ASB Securities Morning Brief for Saturday, 18 April 2015
Saturday, 18 April 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares fell, paced by Australia and New Zealand Banking Group and Spark New Zealand, as weakness in the Australian stock market weighed on dual-listed companies. Fonterra Shareholders' Fund rebounded from a record low. The NZX 50 Index fell 20.275 points, or 0.3 percent, to 5861.482. Within the index, 25 stocks fell, 15 rose, and 10 were unchanged. Turnover was $128 million... Read more

The New Zealand dollar pared its gains against the greenback ahead of US inflation data, on concern a strong number could make up for a string of recent weak economic data and reignite talk of Federal Reserve rate increases. The kiwi dollar traded at 76.61 US cents as at 5pm in Wellington, having reached a three-month high of 76.97 cents overnight, from 75.94 cents yesterday. The trade-weighted index was at 79.83, having touched a nine-month high of 80.08, from 79.34 yesterday... Read more

Dollar could stay above Aussie dollar parity for 'at least a year', UBS says... Read more

Benefit numbers confirm NZ split into 'two nations'. New welfare benefit figures confirm that New Zealand is splitting into "two nations", with big improvements in Auckland and Christchurch but most provincial areas lagging far behind.... Read more

The Ministry of Health is well down the track to pilot the country’s first social impact bond, originally mooted 18 months ago, which would pay out on measurably improved social outcomes such as reductions in alcohol and drug use or recidivism... Read more

Growth in Auckland's house price outdoes pay. The average Auckland home earned nearly $230 a day in the past year - about twice what the average worker made in their job. It means the typical Auckland property earned about the same as an entry-level doctor or head of department teacher with responsibility for 10 staff... Read more

Latest residential property prices for Dannevirke show something of a "rock star" housing market, which is being reflected in the number of buyers around. Real Estate Institute of New Zealand (REINZ) data for Dannevirke show a $71,500 increase in median residential property prices, up from $90,000 in March last year to $161,500 this year and outstripping the rest of the Hawke's Bay... Read more

Kiwibank has advised that they are cutting home loan rates for two fixed terms. These cuts will make them more rate-competitive against their main big-bank rivals, but will not give them a market-leading position anywhere. The changes will become effective on Monday, April 20, 2015... Read more

This morning Westpac lowered some key home loan rates. It has added a new fixed rate 18 month 'special' of 5.34% which is -75 bps lower than their previous 18 month rate... Read more

AFAs slow to update DIMS status. Almost 1000 authorised financial advisers still need to decide how they will proceed with DIMS under the new Financial Markets Conduct Act obligations.... Read more

Hancock Forest Management (NZ), the local division of the world's largest timberland investment manager, is confident about the outlook for New Zealand timber... Read more

Dairy shares dip after global auction registers another price fall... Read more

As industry body DairyNZ prepares farmers for the consequences of depleting cash flows, a Lincoln University economist has said the fall in milk prices is the best thing that could happen because it will limit European expansion. DairyNZ have produced a cash flow projection for the coming season which paints a dire picture for farmers... Read more

John Williamson, managing director of Hellaby Holdings, will step down at the diversified investors' annual meeting after nearly eight years with the company. Shares of Hellaby last traded at $3.27 and have gained 3.8 percent since the start of the year... Read more

Could this be Graeme Hart's last stand in New Zealand? The country's richest man, estimated to be worth US$7 billion ($9.1 billion) by Forbes, is gearing up for a transtasman sharemarket float of Carter Holt Harvey, tipped by market sources to be scheduled for June or July, which could value the business at up to $1 billion.... Read more

LIC and Lely enter R&D partnership in farm sensor technology... Read more

Pineapple Heads CEO crowdfunds $200k on PledgeMe... Read more

Bluelab Corp, which makes electronic metering and control devices to aid plant growth, will use a new research and development growth grant to speed up taking a new sensory product to market in the next year... Read more

Motorway tolls the preferred choice to fund Auckland's ambitious transport plan. Aucklanders would rather pay a $2 motorway toll than increased fuel taxes and rates to help fund a $12 billion shortfall over the next 30 years in the council’s ambitious transport network plans.... Read more

