—— Apollo Finances Manhattan Apartment Deal; Saudi IPO Oversubscribed 69 Times; Nvidia Breaks $1 Trillion Valuation; Deutsche Bank Hires Aggressively; Singapore Invests in Centuries-Old German Firm; Li Auto Stock Doubles; Case-Shiller Index Rises Two Months in a Row
1. Apollo Finances Manhattan Apartment Deal
Private equity firm Apollo Global Management will provide a $68 million acquisition loan through a subsidiary to Slate Property, KABR Group, and Avenue Realty Capital. The three companies are jointly purchasing a $120 million apartment building in Manhattan’s Upper West Side.
Slate Chairman Martin Nussbaum believes Manhattan real estate has long-term, irreplaceable value, noting that new apartment supply falls far short of demand. The firm has partnered with Apollo on numerous equity and debt deals, and the relationship is strong.
This acquisition is set to become the largest real estate transaction in New York City so far this year.
Over the past decade, Slate has acquired more than $6 billion in real estate, mostly apartment buildings.
The building is located near Columbus Circle and has a total of 166 apartment units.
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2. Saudi IPO Oversubscribed 69 Times
Saudi flour producer First Milling Co. received $18 billion in total IPO orders—69 times oversubscribed—mostly from institutional investors. The company is expected to raise $261 million.
Due to overwhelming demand, the company can price its shares at the higher end of the valuation range. First Milling will begin accepting retail investor orders from June 6 to June 7.
The IPO is expected to be Saudi Arabia’s second-largest this year, behind Jamjoom Pharmaceuticals Factory’s $336 million raise.
Saudi Arabia’s IPO market started this year at its slowest pace since 2014, mainly due to falling oil prices and a global economic slowdown. The strong response to First Milling’s IPO suggests signs of market recovery.
So far this year, Saudi IPO volume totals just $72 million—far below last year’s $4 billion during the same period.
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3. Nvidia Breaks $1 Trillion Valuation
Before markets opened this morning, Nvidia’s stock rose 4% to $404.90, pushing its valuation past the $1 trillion mark.
Only five U.S. companies have reached a $1 trillion valuation—Apple, Microsoft, Amazon, Google, and now Nvidia.
Zeno Mercer, senior research analyst at ROBO Global, said demand for Nvidia’s products is high because the next wave of innovation and application will heavily rely on them. The company is perfectly positioned.
On Monday, CEO Jensen Huang unveiled several new AI products, including the DGX GH200 AI supercomputer platform.
Nvidia significantly raised its revenue forecast, causing its market cap to soar by $600 billion.
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4. Deutsche Bank Hires Aggressively
Deutsche Bank believes that today’s sluggish capital markets present a prime opportunity to gain market share.
Recently, the bank hired executives from Bank of America, Credit Suisse, Lazard, and Citigroup, and plans to bring on more experienced professionals.
Fabrizio Campelli, head of the investment and commercial banking division, said the bank has recruited nearly 50 industry bankers and product specialists this year to prepare for a market rebound.
However, the biggest question remains when global deal activity will return. So far this year, global M&A volume is down 46% year-over-year, with little sign of recovery.
As capital markets cool, investment banking fees are also falling.
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5. Singapore Invests in Centuries-Old German Firm
Sources say Messer SE, a 106-year-old German family business, has received investment from Singapore sovereign wealth fund GIC, valuing the company at €12 billion.
GIC’s €2 billion investment will secure around a 25% stake. Messer plans to use the capital to buy back shares in Messer Industries, a joint venture with CVC Capital Partners.
Although reclaiming joint venture shares and bringing in external investors could pave the way for a future IPO, Chairman Stefan Messer has repeatedly said he hopes to keep the company privately owned.
Founded in 1898, Messer has 11,000 employees worldwide and generated €4.2 billion in revenue last year. The company primarily produces industrial and medical gases, as well as cutting and gas control equipment.
GIC manages $690 billion in assets and has increasingly participated in private equity deals in recent years.
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6. Li Auto Stock Doubles
Li Auto’s stock has doubled from last year’s low, with further upside potential.
The Beijing-based EV maker has unexpectedly posted net profits in the past two quarters, helped by new model releases and cost control.
Citigroup analysts are bullish on Li Auto and predict the stock could rise another 88% by year-end. This month, Morgan Stanley also raised its price target for Li Auto shares by 40%.
Since mid-2022, Li Auto has launched new models at a pace far exceeding rivals XPeng and NIO. Last quarter, revenue surged 96%, and deliveries hit a record 52,584 units.
Since October last year, Li Auto’s stock has doubled thanks to strong new model performance.
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7. Case-Shiller Index Rises Two Months in a Row
The latest seasonally adjusted data shows the S&P CoreLogic Case-Shiller Home Price Index rose 0.4% in March compared to February. Buyers are gradually accepting high mortgage rates and beginning to compete for limited listings.
Craig Lazzara, managing director at S&P Dow Jones Indices, said that although U.S. home prices began falling in June 2022, the past two months’ gains do not yet prove a market recovery.
In March, the index was up 0.7% year-over-year, below the 2.1% gain recorded in February. Of all U.S. regions, downtown Miami and Tampa saw the largest home price increases.
While a few Florida cities led in price growth, most U.S. home prices continued to trend downward.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.