla shares soared following the launch of its robotaxi service in Austin Texas. Israel continued to bomb Iran a day after the U.S. entered the war. Oil prices fell despite Iran's refusal to take action against oil and gas tanker traffic in the Strait of Hormuz. Tehran had threatened to close the Strait of Hormuz - a vital oil shipping route. Nolte stated that "the markets read this as saying 'hey we're success,'" we destroyed their nuclear capability and were able support any counterstrikes. "I believe there was much concern that Iran would act more aggressively than it did." S&P Global’s "flash" advance purchasing managers' (PMIs) indexes showed that the U.S. economic expansion is accelerating at a faster pace than analysts expected. Separately, despite the pressure of high borrowing costs, new home sales posted an unexpected increase in May. The Commerce Department's final assessment of first-quarter GDP, its Personal Consumption Expenditures and Fed Chair Jerome Powell’s congressional testimony will likely be analyzed for clues about the near-term direction of monetary policy. Preliminary data shows that the S&P 500 rose 57.20, or 0.96 percent, to 6,025.04 while the Nasdaq Composite grew 183.98, or 0.95 percent, to 19,631.39. The Dow Jones Industrial Average grew 373.48, or 0.88% to 42,580.30. Fiserv shares soared after the company announced that it was launching a digital asset platform. Northern Trust has jumped in response to a Wall Street Journal article stating that Bank of New York Mellon had discussed a possible merger. Super Micro Computer, a maker of AI-servers, dropped its stock after it announced that it would be issuing a private offer of convertible bonds for five years worth $2 billion. Later this week, Nike, a sportswear firm, and FedEx - a package delivery company - will release their quarterly results.
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Louis Dreyfus will reopen a rival's former grain terminal in Indiana
Louis Dreyfus Company, based in Rotterdam, announced on Monday that it will reopen an abandoned U.S. grain terminal in Burns Harbor Indiana, at the southern end of Lake Michigan, in early 2026. This will provide the global commodities trader with export market access through the Great Lakes Seaway and St. Lawrence Seaway. The facility, built in 1979 by Cargill, a rival grain merchant, has been closed since 2023 when it ceased operating there because of difficult market conditions. Privately-held Dreyfus is the "D" in the ABCD quartet of global grains trading giants, along with Cargill, Archer-Daniels-Midland and Bunge Global. The global grain glut and weak demand have eroded profits for all four companies. The Burns Harbor terminal can load grain ships up to 30,000 metric ton capacity at a rate of 90,000 bushels per hour. This is about half the size compared to larger terminals in the U.S. Gulf Coast or Pacific Northwest. Dreyfus stated that the facility has a storage capacity of 7.2 million bushels, 200 rail cars, and 20 barges. Burns Harbor, located on the southern shores of Lake Michigan and with easy access to regional grain markets, is a well-positioned port. LDC will use the port to increase market access for local farmers, and serve customers throughout North America and beyond," said Gordon Russell, Dreyfus' head of grains and oilseeds. The terms of the agreement with Ports of Indiana was not disclosed. The Great Lakes System exports are a small part of the total U.S. agricultural trade, valued at $176 Billion last year. Most of the crop exports leave the U.S. Gulf Coast and Pacific Northwest. According to U.S. Department of Agriculture data on export inspections, exporters have only shipped about 125,000 metric tonnes of corn and wheat this year after shipping around 1.06 million tons of soybeans, corn, and wheat at its ports in the previous year.
