— Amazon Shares Spike, Then Slide; Deutsche Bank Acquires UK Boutique Bank; Post-Covid Recovery Fuels PetroChina Profits; China ETFs Attract $6.5 Billion in a Week; Blackstone Sells Japan Logistics Portfolio; China’s Mortgage Growth Hits Historic Low; Texas Teacher Pension Invests in Warehouses
1. Amazon Shares Spike, Then Slide
Amazon released its quarterly earnings on Thursday, reporting both revenue and net profit above analyst expectations. Cloud division AWS grew 16% to $21.4 billion, marking its slowest growth rate since Amazon began disclosing AWS revenue separately.
Amazon warned that growth in its most profitable segment—cloud services—has slowed significantly, and the current market environment is not favorable for large-scale tech investment.
Following the report, Amazon shares surged 12% in after-hours trading, but the rally faded after the company issued a cautious outlook, and the stock ultimately closed down 1.3%.
In 2022, AWS revenue grew as much as 40%, but analysts now expect future growth to fall below 10%. CFO Brian Olsavsky revealed that Amazon offered deep discounts to secure long-term contracts, impacting AWS margins.
Although AWS remains Amazon’s most profitable business, its slowing growth has alarmed investors.
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2. Deutsche Bank Acquires UK Boutique Bank
Deutsche Bank AG has agreed to acquire UK-based boutique investment bank Numis Corp. for $512 million in an all-cash deal.
The offer represents a 72% premium over Numis’s Thursday closing price. Once completed, Deutsche Bank will become one of the largest investment banks in London.
With deal-making subdued in recent years, Deutsche has used this opportunity to bolster its talent pool by bringing on Numis bankers.
Fabrizio Campelli, Head of Deutsche’s Corporate and Investment Bank, said the deal will help Deutsche expand its UK corporate client base and diversify its revenue streams.
However, analysts are skeptical of the deal’s value—just yesterday, Deutsche announced 800 layoffs, and the acquisition will add 344 new employees while costing over $500 million, with limited expected business synergy.
Deutsche had previously shut down its equity trading desk but will regain such operations through the Numis acquisition.
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3. Post-Covid Recovery Fuels PetroChina Profits
PetroChina reported first-quarter net profit of ¥43.62 billion, up from ¥39.06 billion a year earlier, supported by China’s economic recovery after the pandemic. The company also recorded record-high profits for the 2022 fiscal year.
Yesterday, Sinopec and Cnooc both reported lower revenues due to falling oil prices.
In Q1, the average crude oil price dropped to $82 per barrel from $98 a year earlier.
Despite falling oil prices, the post-Covid economic rebound helped drive PetroChina’s revenue growth.
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4. China ETFs Attract $6.5 Billion in a Week
According to Citigroup data, Chinese ETFs drew $6.5 billion in inflows in the week ending April 26—roughly 10% of total inflows for all of last year.
This occurred despite a more than 4% drop in the MSCI China Index over the same period, as retail investors continued to favor low-barrier ETF products to access the market.
Though geopolitical tensions have recently intensified, the surge in ETF flows indicates retail traders remain eager to buy the dip. Experts caution that more monthly data is needed before drawing conclusions about economic or corporate recovery.
Geopolitical noise has overshadowed otherwise optimistic signals from China’s economy.
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5. Blackstone Sells Japan Logistics Portfolio
Singapore’s sovereign wealth fund GIC will acquire Blackstone’s Japan logistics property portfolio for $800 million.
The portfolio, developed by Daiwa House Industry, consists of six warehouses spread across Japan, totaling 4 million square feet. Blackstone has invested in Japan for over 16 years, with rapid growth in the local property market.
With the yen weakening and Japan’s tourism rebounding, GIC continues to seek attractive opportunities in Japan. Last year, GIC acquired a hospitality portfolio from Seibu Holdings for $1.1 billion.
Blackstone made a solid profit from the deal. Its Japan country head said the firm continues to pursue premium assets in logistics, data centers, hotels, and residential real estate.
Blackstone sees Japan’s property market as relatively healthy and less affected by inflation.
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6. China’s Mortgage Growth Hits Historic Low
The latest data from the People’s Bank of China (PBOC) shows that personal mortgage balances rose to $5.6 trillion in Q1, only ¥100 billion higher than a year earlier—marking the smallest annual increase on record.
In addition to weakened new loan demand, many borrowers are prepaying mortgages to reduce debt, further limiting overall growth.
Loans to real estate developers rose 5.9%, up from 3.7% in December, indicating banks are ramping up support for developers.
While home prices and sales rose in Q1, it’s unclear how long the rebound will last. In Q2, housing sales in China’s top 50 cities may slow.
Chinese legislators have reiterated their opposition to real estate speculation in favor of a stable, healthy housing market.
New housing-related loan issuance has fallen to its lowest level since 2013.
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7. Texas Teacher Pension Invests in Warehouses
On Thursday, the board of the Teacher Retirement System of Texas (TRS) approved a $1.5 billion investment in warehouse property firm Bridge Industrial.
As of last September, TRS managed $173 billion in assets, with real estate comprising 17% of its portfolio.
Warehouses remain attractive among property types, and the growth of e-commerce continues to fuel demand for warehouse space.
Blackstone invested about $1 billion in global industrial real estate in the last few months of 2022. In December, it acquired six industrial properties in the Toronto area.
In recent years, pension funds have increased their investments in U.S. REITs. According to S&P Global, between 2019 and April 2022, industrial REIT investments surged by 103%.
Founded in 2000, Bridge focuses on developing and acquiring industrial assets in the U.S. and the U.K.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.