ASB Securities Morning Brief for Saturday, 30 July 2016
Saturday, 30 July 2016

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose to a fresh record, led by Comvita and Fletcher Building. The S&P/NZX 50 Index rose 49.26 points, or 0.7 percent, to 7,355.61. Within the index, 26 stocks rose, 16 fell and nine were unchanged. Turnover was $164 million... Read more

The New Zealand dollar fell against the yen after the Bank of Japan announced additional monetary stimulus measures that were more modest than some in the market were expecting, driving up its currency. The kiwi fell to a three-week low of 73.10 yen and was at 73.33 yen at 5pm in Wellington, from 74.45 yen late yesterday, after the Bank of Japan kept its policy rate at -0.1 percent while almost doubling its target for purchases of exchange-traded funds. The currency traded at 70.88 US cents, down from 71.11 cents yesterday. The kiwi is heading for a 1.1 percent weekly gain... Read more

New Zealand business confidence dropped in July, a movement ANZ New Zealand economists said was largely seasonal, as construction remained positive while residential investment intentions surged. A net 16 percent of firms surveyed in the ANZ Business Outlook expect better economic conditions in the coming year, down from a net 20 percent in June, while a net 31 percent thought their business would do better, compared to 35 percent a month earlier... Read more

Statistics New Zealand will delay publishing the household labour force survey by two weeks to ensure the report meets standards after it modified the series this year. The official labour force statistics were due to be released next week but are now scheduled to be published on Aug. 17, the government department said in a statement. The labour cost index, which measures wage inflation, and the quarterly employment survey will still be published on Aug. 3... Read more

Housing supply pipeline gets a boost as new data reveals the highest level of new dwelling consents nationwide in over a decade.... Read more

Traders make $1600 a day in Auckland's runaway housing market and many homes are on-sold within two weeks. Speculators, investors and homeowners cashing in on Auckland's rampant property market made close to a $200 million capital gain in under 18 months... Read more

Rarely used land tax rule could catch gains from sales of land rezoned in the Unitary Plan.... Read more

Mainfreight executive chairman Bruce Plested has advocated a capital gains tax to take the steam out of an overheated housing market and urged the government to treat teachers as "true professionals" paid on the basis of performance. The transport group chairman used his address to shareholders at their annual meeting in Auckland yesterday to give his recipe for lifting New Zealand's economic and social game by tackling issues such as education and housing affordability. The transport group chairman used his address to shareholders at their annual meeting in Auckland yesterday to give his recipe for lifting New Zealand's economic and social game by tackling issues such as education and housing affordability... Read more

Fisher Funds sounded a note of caution to shareholders in the listed Kingfish investment firm it manages, that returns this financial year are likely to be lower than the previous year, particularly if any companies report earnings that disappoint investors in the over-valued New Zealand sharemarket. Kingfish finished the 2016 financial year strongly with a net profit of $22.5 million, up 89 percent on last year. The portfolio of 21 New Zealand high growth companies returned 12.9 percent after adjustments for fees, tax, the 10.6 cents per share dividend and warrants exercised, which compares to 15.7 percent for the S&P/NZX 50 Index over the same period.... Read more

Solvency key for self-employed borrowers. Cash flow should always be king for self-employed borrowers and advisers need to remember that, according to an ANZ business expert.... Read more

Challenges facing the dairy industry are taking their toll on farmers, Federated Farmers West Coast provincial president Peter Langford says. "Farmers are pretty subdued right now. There's no optimism of a high payout coming along soon. Most are resigned to the fact it's not going to be good for at least two years -- if they can survive that long," Mr Langford, a Karamea dairy farmer, said... Read more

Canadians are continuing to buy into New Zealand dairy farming with the purchase of a property in the Maniototo, Otago. Last year a report by KPMG showed Canadian investors were the biggest foreign investors in New Zealand in 2014 with 22 per cent of total investment. Despite media attention over Chinese investment, they accounted for only 14 per cent. The sale of the 918 hectare Maniototo farm to a Canadian government pension fund has been approved by the Overseas Investment Office (OIO)... Read more

New Zealand wool prices gained at yesterday's South Island auction on increased demand and a wide selection of wool on offer... Read more

