ASB Securities Morning Brief for Monday, 30 March 2015
Monday, 30 March 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose, paced by Fonterra Shareholders' Fund as the stock rebounded from a record low. Outside the benchmark index, Hallenstein Glassons advanced after reporting a 40 percent jump in first-half profit. The NZX 50 Index rose 21.08 points, or 0.4 percent, to 5854.248. Within the benchmark index, 22 stocks rose, 19 fell and nine were unchanged. Turnover was $106 million... Read more

The New Zealand dollar gained against its Australian counterpart on sliding prices for iron ore exported to China, that nation's biggest market, while traders await a speech by US Federal Reserve chair Janet Yellen on Friday in the US. The kiwi rose to 97.13 Australian cent as at 5pm in Wellington, from 96.98 cents yesterday. It was little changed at about 75.80 US cents... Read more

Targeting 2 percent annual inflation could force the Reserve Bank of New Zealand to cut interest rates too sharply and overheat the economy, says Bank of New Zealand, which suggests current low global inflation rates mean the local target is "unreasonably high in the current climate."... Read more

A plunge in property prices is a key risk factor for banks in New Zealand, according to a new report from Standard & Poor’s. In “Asia-Pacific Banking Sector Outlook 2015: Six Shape Shifters That May Reset The Region's Course”, the financial services company discusses the key factors it believes will determine the future for banks in the Asia-Pacific region... Read more

Rents in Auckland rise up to 10%... Read more

The unfairness of drought has some dairy farmers recording their best milking year on irrigated Canterbury farms and other dryland farmers drying off cows before the season ends. Neither group will be happy about a lower dividend and a milk price forecast of $4.70 a kilogram of milksolids confirmed by Fonterra this week... Read more

Kiwifruit industry set for strong growth in 2015 season. The first kiwifruit charter ship for 2015 is set to sail from the Port of Tauranga tomorrow (Sunday 28 March), marking the start of a season promising strong growth with volumes back to pre-Psa levels this season, Zespri’s Chief Executive Lain Jager says... Read more

New Zealand whole milk powder futures dropped after Fonterra Cooperative Group said it will increase the volume of product it puts up for sale on the GlobalDairyTrade platform, suggesting prices may extend their decline in next week's auction... Read more

The state owned farmer Landcorp last month reported a substantial drop in both revenue and profit for the six months ended 31 December last year, but CEO Steve Carden is still very positive about future prospects and the importance of Landcorp as a farming business... Read more

Major companies are putting big money into Lincoln University's growing demonstration and research farms base. In the past 18 months the university has added 1000 hectares of North Island land to the farm portfolio it owns or manages... Read more

NZX launches three new ETFs... Read more

CBL Insurance appears to be forging ahead with its sharemarket listing plans, with talk of a potential float raising as much as $120 million and valuing the company at $300 million to $400 million. The Auckland-based company describes itself as New Zealand's largest credit surety and financial risk insurer... Read more

$80m hi-tech tower to replace Wellington's BP House... Read more

Oil and gas sector leaders meet in Auckland today as the industry confronts depressed global prices and conference delegates face protests from environmental activists. Sub-US$50 a barrel oil will, according to one analyst, be the "elephant in the room" at the Advantage New Zealand Petroleum Summit where security has been beefed up after protests at a similar event in October... Read more

Building smarter, stronger and cleaner is essential if Christchurch wants to take advantage of the opportunities of the rebuild, industry leaders said at the Seismics in the City conference last week. Almost two hundred business, community and political leaders gathered in Christchurch on Friday discuss how the the city's rebuild was progressing... Read more

Forty-six thousand business owners have signed up for an ACC product that allows them to shrink their tax bills without losing accident cover if they are injured. ACC usually assesses compensation based on people's taxable incomes, meaning business owners can be stung if they report less income to Inland Revenue than what they really live on... Read more

Auckland Mayor Len Brown wants Ports of Auckland to delay the start of its wharf extensions so there’s some “breathing space” after public protests against their construction... Read more