$850m Transmission Gully work about to start. Site enabling works on New Zealand's biggest new infrastructure project begin this month. David Low, Wellington Gateway Partnership chief executive, said initial works on the 27km $850 million Transmission Gully motorway job north of Wellington begin after Anzac Day in New Zealand's first public private partnership for a state highway project... Read more

Wellington Airport's revised fees 'just within' acceptable range of returns, regulator says... Read more

Air NZ to fly over 650,000 more domestic seats in FY16... Read more

Air NZ's Houston service paves the way for partnership with United Airlines, analysts say... Read more

TVNZ, TV3's Mediaworks, SKY and Spark-owned Lightbox look likely to go ahead with legal action against Internet Service Provider (ISP) CallPlus and By Pass Network Services - the company providing Global Mode technology which allows customers to access overseas television shows that would otherwise be blocked to New Zealand viewers... Read more

TV companies offer last chance to avoid legal action... Read more

The home-cooked success of recipe and ingredient delivery service My Food Bag has made Masterchef winner Nadia Lim New Zealand's first reality TV star millionaire. Lim's one-fifth stake in the two-year-old business is, according to Weekend Herald calculations, worth at least $3 million... Read more

The Returned and Services Association (RSA) needs to be wary of marketers hijacking Anzac Day for commercial gain, marketing experts say. The 100th anniversary of Anzac Day on April 25 has seen many companies trying to earn some goodwill from the commemorations... Read more

High-flying businessman Alex van Heeren has been ordered by the High Court at Auckland to pay US$25 million as an interim payment to his former business partner, Michael Kidd, and could be made to pay as much as US$50 million after losing a legal battle that has lasted almost two decades. The near 20-year legal battle by the two men involves the end of their lengthy and lucrative business partnership... Read more

Pensioner wins refund from gold trading firm PTT. Pensioner Mary Boyle has forgiven Steven Robertson since he repaid $29,000 she had handed over for a gold trading investment... Read more

The government must guarantee New Zealanders that Chinese engineers working on KiwiRail’s locomotives are at least receiving the minimum wage says Rail and Maritime Transport Union spokesperson Todd Valster. “Last year the Ministry of Business, Innovation and Employment launched an investigation into allegations that Chinese workers at the Hutt Railway Workshops were being paid as little as $3 an hour”... Read more

Opinion - Bryan Gaynor: Companies more transparent when they're listed. Ports of Auckland seems to have served the community better when its shares were available for the public to buy... Read more

Opinion - Vernon Small: Budget 'surplus' fades from view as Auckland property prices threaten... Read more

Opinion - Fran O'Sullivan: Housing warning should put PM on red alert. Failure to heed Reserve Bank’s words on possible crisis plain irresponsible... Read more

Opinion/Analysis - Diana Clement: Some helpful tips for those surviving on super... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket closed the week deep in the red despite modest rebounds in iron ore and crude oil prices. At the 4.15pm (AEST) official market close, the benchmark S&P/ASX200 index was down 69.6 points, or 1.17 per cent, at 5,877.9, while the broader All Ordinaries index fell 66.1 points, or 1.12 per cent, to 5,851.5.... Read more

The Australian dollar rose to its highest levels since the end of March today after data showed a surprisingly strong jump in employment. The Australian dollar was trading at US77.35c at 5pm (AEST). It was trading at US75.95c late yesterday.... Read more

Analysts approach peak pessimism on shares... Read more

‘A complete load of rubbish’: Economists hit out at negative gearing myths... Read more

Cost of living: Australia tops Deutsche Bank's global list of expensive countries... Read more

Foreign investors, not low interest rates, are the main reason for a rise in housing construction, according to ANZ. Record low interest rates have made buying a home more affordable and given the housing sector a boost, but that’s not the whole story, ANZ senior economist David Cannington said in a new report... Read more

Former board member says Government inaction forced RBA to make harsh cash rate cuts. Former Reserve Bank board member Professor Warwick McKibbin has criticised the Federal Government over its economic performance just weeks out from its all-important second budget... Read more

Extended WA trading hours on Sunday a 'good thing', Premier Colin Barnett says... Read more

