ASB Securities Morning Brief for Wednesday, 14 October 2015
Wednesday, 14 October 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose, led by Trade Me Group and Fisher & Paykel Healthcare, as the local market's consistency attracts investors after a volatile September quarter. Insurer CBL Corp debuted at a premium to its sale price. The S&P/NZX 50 Index advanced 12.98 points, or 0.2 percent, to 5702.81. Within the index, 15 stocks rose, 26 fell and nine were unchanged. Turnover was $151.3 million... Read more

The New Zealand dollar fell after Chinese figures showed a bigger-than-expected drop in imports last month, which weighed on the currencies of countries that ship commodities to the world's second-largest economy. The kiwi fell to 66.74 US cents as at 5pm in Wellington from 66.97 cents yesterday. The trade-weighted index fell to 71.45 from 71.57 yesterday... Read more

New Zealand food prices edged up in September, as more expensive meat, poultry and groceries offset a decline in fruit and vegetables. The food price index rose a seasonally adjusted 0.1 percent in September from August, Statistics New Zealand said. Meat, poultry and fish prices increased 1.8 percent in September, reflecting more expensive beef and processed meat... Read more

The Trans-Pacific Partnership (TPP) trade agreement will deliver a positive credit benefit to its 12 member nations. Ratings agency Moody's Investors Service says the deal is credit positive for all participating sovereigns but especially for those in Asia... Read more

Labour set to breach TPP: Little. Leader Andrew Little says the Labour Party will breach the Trans-Pacific Partnership if in government because it is the only way it can fight the deal. Labour had its first briefing from Trade Minister Tim Groser on the 12-nation trade deal on Monday night.... Read more

Authorities campaign to prevent the surge in Auckland's housing construction sparking another leaky home type crisis. Auckland Council is upping the ante, cracking down on shoddy builders inundated with work, as housing construction in Auckland continues to boom. It has released videos showing recent examples of poor building practises it claims are rife in Auckland.... Read more

Videos of building horror stories no surprise, council inspectors say... Read more

More than half of Auckland residential properties at three big auctions failed to sell on the day and a director of the city's biggest agency has advised sellers to be "realistic" on pricing.... Read more

Auckland company manager charged over 1080 threat. A 60-year old Auckland businessman has been remanded in custody for two weeks after appearing in the Counties Manukau District Court on blackmail charges in connection with a threat to poison infant formula with 1080. The company manager was charged this morning. Judge David McNaughton granted the man name suppression until April 16, 2016, along with suppression of the names of the companies he's associated with.... Read more

Financial gain, rather than environmentalism, appears to have been the motivation behind an alleged attempt to blackmail the Government into abandoning the use of 1080. A 60-year-old businessman appeared in front of Judge David McNaughton at the Manukau District Court on Tuesday afternoon and was granted name suppression... Read more

Fonterra Responds to Arrest Made in Criminal Blackmail Investigation... Read more

Candidates for the Fonterra Directors’ Election were announced by the Returning Officer today, following the completion of the Candidate Assessment Panel (CAP) process... Read more

Fonterra's Colin Armer, Greg Gent push for smaller board... Read more

A new direct container shipping service between Wellington and the Americas and Europe will be welcomed by exporters and importers in central New Zealand, says the Wellington Chamber of Commerce. Chief Executive John Milford says today’s announcement by CentrePort will help make exporters and importers in the Wellington region and beyond more competitive... Read more

Augusta Capital, the listed property and funds manager, has bought a 15 level building in central Auckland for $16.5 million from Cook Property Group. Augusta shares last traded at 97 cents, valuing the company at $84.8 million, and have climbed 97 percent in the past five years... Read more

Successful listing for CBL. Shares in Auckland-based international credit surety and financial risk insurer CBL Corporation are now being traded on the New Zealand and Australian stock exchanges following an IPO which raised $NZ125 million, money which will largely be used to fund the company’s ongoing global growth... Read more