Cash-strapped KiwiRail is proposing to replace electric trains with more diesel-powered engines - a move which will horrify environmentalists and could see the loss of hundreds of jobs. Fairfax Media has learned of cost-saving plans to buy a dozen more diesel locomotives from China, to replace ageing electric trains on the 680km-long Wellington-Auckland railway... Read more

Ngapuhi settlement negotiators appointed. Three prominent Ngapuhi have been appointed as negotiators for the historic Te Tiriti o Waitangi settlement negotiations to begin soon between the Tuhoronuku Independent Mandated Authority (Tuhoronuku IMA) – representing all Ngapuhi – and the Crown. The three negotiators are:... Read more

Mark Petrie felt slightly uncomfortable near front and centre in media headlines in the last week or so. Labelled the $26 million man given his equity and cash win from the sale of internet and telecommunications service provider Snap to mobile operator 2degrees, he says he has received plenty of congratulatory emails... Read more

A United States court has delivered another legal setback to Kim Dotcom with the United States Government winning a civil forfeiture case against the mogul. As a result Dotcom has lost an estimated $67 million worth of assets to the United States including millions in cash, property, luxury cars, jet skis, large screen televisions and art... Read more

Former directors of Feltex Carpets and promoters of its 2004 initial public offering have been awarded a scaled-up $3.1 million in costs after being found not liable for alleged disclosure failings in its prospectus. Once disbursements are included, total costs could rise to $5 million, before costs associated with the actual costs of the hearing... Read more

The former director and owner of a media placement agency, The Media Counsel, has been found guilty of fraud charges relating to $1.8 million in payments to media suppliers and client invoices. Glenda Mary Wynyard, 49, has been found guilty in the Auckland District Court today of 11 out of 13 Crimes Act charges laid by the Serious Fraud Office.... Read more

Opinion - Brian Gaynor: Our small NZX and why liquidity matters. Why is the NZX so small, what is its liquidity profile and why does liquidity vary on a day-to-day basis?... Read more

Opinion - Bernard Hickey: Deflation denial starts to hurt... Read more

Opinion - Terry Hall: Is the Lucky Country losing its lustre? Australia seems a bargain. Their dollar is worth about the same as ours - making it a great spot for a holiday. Anything you buy there should have fallen 23 per cent over the past two years including accommodation, travel, cafes, clothes, accommodation...and shares... Read more

Australian Headlines

Australian Market Report: The Australian market looks set to open flat after a fluctuating night on Wall Street where a rebound in tech stocks offset a transport industry, including airlines, slump. At 0645 AEDT on Friday, the June share price index futures contract was down two points at 5,883... Read more

The Australian dollar slipped as uncertainty over the timing of US central bank interest rate hikes drove “puzzling” market moves. At 4pm (AEDT), the local currency was trading at US78.05, down from US78.18 cents yesterday. At noon today, the dollar had reached as high as US78.29 cents.... Read more

The Australian bond market is weaker, as demand for the safe haven assets disappears following a flat performance in recent days... Read more

Budget 2015: Treasurer Joe Hockey hints the Government will be introducing a bank deposits tax... Read more

Prime Minister Tony Abbott says the upcoming budget will contain some tough measures with one tipped to be a tax on bank deposits which will raise about $500 million a year... Read more

Hockey warns on ‘unsustainable’ tax system... Read more

Australia will join the club of more than 30 countries negotiating the set-up of a $100 billion China-led development bank. After holding out for months, Prime Minister Tony Abbott announced on Sunday that Australia intends to sign up to the Asian Infrastructure Investment Bank... Read more

The Federal Government has moved to stop a politically dangerous debate on increasing the GST ahead of the next election, using its tax White Paper to effectively kill the idea... Read more

Mining billionaire Gina Rinehart has stepped up her criticism of governments for imposing too many costs on the mining sector amid a commodity price downturn.... Read more