Premiers cop GST spray from Barnett. Colin Barnett has delivered a withering spray at his fellow Commonwealth leaders in a joint press conference that was supposed to highlight their agreement on key issues.... Read more

Jobs growth a major challenge in Western Australia's post-boom economy... Read more

Sun sets on the west's iron ore boom years. Jobs are going, perks are getting trimmed, mines are closing – the sun is setting on the west's great iron ore boom. ... Read more

Shock and ore: Our top two mining billionaires have lost $25 billion in the bust... Read more

Canberra Casino’s billionaire owner is listing the business on the share market. Hong Kong tycoon Tony Fung’s Aquis Group will use Namibian focussed oil and gas explorer Discovery Resources to join the market through what is known as a backdoor listing... Read more

Discovery Resources is moving to the entertainment and casino business with its move to acquire the Canberra Casino.... Read more

Rio Tinto has defended the amount of tax it pays, denying its Singapore office is being used to minimise its tax bill. Rio chairman Jan Du Plessis was questioned at Rio's UK annual general meeting in London overnight about whether the company sells Australian iron ore through the lower taxing Asian city-state... Read more

Kibaran Resources says a $4.1 million discounted placement has closed oversubscribed. Kibaran shares were off half a cent, or 2.5 per cent, to 19.5 cents at 9.55am... Read more

Falling oil prices have caused a 24 per cent slide in quarterly sales for energy giant Santos, as it continues to cut costs. The country's second largest energy producer's revenue was $US825 million ($A1.06 billion) in the three months to March, down from $US1.09 billion in the December quarter, and 10 per cent lower than the March quarter of 2014. Santos shares gained three cents to $7.96.... Read more

AGL will shut its coal plants by 2050. AGL Energy’s new chief Andy Vesey has declared the company, one of the nation’s most prolific coal-fired power generation buyers of recent years, will not buy, expand or extend its current coal-fired portfolio and that it plans to close down its coal plants by 2050... Read more

RTG Mining raises $15M to develop DSO copper-gold project... Read more

Iron ore giant Fortescue Metals' roster restructure is likely to be replicated across the industry as weak prices force deep cost cutting. The world's fourth largest iron ore producer will introduce a two weeks on, one week off roster to urgently cut costs... Read more

Austal has secured an $11 million cost-plus-award-fee order against a previously awarded contract. Shares in Austal were off half a cent to $1.925 at 9.30am... Read more

Telstra's cost-cutting chief resigns. The man who led Telstra's cost and job cutting initiatives over the last five years has resigned from the telco to search for other non-executive opportunities. Robert Nason has been Telstra's head of business support and improvement since February 2010 when he joined the telco from Tabcorp, where he was head of its wagering business.... Read more

Rio exec named for OECD anti-bribery advisory group... Read more

Finbar cautious on Hedland site. Finbar has negotiated a clause into its contract to buy an oceanfront apartment site in Port Hedland allowing it to call off the $390 million project if sufficient pre-sales are not achieved. Finbar shares were off half a cent to $1.295 at 10.35am... Read more

Vocus Communications has purchased a 14.5 percent stake in managed hosting and telco provider Macquarie Telecom under an equity swap deal valued at $15.6 million.... Read more

Fatfish Internet Group values mobile games assets at $40M... Read more

Australia's newest listed biotech Proteomics International made an impressive debut on the ASX yesterday when it hit the boards at 2pm Sydney time.... Read more

Suncorp launches start-up insurance app into Aussie market. Suncorp has partnered with US start-up Trov to allow Australians to send on-the-go information about their possessions for insurance quotes direct to Suncorp from a mobile app... Read more

A small Brisbane manufacturer helping build Saudi Arabia’s new rail network has become the first SME to benefit from more flexible lending by Australia’s export credit agency. Tingalpa’s Unison Joints has obtained $450,000 from the Export Finance and Insurance Corporation (Efic) that will allow it to expand its burgeoning business supplying expansion joints to big infrastructure projects in the Middle East... Read more

Automotive Holdings Group has cracked the ton with the establishment of its 100th dealership nationwide. AHG announced this morning it had been granted a franchise to establish a new Mazda dealership in Brisbane... Read more