Tararua farmers ponder hemp option as a new cash crop. Industrial hemp crops could be grown across the Tararua district as the council looks for alternative farming ventures. Manuka, saffron, flax, feijoas, hazelnuts and now hemp have been identified as suitable crop options for the district, as part of the Go Project by the Tararua District Council.... Read more

Todd Corp has gained approval to sell its 20 percent stake in the Golden Cross joint venture, which ran a gold mine in Waikino until 1997, to Coeur Gold, its former partner in the project... Read more

Oceanagold Reports Second Quarter 2016 Operational And Financial Results... Read more

Investors in New Zealand Oil & Gas are pressing the company to resume paying dividends now that it is profitable again and generating imputation credits. In briefings for investment analysts and media on the Wellington-based company's June quarter cash-flow and production reports, NZOG chief executive Andrew Knight said it was a subject the board "debates regularly", although there was no announcement he could make at present... Read more

Veritas says earnings fell within guidance. Veritas Investments says annual earnings declined as expected and it will provide more detail of how its three food and beverage businesses are tracking when it formally reports next month. Veritas shares were unchanged at 43 cents, having dropped 10 percent so far this year.... Read more

Moa stresses it has no undisclosed plans. Shareholders of NZX-listed beer-maker Moa Breweries have been assured again that the company has no "specific plans for corporate activity to talk about". Moa chairman Ashley Waugh used his speech to the annual meeting in Auckland to reiterate the company's message after the exchange operator issued a 'please explain' notice on July 13 following a 47.5 percent jump in the share price to 87 cents. The shares were trading up slightly at 90 cents today, having listed at $1.25 in 2012... Read more

Blis Technologies chief executive Brian Watson says the company will produce a maiden profit next year. He told shareholders at the annual meeting in Dunedin that the NZX-listed company expects to make a $700,000 profit before tax for the year to March 31, 2017 on revenue of $8 million. But no dividend would be paid next year as directors review future capital requirements.... Read more

Bethunes Investments, formerly known as Mowbray Collectables, will look to raise new capital if it can successfully find an investment opportunity to execute. Chairman Chris Swasbrook told shareholders at today's annual meeting in Auckland that the company has made its first investment into an ASX-listed company and has been buying shares when opportunities present themselves. The shares last traded at 0.5 cents, having plunged 71 percent so far this year to value the company at $575,000.... Read more

Sky TV threatens court action over Rio coverage. Sky TV is threatening to take Fairfax Media and NZME to court over coverage of the Rio Olympics despite neither media outlet sending reporters to the Games. The pay-TV company, which paid the International Olympic Committee millions of dollars for the rights to cover the Games, sent Fairfax (publisher of Stuff) a legal letter on Friday afternoon... Read more

Fletcher Building paid $12 million below the flagged purchase price to buy rival construction company Higgins Group Holdings after dropping Horokiwi Quarries from its application to reduce its dominance in the aggregates market. Fletcher shares rose 1.3 percent to $9.58, having gained 29 percent so far this year.... Read more

Property, particularly commercial property, is a road to riches for many of New Zealand's wealthiest. According to this year's National Business Review rich list, out this week, many of those worth at least $50 million got their start in the property game, and still more have entered after making their money through other businesses... Read more

Carter Holt Harvey has lost its final bid to throw out a claim that it's liable for the cost of fixing about 890 leaky schools, with the Supreme Court siding with the Ministry of Education. Chief Justice Sian Elias and Justices William Young, Susan Glazebrook, Terence Arnold and Mark O'Regan today dismissed Carter Holt's application to strike out a claim that the building products maker was negligent in the way it sold plywood cladding product, known as Shadowclad, which the ministry says caused weather-tightness problems at a large number of schools... Read more

Leaky-building specialist, Dan Parker from Parker & Associates said the Supreme Court’s decision today in the Carter Holt versus Minister of Education appeal is good news for leaky-home owners.... Read more

A convicted thief and arsonist has been told to stay away from any business dealings after the collapse of his Canterbury concrete firm. Tony Clifford King's business, Titan Concrete, which he set up about five months after being released from prison last year, is in receivership, and owes about $260,000, mainly to unsecured creditors... Read more

Maori trust to pay $10,000 to worker who was sacked for making false claims... Read more