Forte Energy to acquire project near Olympic Dam... Read more

US oil and gas giant Chevron has ended months of speculation by confirming today that it intends to sell its $5 billion half-share of Caltex Australia. It will end Chevron's long-standing investment in downstreat oil and gas in Australia though the company was quick to add it would have no impact on its focus on the Gorgon and Wheatstone LNG developments... Read more

Caltex Australia says it will be "business as usual" after US energy giant Chevron sold its 50 per cent shareholding in the local fuel refiner and distributor... Read more

Mount Todd gold mine reopening proposal from Vista Gold faces environmental liability concerns... Read more

Triton Minerals managing director Brad Boyle has increased his interest in the company by 100,000 shares through the exercise of 100,000 unlisted options at $0.10 each. Shares in TON are currently trading at $0.36... Read more

Rewardle Holdings has raised $5 million through a share placement priced at $0.33 each to accelerate growth of its Merchant and Member Network... Read more

Tasmanian Government optimistic about direct air link to China after trade mission meeting... Read more

Tasmania's East Coast community of Triabunna is hopeful a marina expansion and new boat ramp will help revitalise the economy. The town was hit hard by the downturn in the forestry industry... Read more

Coca-Cola Amatil has made a big push to rebuild its presence in the domestic beer market, after its half-owned Australian Beer Company on Friday launched its Yenda range of beers in packaged form. The drinks giant hopes Yenda will capture a sizeable chunk of the small but fast-growing craft-beer segment... Read more

Former Network Ten boss Nick Falloon is making a media comeback as chairman of Fairfax. The industry veteran was appointed non-executive director of Fairfax on Thursday and will replace outgoing chair Roger Corbett in August. Fairfax shares closed three cents lower at 94 cents.... Read more

Women will make up at least half of all future appointments to paid Victorian government board and court positions. Female representation on government boards in Victoria has dropped from 40 per cent to 35.6 per cent in the past four years... Read more

ABC Learning accountant James Black faces tiny $20,000 fine despite hefty wage. When former ABC Learning Centres chief financial officer James Black faces sentencing in court on Tuesday, the maximum fine he could be hit with is a only a sliver of his earnings at the childcare giant... Read more

Australia's 140 top polluters will set their own limits for future pollution virtually penalty free, according to the Government's latest Direct Action policy paper. The Federal Government is building towards the launch of its flagship climate change initiative, the Emission Reduction Fund (ERF), in mid-April... Read more

One of Australia’s largest home builders, Metricon, could face hundreds of claims from its clients after the Supreme Court of Victoria found it had to pay damages to customer Graeme Hooper after a faulty slab rendered the house uninhabitable. Metricon appealed to the Supreme Court after losing at the Victorian Civil and Administrative Tribunal... Read more

Opinion - Malcolm Maiden: Share register something new for Myer to consider. The Myer department store group got something else to think about on Friday when investment bank Deutsche filed a 5.2 per cent substantial shareholding notice... Read more

International Headlines

U.S. Market Report: Wall Street investors may find little reason to make big moves next week as they await monthly U.S. jobs data and any news that could change expectations for the first interest rate hike in almost a decade. The Labor Department report is due on Friday, when the stock market will be closed for Good Friday, leaving investors unable to trade on the data until the following week... Read more

North/South Americas Market Report: North and South American markets finished mixed as of the most recent closing prices. The S&P 500 gained 0.24% and the IPC rose 0.02%. The Bovespa lost 3.49%... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The CAC 40 gained 0.55% and the DAX rose 0.21%. The FTSE 100 lost 0.58%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 0.24%, while the Nikkei 225 led the Hang Seng lower. They fell 0.95% and 0.04% respectively... Read more

Oil prices have sunk, giving back some gains from a two-day surge, as traders kept an eye on the Saudi-led air assault against Shi'ite rebels in Yemen. US benchmark West Texas Intermediate (WTI) for May delivery snapped a six-day winning streak, plunging $US2.43 to $US48.87 a barrel on the New York Mercantile Exchange on Friday. The global benchmark, Brent North Sea crude for delivery in May, shed $US2.78 to settle at $US56.41 a barrel on the Intercontinental Exchange in London... Read more