Analysis - Ian Verrander: Andrew Forrest's call for iron ore production curb not heeded at Fortescue... Read more

Opinion - Malcolm Maiden: Rio's Walsh lays it bare: the weak are on their own.... Read more

Opinion - Andrew Leigh: Toughen up tax for the big end of town. We need fresh policy ideas to ensure everyone in Australia -- especially our big multinationals -- pay a fair share of tax.... Read more

Opinion/Analysis - Matt Wade: Australian business makes slow progress in fastest growing economy... Read more

International Headlines

U.S. Market Report: Wall Street tumbled on Friday, with the major indexes down one percent or more, on investor concerns over new regulations in China, Greece's debt negotiations and disappointing earnings reports from U.S. corporations. All ten major S&P 500 sectors lost ground, with the S&P Financials index .SPSY losing 1.24 percent and the S&P Consumer Discretionary index .SPLRCD off by 1.27 percent... Read more

North/South Americas Market Report: North and South American markets finished mixed as of the most recent closing prices. The IPC gained 0.02%, while the Bovespa led the S&P 500 lower. They fell 1.32% and 1.13% respectively... Read more

European Market Report: European markets finished broadly lower today with shares in Germany leading the region. The DAX is down 2.58% while France's CAC 40 is off 1.55% and London's FTSE 100 is lower by 0.93%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 2.20%, while the Nikkei 225 led the Hang Seng lower. They fell 1.17% and 0.31% respectively... Read more

Brent crude seesawed, while U.S. crude fell on Friday after both contracts rallied to 2015 peaks the previous session, and turmoil in Yemen and the region limited losses... Read more

U.S. consumer prices increased for a second straight month in March on rising gasoline and housing costs, a sign of an uptick in inflation that should keep the Federal Reserve on course to start raising interest rates this year. March's broad-based price gains bolster the U.S. central bank's long-held view that inflation will gradually move toward its 2 percent target as the dampening effect of lower energy prices fades... Read more

The Bloomberg trading platform used by millions of market and currency traders around the world is back online after suffering an embarrassing outage that lasted several hours. Global financial markets around the world depend on Bloomberg and to a lesser extent other programs to trade shares, bonds, currencies and other products... Read more

U.S. Antitrust Lawyers Said Leaning Against Comcast Deal. Staff attorneys at the Justice Department’s antitrust division are nearing a recommendation to block Comcast Corp.’s bid to buy Time Warner Cable Inc., according to people familiar with the matter... Read more

GE industrial first-quarter profit rises, revenue falls on stronger dollar. GE shares dipped 0.1 percent to $27.26 in morning trading on the New York Stock Exchange, against broader declines for U.S. stocks... Read more

Warren Buffett on track to lose more than $1 billion on his Dow stocks in one day... Read more

Honeywell International Inc, a major manufacturer of aircraft electronics and climate control systems, reported a 5 percent fall in quarterly revenue on Friday, hurt by the sale of its friction materials business and a strong dollar... Read more

Verizon to Offer Slimmer TV Channel Packages to Battle Streaming Rivals... Read more

Microsoft Corp on Friday unveiled a long-awaited suite of touch-friendly Office apps that allow Windows phone users to work on Word, PowerPoint and Excel documents on their phones with touch commands and to transfer them easily between devices... Read more

Shoppers Carry Canada Through Oil Shock Ratifying Poloz Optimism. Canadian shoppers who kept the economy going during the 2008 financial crisis and the recession that followed are coming through again.... Read more

Apple Inc is planning to launch its electronic payments service in Canada in November, the first international expansion of Apple Pay, the Wall Street Journal reported, citing people familiar with the matter. The iPhone maker is in talks with Canada's six biggest banks, Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce and National Bank of Canada, the people told the Journal... Read more

New York Times Co. Elevates Meredith Kopit Levien to Chief Revenue Officer... Read more

The Group of 20 leading economies struck a hopeful tone on the outlook for global growth on Friday even as officials fretted that Athen's inability to strike a deal with its lenders could upset Europe's tentative recovery... Read more