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Wall St. rallies on hopes of rate cuts outweighing Middle East turmoil
Wall Street gained on Monday, as fears of Iran retaliating against U.S. Airstrikes and escalating the Middle East war were offset by the prospect that the U.S. Federal Reserve would cut interest rates in July. All three major U.S. indexes rose modestly as a result of a broad rally. The consumer discretionary sector led the gains, with Tesla providing a strong boost. "The rally was a little surprising," said Jay Hatfield. He is the CEO and portfolio manager of InfraCap, a New York-based company. In a sense, the U.S. attacks has ended the uncertainty about whether or not the U.S. would attack. Hatfield said, "The market is very bullish at this time of the year because we are supposed to see a pullback in June." "People don't want to sell on this market." Michelle Bowman, Vice Chair of the Federal Reserve, said that it was time to adjust the policy rate as the risks on the job market outweighed inflationary concerns relating to tariffs. Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said that tariffs had so far had a smaller economic impact than anticipated. The financial markets expect at least two rate cuts of 25 basis points before the end of the year. It is expected that the first rate cut will occur in September. Tesla shares surged following the launch of its robotaxi service, which was long anticipated in Austin, Texas. Shares of the electric vehicle manufacturer were up last by 9.4%. Israel continued to bomb Iran after the U.S. entered the war. Still, Oil prices fell after Iran's response did not include actions to disrupt oil and gasoline tanker traffic in the Strait of Hormuz. Tehran had threatened to close the Strait of Hormuz - a vital oil shipping route. S&P Global’s "flash" advance purchasing managers' (PMI) indexes showed that the U.S. economic expansion is a little faster than analysts expected. Separately, despite the pressure of high borrowing costs, new home sales posted an unexpected increase in May. The Commerce Department's final assessment of first-quarter GDP, its Personal Consumption Expenditures and Fed Chair Jerome Powell’s congressional testimony will likely be analyzed for clues about the near-term direction of monetary policy. The Dow Jones Industrial Average gained 305.71, or 0.72 %, to 42512.53. The S&P 500 rose 44.70, or 0.75 %, to 6,012.54. And the Nasdaq Composite added 177.08, or 0.91 %), to 19,624.49. Consumer discretionary stocks were the top gainers among the 11 major S&P 500 sectors, with energy being the only one in the negative. Eli Lilly's shares rose by 0.9%, among other companies that moved the market. Investors were not impressed with detailed trial results on Novo Nordisk’s experimental drug for obesity CagriSema. Novo Nordisk's shares dipped 5.3%. Fiserv's share price rose by nearly 3,3% after the company announced that it was launching a digital asset platform. Northern Trust's stock jumped 7.2% following a Wall Street Journal article that said Bank of New York Mellon had discussed a possible merger. Super Micro Computer, a maker of AI-servers, dropped 6.8% following the announcement of a private offer of convertible bonds for ten years worth $2 billion. Later this week, Nike, a sportswear company and FedEx, a package delivery company will release their quarterly results. On the NYSE, advancing issues outnumbered declining ones by a ratio of 1.67 to 1. On the NYSE, there were 100 new highs. There were also 66 new lowers. On the Nasdaq 2,389 issues rose, while 2,026 declined. The ratio of advancing to declining stocks was 1.18:1. The S&P 500 recorded 12 new highs for the past 52 weeks and 4 new lowests, while the Nasdaq Composite registered 77 new highs for this period and 105 lows.
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Tesla seeks to keep Texas robotaxi data under wraps, regulator says
According to a letter published on Monday, Tesla informed U.S. regulators its answers on the safety and deployment of its robotaxi in Texas were confidential business information that should not be released. The National Highway Traffic Safety Administration announced on Friday that it was reviewing the answers provided to questions about the safety and reliability of Tesla's self-driving roboticaxi in bad weather. The agency stated on Monday that Tesla is invoking federal law which "restricts NHTSA’s ability to release publicly what the companies call confidential." The agency said that, "after assessing these responses and any other relevant information NHTSA will be taking any necessary action to protect road safety." Since October, NHTSA is investigating collisions between Tesla vehicles that use Full Self-Driving Software in conditions of low visibility. The investigation covers 2.4 millions Tesla vehicles with FSD after four reported accidents, including one fatal accident in 2023. NHTSA stated on Monday that the agency's investigation remains open into Tesla's FSD Supervised/Beta. Tesla says the information it provided to NHTSA was commercially valuable, as competitors could use it for their own automated and advanced driving systems. In a letter to NHTSA, Casey Blaine, Tesla's regulatory senior counsel wrote that "nefarious actors" could use the marked information in order to discredit Tesla for the sake or notoriety. In the absence of public disclosure, accessing the marked information would require significant time and resource expenditures and intimate knowledge of Tesla. Tesla released a small fleet of self-driving cabs to pick up paying passengers on Sunday in Austin, Texas. Elon Musk announced the launch of robotaxis and social media influencers posted videos of their rides. Musk believes that the Tesla EV maker will be able to survive financially if it can attract paying passengers. Tesla shares rose 8% to $347.80 in the afternoon on Monday.