2degrees tells customers to restart phones after nationwide outage... Read more

Opinion/Analysis - Brian Gaynor: KiwiSavers throw away thousands of dollars... Read more

Opinion - Geoff Simmons: Inevitable NIMBY backlash begins. With a residents association representing existing property owners in a leafy suburb threatening legal action, and wealthy residents in the coveted Paritai Drive expressing outrage, the battle lines for the Unitary Plan are drawn... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket has recorded its best July in six years after its winning run extended to five days on Friday. At the closing bell, the benchmark S&P/ASX 200 index edged up 5.7 points, or 0.1 per cent, to 5,562.3, while the broader All Ordinaries index tacked on 7.2 points, or 0.13 per cent, to 5,643.9.... Read more

The Australian dollar has fallen against its US counterpart as the greenback staged a minor rebound. At 0700 AEST on Friday, the local unit was trading at 75.04 US cents, down from 75.31 cents on Thursday.... Read more

Australia headed for recession next year, Professor Steve Keen says. Australia's credit binge will lead to a bust as soon as next year, with house prices to fall between 40 and 70 per cent and unemployment to rise sharply, Professor Steve Keen says. The professor famously lost a bet when he predicted a catastrophic crash in Australian house prices following the GFC and had to walk from Canberra to Mount Kosciusko as a result... Read more

Reporting for duty: Investors to hunt for value amid tight earnings. Diminishing dividends by the global miners and a pull-back in profits by the big banks are on the cards as reporting season gets underway next week... Read more

Transport plan for Perth with 3.5m people. New train lines and freeways, an inner-city subway and more bridges across the river — including several specifically for bikes — are part of the Barnett Government’s long-awaited transport plan that was released today. The plan is designed to prepare Perth for a population of 3.5 million people, which is expected around 2050... Read more

The 100,000 West Australians who manage their own superannuation have been rocked by research showing half will be hit by the Turnbull Government’s tinkering with nest eggs. Investigations by the Self-Managed Superannuation Fund Association and research house Accurium also revealed:... Read more

Life insurance 'churning' widespread as reforms loom. Financial advisers can pocket a commission of up to 130 per cent for recommending a client switch life insurance policies. According to critics, this leads to widespread 'churning' of policies... Read more

Northern Minerals Ltd is preparing to reveal details of new funding, with the ASX granting the company a trading halt to prepare... Read more

Plymouth Minerals Ltd has been granted a trading halt by the ASX, pending details of a capital raising. Plymouth recently dialled into lithium in Spain... Read more

Hammer Metals Ltd heads to market to explore Mount Isa province... Read more

Chevron, struggling to complete construction of more than $100 billion worth of LNG projects in WA, has raised almost $4 billion in new equity from its US parent in just six months to survive its giant cash squeeze. With money flooding out the door faster than expected, the double whammy of negligible cash flow from Gorgon — which has shipped just two LNG cargoes — at a time of depressed oil and gas prices is causing grief even for a company the size of Chevron, which is valued at $US193 billion ($255 billion)... Read more

Origin Energy's full-year production is up 57 per cent to 231.5 petajoules, helped by the startup of its Australia Pacific liquefied natural gas project in Queensland. Origin, which supplies gas from its coal seam wells to the Conoco Phillips-operated APLNG project, said revenue for the full year to June 30 rose 15 per cent to $1.08 billion. Origin shares closed down 18 cents, or 3.2 per cent at $5.50.... Read more

Supercomputers deliver $665 million savings in BHP hunt for oil... Read more

Blaze International Ltd has been granted a trading halt by the ASX, pending details on a lithium acquisition.... Read more

Broken Hill Prospecting Ltd has extended the closing date of its Share Purchase Plan (SPP) as the company continues to receive application enquiries from shareholders. The offer will now close on Friday 12th August 2016. The SPP is priced at $0.081, and allows shareholders to buy up to $15,000 worth of shares... Read more

Minerals sands group Iluka Resources is in advanced talks for a $400 million-plus takeover of London-listed, African miner Sierra Rutile. Iluka disclosed the talks today as it requested a trading halt, saying it believed the confidentiality around the discussions had been lost... Read more