The state of the U.S. labor market in March will consume economists and investors in the week leading up to Easter, adding to the seesaw debate over when the Federal Reserve will spring its first interest rate hike... Read more

The US economy grew at an annual rate of 2.2 per cent in the fourth quarter, slowing sharply from the prior quarter, the Commerce Department says... Read more

Profit warnings are piling up. Of S&P 500 companies providing first-quarter outlooks, 84% have been negative. The strong dollar appears to be wreaking more havoc on companies’ outlooks than the bad weather did last year... Read more

Intel Corp is in talks to buy fellow chipmaker Altera Corp in a deal likely to top $10 billion, according to a source familiar with the matter, making it Intel's biggest purchase ever and the latest merger in the quickly consolidating semiconductor sector... Read more

Blackstone CEO Sees ‘Remarkable’ Opportunities in Slumping Oil... Read more

A California jury has found that a venture capital firm did not discriminate against a female partner in a closely watched case in Silicon Valley. Ellen Pao claimed she missed out on promotions at Kleiner Perkins Caufield and Byers because of her gender... Read more

Best Buy Co Inc plans to close some stores and consolidate its operations in Canada, the U.S. electronics retailer's second-largest market, in a move that will hurt earnings this year, the company said on Saturday. The retailer said it will close 66 of its Future Shop brand stores in Canada and convert 65 of them to Best Buy brand stores. The move to a single brand will cut 500 full-time and 1,000 part-time jobs, and cost the company about US$200 million to US$280 million in restructuring charges, Best Buy said... Read more

'Ask SeaWorld' marketing campaign backfires. SeaWorld, it appears, has more outspoken enemies than friends on Twitter. So when it solicited questions about its animal care online as part of a new marketing campaign this week, it seemed to fuel critics rather than dissuade them. The negative image hasn't helped the company's stock. It's down nearly 40% in the past year and is about 50% below its all-time high.... Read more

Investment banks eye potential trading boost from ECB stimulus... Read more

Ratings firm Fitch has cut Greece's credit rating amid worries that the eurozone country is running perilously close to defaulting on its sovereign debt... Read more

Denmark has applied to join the Beijing-led Asian Infrastructure Bank, China's Ministry of Finance said on Sunday, becoming the latest European power to join the institution despite misgivings of the United States... Read more

ABN Amro managers will give up pay rises after a dispute over executive salaries delayed the privatization of the bank, the bank said on Sunday. In a statement, the managers said they were "putting the interests of the bank and the public first"... Read more

Royal Bank of Scotland (RBS) has sold Coutts International, the overseas arm of the private bank, to Switzerland's Union Bancaire Privee (UBP). A spokesperson for Coutts International said both parties had agreed not to disclose the price of the deal. The bank has been owned by RBS since 2000, managing assets of more than $30bn (£20.2bn)... Read more

British Airways says some frequent flyer accounts hacked... Read more

Brazil's economy grew just 0.1 per cent last year, barely keeping the country out of a recession, the government's statistics bureau says. IT was the worst result since 2009 and bad news for President Dilma Rousseff, whose popularity has plummeted along with Brazil's economic performance. To blame for last year's poor performance was a drop in investments, which fell 4.4 per cent from 2013... Read more

How China plans to shape new Asian order... Read more

China central bank governor calls for vigilance on deflation... Read more

The chairman of China National Chemical Corp said on Sunday he hopes to re-list Italy's Pirelli on the Italian stock exchange after his firm agreed earlier this month to acquire the world's fifth-largest tire maker... Read more

Hong Kong Tycoon Li Ka-shing Ventures Deeper Into Tech. Venture-capital fund led by partner Solina Chau is pursuing deals from Israel to Silicon Valley... Read more

Opinion/Analysis - Joseph Adinolfi : Why Brazil’s currency is having a real tough time... Read more

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