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Turkish Airlines confirms that it has held non-binding discussions about potential Air Europa investments
Turkish Airlines said it was holding non-binding talks to evaluate a possible investment in Spanish airline Air Europa, and explore potential partnership synergies. In a late Friday filing with the stock exchange, Turkish Airlines confirmed that it was considering a bid to acquire a minority stake of Air Europa. The flag carrier stated that it evaluates growth potentials regularly to improve its global position in the aviation sector. Media reports have stated that Turkish Airlines has been in talks to buy shares in Air Europa. In this context non-binding talks are being held in order to assess the potential investment in Air Europa, and to explore possible partnership synergies", the company stated in a statement. Turkish Airlines' consideration is important, since there are very few carriers outside Europe that have bought shares in regional players. Air Europa operates flights within Spain and between Madrid, Europe and Latin America. (Reporting Canan Svgili, Editing Jan Harvey)
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After Iran threatened to retaliate against US strikes, Doha in Qatar heard explosions
Witnesses reported hearing explosions over Qatar's capital Doha, just hours after a Western diplomatic official said that there was a credible Iranian threat to the U.S. run al Udeid Air Base in the Gulf Arab State since noon. The diplomat's remarks came shortly after Qatar announced that it had temporarily closed its airspace to ensure the safety for residents and visitors. The U.S. Embassy in Qatar advised Americans earlier to shelter in place out of "overwhelming caution". Iran has threatened to retaliate after U.S. aircraft dropped 30,000 pound bunker busters on Iran's nuclear underground installations at the weekend. Meanwhile, President Donald Trump raised the possibility that the Iranian government could be overthrown. Israel had struck earlier on Monday a prison for political prisoners located in Tehran, a powerful demonstration of its expanding targets beyond nuclear and military sites. Its aim was to strike at the very pillars that support Iran's ruling regime. Two U.S. officials have said that Washington believes Iran will soon launch attacks against American forces in the Middle East, but the U.S. still seeks a diplomatic solution that would allow Tehran to forgo any retaliation. Oil prices were largely unchanged despite Iran's threat to disrupt oil shipments out of the Gulf. This suggests traders did not believe the Islamic Republic was serious about any action which would disrupt global supply. In Moscow, Iranian Foreign Minister Abbas Araqchi and Russian President Vladimir Putin met to discuss Tehran's next moves.
Australia raises fossil fuel-fired electrical power output in H1 2024: Maguire
Australia's. electrical power producers lifted generation from nonrenewable fuel sources by. more than from tidy source of power during the first half of. 2024, weakening the momentum of the nation's energy. transition from contaminating fuels.
Utilities produced 76.55 terawatt hours (TWh) of. electrical power from nonrenewable fuel sources throughout the first 6 months of. this year, which was 4.2% more than throughout the opening half of. 2023, information from energy think tank Ember programs.
That jump in fossil fuel-fired generation was the largest. for that time frame in at least nine years, and highlights the. sustaining obstacle dealing with Australian power manufacturers as they attempt. to wean generation systems away from fossil fuels.
On the other hand, utilities increased electrical energy from clean. power sources by just 1.3% throughout the first half of 2024 from. the same period last year, which was the tiniest increase in clean. generation throughout the very first half of the year given that 2017.
The slow growth speed of tidy power output saw tidy. power's share of Australia's generation mix diminish for the very first. time in 7 years, to 35.6% of total utility-supplied. electrical energy generation.
HYDRO HIT
A key drag on tidy generation was a nearly 14% fall in. hydro power output during January to June from the year before.
Low rain in key southern locations during the southern. hemisphere summer clipped hydro power output to 6.45 TWh, down. from 7.5 TWh during the very same period a year back and the lowest. for that period since 2017.
Output from wind farms likewise diminished during the first half of. the year, by 5.3% from the very first half of 2023, which left solar. farms as the primary contributor to Australia's tidy power. generation expansion up until now this year.
SOLAR SHINES
Utility-supplied solar electricity generation throughout the. initially half of this year was a record 21.5 TWh, up 12% from the. first half of 2023.
That strong development rate surpassed all other kinds of. generation in Australia's power system so far this year, and. assisted seal solar as Australia's main clean electrical power. generation source.
Even so, the intermittent nature of solar generation - which. stops totally in the evening and can dip greatly during cloudy. durations - has actually implied that Australian energies have been required. to crank up generation from fossil fuels this year to make sure. total electrical power materials broadened to satisfy demand.
KING COAL
Coal remains the biggest single power generation fuel in. Australia, accounting for 67 TWh of electrical energy throughout the first. half of the year.
That total is up 4.4% from the exact same period in 2023, to the. greatest given that 2021.
Coal's share of overall generation was 56.3%, compared to. 55.7% during the very first half last year.
Generation from gas was 9.6 TWh, up 3% from the. first half of 2023.
Emissions from fossil fuel usage in power generation were. 70.22 million metric heaps throughout January through June, up 2.85. million tons from the first half of last year and the greatest in. two years.
That emissions count is liable to increase even more above last. year's total as the southern hemisphere winter season sets in and. output from solar plants declines simply as need for heating. rises.
A steep recovery in both wind and hydro generation over the. coming months during the traditional peak output periods of both. source of power could assist raise overall clean electricity output,. and might possibly limit the overall volume of fossil fuel use in. Australian power generation.
However with fossil fuel generation already running 4% ahead of. last year's speed through the opening six months, 2024 looks set. to be another year of growth in fossil fuel-fired output in. Australia regardless of continuous efforts to decarbonise electrical power. production.
<( The viewpoints expressed here are those of the author, a. columnist .>
)(source: Reuters)