Oklo Resources Ltd appoints Michael Fotios as chairman... Read more

Aurelia Metals appointed Jim Simpson as managing director from August 1, 2016 and will also assume the role of CEO from September 1... Read more

Paringa Resources Ltd has successfully completed the bookbuild for a placement of shares at $0.17 each to investors in Australia and the U.S. to raise $6,494,000. The proceeds from the placement will be used to complete the bankable feasibility study (BFS) and commence development of the Buck Creek No.2 Mine in Western Kentucky, U.S.A... Read more

Struggling oil and gas services company MMA Offshore has warned of a $140 million non-cash impairment on the carrying value of its assets in its full-year results.... Read more

Victory Mines Ltd is preparing to outline developments in the 100% acquisition of Milestone Sports.... Read more

IODM Ltd partners with startup lab to promote debtor management platform... Read more

LandCorp has signed a deal with Lendlease to begin work on developing a 145ha site at Alkimos on the coast north of Perth for a residential development. The development, to be known as Alkimos Central, will eventually be home to 4650 people... Read more

Seafarms leases Kununurra accommodation village. Seafarms Group continues to ramp-up planning for its massive prawn-focused aquaculture project across Australia’s north by securing a leasing agreement for an accommodation village in Kununurra. The company announced today it had secured a five-year lease with the WA Department of Regional Development for the 230-person Garrjang Accommodation Village.... Read more

Troubled dairy co-operative Murray Goulburn has lost its contract to supply supermarket giant Woolworths with private-label cheese, UHT, adult milk powder and cream to smaller rivals Bega Cheese and Freedom Foods. Murray Goulburn will lose $108 million in annual revenue, which equates to about 3.75 per cent of the $2.87 billion it took in 2015... Read more

iSentric Ltd has posted record cash receipts of $3.35 million for the June 2016 quarter, a 120% increase over the previous corresponding period. The company acquired 2.43 million new paying users during the quarter in the Digital and Media Services segment in Indonesia, which is ahead of the 1.5 million forecast for the quarter... Read more

Fertoz Ltd has been granted a trading halt by the ASX, to finalise a book build in relation to a private placement capital raising.... Read more

CIMIC Group's 50% owned subsidiary Venetia has extended its Telstra contract for the delivery of wideband services across Australia... Read more

Telstra continues to hoover up the lion’s share of the NBN wholesale market but the Australian Competition and Consumer Commission boss Rod Sims it’s too early to declare the incumbent telco the winner at this stage. The latest instalment of the competition watchdog’s NBN Wholesale Market Indicators Report shows Telstra extending its lead in the quarter ending June 30, with the incumbent holding a wholesale market share of 48.2 per cent... Read more

ACCC introduces new regulation. TPG and Telstra will be forced to open up their high-speed broadband networks to retail service providers under a new ACCC access declaration... Read more

Vodafone’s Australian business has trimmed its first-half loss by a quarter, to $137 million, and lifted customer numbers as its hefty investment in its mobile network continue to pay off. Australia’s third-largest mobile phone provider after Telstra and Optus on Friday said it has boosted its total customer base to 5.5 million, up 4.5 per cent from June 30, 2015... Read more

ANZ Bank is looking to sell off its online share trading platform in favour of a move to a third-party provider, the bank confirmed today following months of speculation. The bank rebadged the 18-year-old online stockbroker several months ago from E*Trade to ANZ Share Investing in what was widely speculated to be preparation for an eventual sale... Read more

Cardinal House Group, an online gaming company being taken over by ASX-listed FE Limited, has announced a pair of agreements which will connect Australians with global online betting markets. Cardinal has signed a binding agreement with one of Europe's largest secondary lotteries providers, Gibraltar-based Winners Management Limited, which enable Australians online access to European lotteries, including EuroMillions, The UK National Lottery and Germany's Lotto 6aus49... Read more

BuildingIQ Inc has launched the 5i energy intelligence platform, following the acquisition of the technology from Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO). The 5i cloud-based platform helps building operators lower energy use, by utilising intelligent predictive analysis and optimising automated control... Read more

About 250 WA business leaders from a range of industries gathered together yesterday for WA’s first innovation summit. In a collaborative attempt to figure out a five-year innovation strategy after the State Government's recently announced $20 million innovation fund, the summit covered a range of topics with the 22 individual discussion groups generating about 780 ideas.... Read more

