ASB Securities Morning Brief for Tuesday, 31 March 2015
Tuesday, 31 March 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares fell paced by Xero, Spark New Zealand and other dual listed stocks as investors across the Tasman sold off stocks after a major capital raising. Meridian Energy fell ahead of its instalment receipt coming due. The NZX 50 Index fell 32.959 points, or 0.6 percent, to 5821.289. Within in the index, 31 stocks fell, 11 rose and eight were unchanged. Turnover was $103 million... Read more

The New Zealand dollar fell ahead of key US manufacturing and employment reports, and before a dairy auction where buyers will have to absorb increased volumes of milk powder on offer. The kiwi fell to 75.39 US cents as at 5pm in Wellington, from 75.58 cents at the New York close on Friday. The trade-weighted index fell to 78.95 from 79.16.... Read more

The New Zealand dollar may extend its decline against the greenback this year, on increased signs the Federal Reserve will lift interest rates from a record low, benefitting companies such as Fisher & Paykel Healthcare that get much of their sales in US dollars... Read more

NZ employment confidence rises with optimism about earnings growth... Read more

PM says Government will have to "rip up" RMA reforms and go back to drawing board; says will have to abandon rewrite of sections 6 and 7... Read more

RMA reform still likely to succeed, says expert. Winston Peters' Northland byelection win has raised fears about disruption to the Government's plans for RMA law reform, although one business leader sees scope for a more targeted and workable approach to change... Read more

This year’s Financial Advisers Act review should consider how advice could be made commercially viable without the need for high upfront commissions, the Financial Services Council says.... Read more

ETFs tipped to help asset allocation. Smartshares’ three new exchange-traded funds are being described as a handy tool for advisers tackling asset allocation questions.... Read more

Wealthy Auckland downtown waterfront landowner Ngati Whatua has already begun the 2018 rent review negotiations with tenants on 20ha of leasehold land. A bruising first round of rent reviews concluded only recently and went to arbitration before retired High Court judge Robert Fisher QC, as apartment owners fought to keep the leasehold fees down... Read more

Commercial property investors remain optimistic about the market in most parts of the country except Palmerston North and Northland - Colliers survey... Read more

Synlait Milk's share price has tumbled after the Canterbury-based specialised milk powder manufacturer reported a $6.4 million net loss for the six months to January and revised down its full-year earnings forecast. The company, which is 39 per cent owned by Shanghai's Bright Dairy - through Shanghai Bright Dairy and Food - said the loss arose from unrealised foreign exchange losses of $6.8 million. Synlait shares, with an issue price of $2.20 a share, listed on the NZX in July 2013.... Read more

Competition for Fonterra as EU scrubs quotas. European farmers free to produce as much dairy as they want for first time since 1984... Read more

New Zealand supermarkets are remaining vigilant against product tampering ahead of the deadline imposed by a blackmailer who threatened to lace baby food with 1080. The unknown blackmailer sent threatening letters to Fonterra and Federated Farmers in November, claiming they would contaminate retail supplies of infant formula with the 1080 pesticide by the end of March unless the Government stopped using the poison in forest pest control... Read more

Zespri says kiwifruit volumes back to pre Psa volumes as new season kicks off... Read more

Silver Fern boss urges meat companies to pull together. Rationalisation of the New Zealand meat industry could take place through collaboration in processing and freight, rather than through mergers and acquisitions, says Silver Fern Farms chairman Rob Hewett... Read more

The Warehouse Group boss Mark Powell is to leave after a four-year stint in which he oversaw a major strategic shift, including numerous acquisitions and a nationwide revamp of the retailer's Red Sheds stores. The Auckland-based company said last night a formal process had begun to recruit a new group chief executive.... Read more

'Ifs' and 'buts' around the oil and gas industry's ability to bring mega bucks to NZ. New Zealand can’t put all its eggs in the oil and gas basket. This seems to be an underlying message resonating through this year’s Advantage New Zealand Petroleum Summit... Read more

NZ puts seven new oil and gas areas up for tender... Read more

Energy Minister Simon Bridges agrees with some of the messages of protestors outside a petroleum summit being held in Auckland today... Read more

Invivo Wines has become the first company in New Zealand to raise the maximum amount allowed through an equity crowdfunding campaign. The Auckland-based wine company hit the $2 million limit yesterday morning, with two weeks of the offer left to run.... Read more