Greece running out of time to avoid collapse. Markets are beginning to freak out over Greece, again. Three months after Athens promised to deliver a program of reforms in return for more bailout cash, little progress has been made and the risk of default is rising.... Read more

Greece starts assets sales with horse racing gambling license... Read more

Google's EU showdown offers openings to competitors. Start small, win quick, then move on to bigger issues. That appears to be the European Union's strategy to pursue Google in a competition dispute by choosing to push a narrow set of charges around its shopping service, while opening another investigation of Google's Android mobile phone software.... Read more

Greece would struggle to find creditors outside the EU and IMF, German finance minister Wolfgang Schaeuble has said. He said it would be welcome to try to find investment from Beijing or Moscow, but may have difficulties... Read more

EU telecoms reform to address competition from WhatsApp, Skype... Read more

Argentina has begun legal proceedings against three British and two US companies for drilling oil near the Falkland Islands. Daniel Filmus, Argentina's minister for the islands - called the Malvinas locally - announced the case in London... Read more

The head of the International Monetary Fund, Christine Lagarde, has endorsed the UK government's economic strategy. Speaking at an IMF meeting in Washington she said: "It's obvious what's happening in the UK has worked."... Read more

Rolls-Royce wins $9.2 billion order from Emirates for A380 engines... Read more

UK unemployment has fallen to its lowest rate since July 2008, official figures have shown. The number of jobless people dropped by 76,000 to 1.84 million in the three months to February, the Office for National Statistics said on Friday... Read more

Volkswagen CEO Martin Winterkorn has survived a challenge from powerful chairman Ferdinand Piech, but their row remains a distraction for the carmaker as it struggles to boost profits and revamp its ailing U.S. business. VW shares jumped over 2 percent on the news that Winterkorn was staying, but soon fell back and were trading 1.2 percent lower by late afternoon. They have fallen 5 percent since the row erupted a week ago... Read more

Chinese stores boost Russian cross-border online trade by 70 percent... Read more

Russia's economy could return to growth in less than two years, president Vladimir Putin says, even though he considers it unlikely that the West will lift economic sanctions over the Ukraine crisis soon. In a televised call-in with the nation, Mr Putin acknowledged that there were difficulties for Russia's economy, which has been hit by a fall in global oil prices as well as sanctions.... Read more

Brazil's Petrobras to release audited financial earnings... Read more

Saudi Arabia's stock market regulator says foreign investors will be allowed to trade shares on the oil-rich kingdom's exchange beginning on June 15.... Read more

Teva Pharmaceutical Industries is considering a takeover bid for drug maker Mylan, according to people familiar with the matter, a sign of the jockeying for dominance among generic drug makers. The Israeli generic drug maker hasn't yet decided whether to make an offer, the people said. Last week Mylan made an unsolicited $US28.9 billion proposal to buy Ireland-based Perrigo, and a Teva bid would represent an effort to disrupt that... Read more

Coke to buy China multi-grain drinks maker for $400 million... Read more

China ETFs Plunge in New York on Measures to Curb Margin Trading... Read more

India’s TCS Sets Up Social Platform for Company Communication... Read more

India’s Minimum Alternate Tax. Even as India tries to convince investors it won’t pursue “tax terrorism,” a new set of tax demands by the government is causing a furor among investors and tax experts. Lawyers and accountants say that Indian tax department officials have approached dozens of investors, asking them to pay the so-called Minimum Alternate Tax, which these investors haven’t had to pay before... Read more

Opinion/Analysis - Larry Elliot: Why the British jobs recovery has not brought bulging pay packets. Weaker unions and lower inflation have coincided with a structural change that has resulted in an increased supply of labour... Read more

Opinion - Supratim Adhikari: The $22bn telecom mega-merger. It was merger that was bound to happen sooner or later and the 15.6 billion euro ($22ob) marriage of Nokia and Alcatel-Lucent promises to make a substantial impact on the telecom market.... Read more

Opinion/Analysis - Thomas H Kee Jnr: Market risks abound but we’re not in a correction — yet... Read more

Opinion - Fergus Ryan: China's Great Cannon could backfire... Read more

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