ASIC: $20 trillion worth of financial products may be affected by BBSW rigging. The corporate watchdog says $20 trillion worth of financial products may have been affected by alleged manipulation of a key interest rate at three of Australia's biggest banks. The Australian Securities and Investments Commission said the Bank Bill Swap rate - known by the acronym BBSW - had far-reaching effects in the market.... Read more

Australia's corporate watchdog has alleged internet search company Uglii's multibillion-dollar earnings projections are a sham and the existing managers should be removed to protect shareholders and creditors. Counsel for the Australian Securities and Investments Commission, Michael Pearce, QC, told a Federal Court hearing on Friday the Victorian firm was a house of cards built on wildly inflated and untested claims by chief executive John Knorr... Read more

A former ANZ trader says he was threatened and told he would be made a scapegoat over a rate-rigging scandal that has dragged in Australia's biggest banks. The trader, Etienne Alexiou, said he believed he was dismissed as part of a strategy by ANZ to manage the fallout from allegations it tried to rig a key interest rate called the bank bill swap reference rate (BBSW)... Read more

Opinion/Analysis - Sarah Danckert: After the High Court threw out the ANZ bank fee case are class actions cactus?... Read more

International Headlines

U.S. Market Report: Wall Street rose on Friday, with the S&P 500 index hitting a record intraday high for the seventh time this month as gains in technology heavyweights Alphabet and Amazon more than made up for losses in energy shares... Read more

North/South Americas Market Report: North and South American markets finished broadly higher today with shares in Brazil leading the region. The Bovespa is up 1.13% while U.S.'s S&P 500 is up 0.16% and Mexico's IPC is up 0.05%... Read more

European Market Report: European markets finished higher today with shares in Germany leading the region. The DAX is up 0.61% while France's CAC 40 is up 0.44% and London's FTSE 100 is up 0.05%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 0.56%, while the Hang Seng led the Shanghai Composite lower. They fell 1.28% and 0.50% respectively... Read more

Oil giant Exxon profits crash 59% to 17-year lows... Read more

U.S. Economy Grew Less-Than-Forecast 1.2% in Second Quarter... Read more

Two University of California, Berkeley professors have taken a deep dive into new data and found that claims in Michael Lewis' bestseller "Flash Boys" that retail investors are being gouged, or "front-run," by high-speed traders not to be true - at least not now. Professors Robert Bartlett and Justin McCrary said their findings contradict the common belief that fast traders systematically exploit others who rely on public data feeds, which in the past were notoriously slow... Read more

Hillary Clinton's plans for the economy would boost growth and create millions of jobs, according to a new analysis. Moody's Analytics estimates that if the Democratic presidential nominee's proposals are enacted, the economy would create 10.4 million jobs during her presidency, or 3.2 million more than expected under current law.... Read more

Google parent Alphabet Inc and e-commerce giant Inc capped a blockbuster June quarter for the five biggest U.S. tech companies as their dominance in key markets helped them defy the "law of large numbers". Apple Inc, Microsoft Corp and Facebook Inc, as well as Alphabet and Amazon, all blew past Wall Street expectations for both profit and revenue... Read more

Mark Zuckerberg and Jeff Bezos have put legendary Warren Buffett in their rearview mirror. For the first time ever, Facebook and Amazon are now each worth more than Buffett's Berkshire Hathaway ... Read more

Forget Snapchat. Facebook's biggest threat right now may be Uncle Sam. Facebook disclosed on Thursday that it could owe billions due to an IRS investigation into the way it moved assets to an Irish subsidiary to avoid higher taxes.... Read more

Cheers! It looks like the Bud-Miller mega merger is finally going to happen. It's been nearly a year in the making but the biggest ever beer deal cleared its last major hurdles Friday as SABMiller's board accepted an improved £79 billion ($105 billion) takeover offer from Anheuser-Busch InBev. Regulators in China also gave the deal the thumbs up... Read more