Port Taranaki's half-year report has been announced and profit is up more than 50 per cent.... Read more

Rezone plan for Viaduct defended. Rezoning Auckland's Viaduct apartment land as commercial would make the area more like other parts of the city and result in a more vibrant mix of activities, says Auckland Council. Owners of four blocks The Park, The Point, Latitude 37 and Viaduct Point have banded together and hired lawyer Bianca Tree to fight the changes, fearing commercial uses in their buildings and higher leasehold land fees... Read more

Ten new air service deals to strengthen NZ's global links... Read more

BNZ's GlobalPlus home loan product, which earned Air New Zealand Airpoints dollars has gone, but Westpac is about to roll out a similar product.... Read more

A significant number of Canterbury businesses are now taking a strategic view on how best to grow, according to an employer survey. The latest Canterbury Employers' Chamber of Commerce (CECC) member survey shows that firms realise they need to be more strategic, to manage their growth and give thought to how to access working capital... Read more

Opinion - Roger J Kerr: Market forces on the NZ dollar evenly balanced... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket has been hit by slumping commodity prices, with falls in large resources stocks dragging the index 1.3 per cent lower. At the 4.15pm (AEDT) official market close, the benchmark S&P/ASX200 index had declined 73.8 points, or 1.25 per cent, to 5,846.1, while the broader All Ordinaries index dropped 72.6 points, or 1.23 per cent, to 5,816.3.... Read more

Another slide in iron ore prices has pushed the Australian dollar back below US78 cents. At 4pm (AEDT), the local currency was trading at US77.16 cents, down from US78.01 cents on Friday... Read more

Banks and building societies have condemned a bank deposits tax plan as a burden on ordinary Australians and retirees. Treasurer Joe Hockey is pressing ahead with a proposal for a 0.05 per cent levy on deposits of up to $250,000, even though he criticised the former Labor government when it floated the idea ahead of the last election... Read more

Treasurer Joe Hockey says every aspect of the tax system is up for review in the wake of a Federal Government discussion paper which suggests Australia relies too heavily on corporate and income taxes and not enough on consumption taxes like the GST. In highlighting the complexity of the current GST system, the 200-page paper used an example of how pizzas, pizza subs, pizza pockets and bakery-style pizza rolls were defined by law and taxed differently... Read more

Australia's tax system under pressure from GST-free online goods... Read more

Shareholders have warned against tampering with rules that provide tax benefits on dividends. The federal government's tax discussion paper asks if the dividend imputation system - which prevents companies and shareholders both paying tax on profits - is serving Australia well as the economy opens up to overseas investors... Read more

Peak bodies representing clean energy companies and electricity users have written an open letter to Australia's politicians urging them to resolve the renewable energy target (RET) impasse. Last week the Government emphatically rejected a proposal from the Clean Energy Council for a compromise on the RET... Read more

Chevron's exit from two major Australian investments has raised concerns about the nation's reliance on oil and gas earnings as shares in the sector dive. Late on Friday, the global oil and gas giant made a $4.6 billion exit from its 50 per cent stake in fuel distributor Caltex and walked away from the country's biggest unconventional oil and gas exploration venture... Read more

Shares in gold and copper miner PanAust have rocketed after a heavily reduced takeover bid by Chinese company Guangdong Rising Assets Management. Shares in the Australian-listed Laos-focused takeover target closed 49 cents, or 40 per cent higher at $1.715.... Read more

Mining giant BHP Billiton wants a review of workplace relations to highlight the need to ensure Australian laws are flexible enough to keep pace with other countries. BHP directly employs 23,000 people plus up to 34,000 contractors across its 35 Australian operations, and has released its submission to the Productivity Commission's review of the workplace relations system... Read more

Origin Energy hit with $2 million fine for illegal door-to-door sales tactics... Read more

LNG Ltd hasn’t given up hope of building its $1 billion project at Gladstone. The company yesterday said it had renewed its lease on the Fisherman’s Landing site at a cost of $1 million and had received an extension to December 31, 2017, for completion of construction of the FLLNG project from the Queensland Government... Read more