'Sell everything,' DoubleLine's Gundlach says. Jeffrey Gundlach, the chief executive of DoubleLine Capital, said on Friday that many asset classes look frothy and his firm continues to hold gold, a traditional safe-haven, along with gold miner stocks. Noting the recent run-up in the benchmark Standard & Poor's 500 index while economic growth remains weak and corporate earnings are stagnant, Gundlach said stock investors have entered a “world of uber complacency.”... Read more

Delaware judge proposes October trial over removal of Viacom directors... Read more

Venezuela's new decree: Forced farm work for citizens. A new decree by Venezuela's government could make its citizens work on farms to tackle the country's severe food shortages. That "effectively amounts to forced labor," according to Amnesty International, which derided the decree as "unlawful."... Read more

Eurozone economic growth halved in the second quarter, but the 19-nation single currency area moved away from deflation. GDP rose by 0.3% between April and June, in line with expectations but below 0.6% growth in the first quarter. France, the eurozone's second-largest economy, saw no growth after expanding by 0.7% in the first quarter.... Read more

Swedish economic growth continued to slow in the second quarter, adding to evidence that the country’s output boom may have peaked. Preliminary data from Statistics Sweden on Friday showed gross domestic product grew a quarterly 0.3 percent in the three months through June, well below last year’s average of 1.2 percent and just half the estimate in a Bloomberg survey of economists. Growth in the first quarter was revised down to 0.4 percent from 0.5 percent. The annual expansion rate in the second quarter was 3.1 percent... Read more

UK exports grow faster than global rivals for first time since 2006 as businesses target non-EU markets... Read more

Profits at Barclays fell by 21% in the first half of the year as the bank set aside a further £400m to compensate customers mis-sold payment protection insurance (PPI). Profits for the six months to 30 June fell from £2.6bn last year to £2bn. The new charge for PPI means the mis-selling scandal has so far cost Barclays a total of £7.8bn... Read more

RBS Group performed poorly in the latest European stress tests which assess how the banks might perform in adverse economic conditions. The health check of 51 lenders in the EU were carried out by the London-based European Banking Authority... Read more

UK mortgage approvals fall to one-year low in June. Bank of England has said it expects credit growth to ease in the second half of this year, with interest rate cut likely... Read more

Deutsche Bank AG is dipping back into an area of the credit derivatives market in Europe that it all-but pulled out of in 2014. Germany’s largest lender has resumed trading options on credit-default swap indexes for the first time in more than 18 months, according to two people familiar with the matter, who asked not to be identified because they’re not authorized to speak about it... Read more

Monte dei Paschi mulls rescue bids as EU banks await stress-test results... Read more

Former Irish Bankers Go to Prison After Longest Trial. Three former senior Irish bankers were sentenced to a total of more than eight years in prison in Dublin after being convicted of conspiring to defraud customers and investors during the financial crisis... Read more

What's holding up Iran's big airplane deals? Iran's grand plan to buy aircraft from Boeing and Airbus is stalling. State-run Iran Air signed an agreement to buy 80 Boeing passenger airplanes last month, the first major deal between a U.S. company and Iran since sanctions were lifted earlier this year. That followed a huge Iran Air deal for 118 aircraft from Boeing (BA)'s European rival Airbus (EADSF) in January... Read more

530,000 steel and coal workers are now driving for China's Uber rival... Read more

Sony warns over falling smartphone sales, strong yen... Read more

Is Bank of Japan signaling that it’s running out of ammo? The Bank of Japan on Friday disappointed investors by offering up a much smaller-than-expected round of additional stimulus while also announcing a review of its current policy measures, leading some observers to wonder whether policy makers fear they are running out of tools to stoke the Japanese economy.... Read more

Japan's core consumer prices fell for a fourth straight month in June, dealing a fresh blow to the country's faltering war on deflation, official data showed Friday... Read more

The pharmaceutical arm of Chinese conglomerate Fosun plans to buy a majority stake in India's Gland Pharma Ltd. for as much as $1.26 billion, in what is being touted as the biggest Indian acquisition by a Chinese company. Hong Kong-listed Shanghai Fosun Pharmaceutical Group will take an 86.08 percent stake in the drugmaker if the purchase completes, according to a filing to the Hong Kong stock exchange Friday... Read more

Opinion - Jason Notte: Taxpayers revolt against paying hundreds of millions of dollars for sports stadiums... Read more

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