Former MACA managing director Doug Grewar has been appointed the new managing director and chief executive of Viento. Viento chairman Ray Munro said the appointment was part of a planned business and management restructure of the company, which has been struggling to keep its head above water in recent times. Viento shares were off 0.4 cent, or 7.41 per cent, to five cents at the close.... Read more

Former PanAust bosses slam current leadership amid fresh takeover bid. Two of the most important leaders in the history of takeover target PanAust have slammed the board and management of the copper miner, and expressed disappointment at the depressed share price that prompted this week's revived $1.1 billion takeover offer.... Read more

Shares in drug discoverer Novogen have surged after the company said its experimental anti-cancer drug Cantrixil killed human ovarian stem cells. Shares in Novogen were three cents, or 15.79 per cent, higher at 22 cents.... Read more

Slater and Gordon has struck a $1.2 billion deal to make it the UK's top personal injury lawyer. The company's origins stretch back to the UK more than 85 years ago, but it has been known as Slater and Gordon since its began operating in Melbourne in 1935... Read more

Vitamins and nutritional supplements maker Blackmores expects profit growth of 20 per cent in the three months to March as sales continue to rise... Read more

Qantas continues to increase the amount of revenue generated per customer thanks to a truce in its battle with Virgin Australia for domestic market share... Read more

New South Wales Premier Mike Baird says his government is considering a public float for the sale of 50 per cent of the electricity distributors Ausgrid and Endeavour Energy. A spokesman for Mr Baird confirmed it was one of the options being considered to give small investors a chance to participate... Read more

Vodafone Australia vows to reverse 'Vodafail' by the end of 2015... Read more

Banana plants culled to curb Panama disease. The destruction of 16,000 banana plants has begun on a Tully Valley farm in north Queensland where Panama disease has broken out.... Read more

Corporate watchdog ASIC is investigating a payday lender accused of lending to drug addicts, gamblers and people who are illiterate as well as changing the terms of loan contracts after they have been signed. The ABC's Four Corners uncovered disturbing conduct by online lender Good2Go Loans, triggering an investigation by the Australian Securities and Investments Commission.... Read more

A liquor wholesaler has been fined $10,200 for trying to pass off a beer brewed in China as Australian. Aussie Beer had green and gold labelling featuring the slogan `Australia's finest malt', plus the words `100% owned' within a map of Australia... Read more

Opinion - Elizabeth Knight: Fortescue chairman Andrew Forrest's call for iron ore production cap may have backfired. Whether or not you agree with Fortescue chairman Andrew Forrest's call-out to the big iron ore producers to cap production, it looks to have backfired, with the commodity's price falling to its lowest level since a daily tradeable market was established in 2009, thanks to confirmation none of the big producers are doing anything to dam up the flood of iron ore... Read more

International Headlines

U.S. Market Report: U.S. stocks rallied more than 1 percent on Monday, with biotech stocks among the most active names amid a number of major deals in the space. The day's gains were broad as major indexes rebounded off a sharp decline last week, a period over which major indexes lost more than 2 percent. All ten primary S&P 500 sectors rose on the day... Read more

North/South Americas Market Report: North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 2.21% while U.S.'s S&P 500 is up 1.19% and Mexico's IPC is up 0.75%... Read more

European Market Report: European markets finished broadly higher today with shares in Germany leading the region. The DAX is up 1.83% while France's CAC 40 is up 0.98% and London's FTSE 100 is up 0.53%... Read more

Asian Market Report: Asian markets finished broadly higher today with shares in China leading the region. The Shanghai Composite is up 2.59% while Hong Kong's Hang Seng is up 1.56% and Japan's Nikkei 225 is up 0.65%... Read more

Oil prices fell for the second straight session on Monday as Iran and six world powers negotiated a deal for Tehran's nuclear program that could end Western sanctions, allowing the OPEC member to ship more crude into an already flooded market. Benchmark Brent oil was down $1.15, or about 1 percent, at $55.26 a barrel by 11:12 a.m. EDT (1512 GMT). U.S. crude was 93 cents, or nearly 2 percent, lower at $47.94.... Read more

Oil prices should stabilise in the second half of this year and rise in 2016 and 2017 as consumers respond to a period of much cheaper fuel, a Reuters poll of analysts showed on Monday. The survey of 34 analysts predicted North Sea Brent crude LCOc1 would average $59.20 a barrel in 2015, up from around $55 so far this year. The forecast is up just 20 cents from the projection in last month's Reuters survey. Brent is expected to rise to $72.10 in 2016 and $78.70 in 2017, the poll showed... Read more

Investors fly away from U.S. stock funds at a rate last seen in 2009... Read more

U.S. consumer spending barely rose in February as households used the windfall from lower gasoline prices to boost savings to the highest level in more than two years, the latest sign that the economy hit a soft patch in the first quarter.... Read more

Pending home sales give hopeful sign for U.S. housing market... Read more

Bernanke: I didn’t throw seniors under the bus. Former Fed Chairman Ben Bernanke unveiled a new blog on Monday and used his first post to defend his record from criticism that he kept rates artificially low and hurt savers.... Read more

Fidelity moves to end DuPont proxy battle-sources. Fidelity Investments, a major investor in DuPont, has put pressure on activist fund Trian Fund Management LP and the chemical conglomerate to reach a settlement in what it sees as a detrimental proxy fight, according to people close to the matter... Read more

Musk tweet about 'new product' boosts Tesla shares... Read more

Teva to buy U.S. drug developer Auspex Pharma for $3.5 billion... Read more

UnitedHealth to buy pharmacy benefit firm Catamaran for $12.8 billion... Read more

Morgan Stanley to sell natural gas business scrutinized by Fed... Read more

A high-profile manager of loan funds was accused of overbilling investors by nearly $200 million, the Securities and Exchange Commission announced Monday in a major case brought by the agency. The SEC alleged that the Zohar Funds, which are three loan funds managed by Lynn Tilton’s Patriarch Partners, were overvalued... Read more

Kingfisher abandons planned purchase of Mr Bricolage... Read more

The UK's biggest banks will be subjected to a severe global economic slowdown and face major difficulty trading assets under the latest Bank of England stress test. The hypothetical stress test sees the eurozone and Chinese economy contract, commodity prices fall and banks wrestling with the default of a handful of major trading partners, the Bank of England said on Monday... Read more

Barclays has hired Barry Meyers, a former executive director at JP Morgan, to head its UK equity capital markets team, a source familiar with the matter said on Monday... Read more

The U.K. general election is turning into a thriller for politicians and stock investors alike, as the lack of a clear favorite makes it trickier to take a position... Read more

Dufry AG has fleshed out plans for its takeover of Italy's World Duty Free SpA, as the Swiss company seeks to consolidate its position as the biggest player in the fast-growing airport retail sector. Dufry said on Monday it expects to raise at least 2.1 billion euros ($2.3 billion) through a rights issue of new stock and up to 1.5 billion via long-term debt instruments, adding the plan had the backing of major investors.... Read more

Italian online fashion retailer Yoox has said it is in merger talks with London-based rival Net-a-Porter. Yoox and Richemont, which owns Net-a-Porter, confirmed they were discussing a "potential business combination". A merger would create a €2.5bn ($2.7bn; £1.8bn) industry leader combining Yoox's discounted out-of-season offers with Net-a-Porter's in-season lines... Read more

Denmark applies to join China-backed AIIB investment bank... Read more

Russia aims to boost numbers of Chinese tourists to 5 million a year... Read more

Billionaire financier George Soros is ready to invest $1 billion in Ukraine, if Western countries help private investment there. He also put the odds of Greece leaving the euro at a third, in an interview with Austrian newspaper Der Standard... Read more

American ExxonMobil has filed a tax claim against Russia. The company says that for the last six years it has been paying taxes at a higher rate than necessary. The overpayment may amount to hundreds of millions of dollars. Experts believe that other international participants of the Sakhalin-1 project may now follow suit... Read more

China seeks to boost property market. China's central bank has lowered minimum down-payment levels on second homes nationwide, scrapping a key policy originally aimed at controlling housing prices as it seeks to boost the economy... Read more

A drop in Chinese tourist numbers is driving down shop rentals in Hong Kong, with vacancies increasing in the same prime areas that just three years ago pipped New York's Fifth Avenue to become the world's most expensive retail real estate... Read more

South Korea picks KAI, with Lockheed, for $7.9 billion fighter jet development... Read more

India Is One of the Least E-Commerce Friendly Markets Says U.N. Body... Read more

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