CBL shares climb 12% on NZX debut... Read more

Heartland New Zealand, the listed bank, says it may offer to pay 30 percent more than financial services firm Turners to buy a cornerstone stake in auto-financier Motor Trade Finances. The Auckland-based lender says it may pay $1.50 a share for between 10 percent and 20 percent of Dunedin-based MTF, and reaffirmed its interest in a full takeover provided it can reach agreement with the finance company’s board, it said in a statement after the close of trading... Read more

The Port Nicholson Block Settlement Trust has formally started negotiations to buy Crown-owned Wellington railway station - but at the right price. On Tuesday, Whanui Ltd, the trust's commercial arm, triggered the process to commence official negotiations to purchase the station from KiwiRail... Read more

Wellington Airport avoids board of inquiry for runway extension resource consent... Read more

Advisers question value of multiple memberships. Advisers say closer collaboration between professional associations may be reducing the incentive to be a member of more than one.... Read more

The amalgamation between Hospitality New Zealand and the Motel Association of New Zealand has now been formalised with the signing of the contract, late last week in Nelson, at Hospitality New Zealand’s annual conference... Read more

Insurance sector supports insurance brokers & advisers being paid commissions, yet says the Government should force them to be more transparent... Read more

MJW suggests end to overrides. Questions are being asked about whether insurance broker dealer groups will survive if recommendations suggested by a report into the insurance industry are adopted.... Read more

Kiwis sold 'worthless' insurance in Australia. Kiwis living in Australia could be covered by worthless insurance, with some policies excluding New Zealanders. Judith and Charles Cairns discovered they had paid the ANZ bank $20,000 over nearly a decade for life insurance that would never pay out because of their residential status... Read more

Senior staff shake-up at Whybin\TBWA... Read more

AMP Capital has appointed Nick Cobham portfolio manager of the AMP Capital Property New Zealand portfolio.... Read more

NZ registered financial service providers used in apparent duping of European football clubs & fraud committed against Asian investors... Read more

Chief Ombudsman’s statement on High Court TPPA Decision... Read more

Groser's 'blanket approach' in turning down Kelsey's OIA requests on TPPA not lawful, court rules... Read more

Opinion - Jane Kelsey: Government spin won't stop TPP facts emerging... Read more

Opinion - Mieke Welvaert: Housing densification isn't always happening where you'd expect. Infometric's Mieke Welvaert unpicks the data and finds townhouses & apartments are building density in areas away from urban centers... Read more

Opinion - Cameron Preston: How will NZ reach surplus on Wednesday? ... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket has continued to pare back gains following last week’s rally, as resources stocks fall prey to profit taking. At the 4.15pm (AEDT) official market close, the benchmark S&P/ASX200 index was down 30 points, or 0.57 per cent, at 5202.9, while the broader All Ordinaries had retreated 32.8 points, or 0.62 per cent, to 5234.6.... Read more

The Australian dollar has levelled off after enjoying almost two weeks of consistent gains. At noon (AEDT), it was trading at US73.28 cents, down from US73.35 cents yesterday. Since the end of September the currency has risen three US cents, or four per cent... Read more

A senior Reserve Bank official has given an upbeat assessment of the Australian economy, confident that it is strong enough to resist a significant downturn. Reserve Bank of Australia deputy governor Philip Lowe said while no one can be sure about what the future holds, the economy is flexible to adapt to the changing world... Read more

The Reserve Bank's deputy boss has downplayed the risk of an Australian recession anytime soon, but wants more help to drive economic growth. RBA deputy governor Philip Lowe said after a remarkable 25 years of economic growth, there would eventually be a period of contraction, and while he refused to rule out the possibility of a downturn he said the probability in the near term is low... Read more

The head of Australia’s biggest business bank said finalising the China free trade deal “as soon as possible” would help a rebound in Aussie business confidence take hold. Group executive Angela Mentis, who runs the $2 billion-a-month lending book of National Australia Bank’s business unit, made the comments as new data yesterday showed increased business confidence in September... Read more

Confidence in Australian business has enjoyed a boost after the Federal Government's leadership change, but conditions have remained flat, according the NAB's monthly business survey. NAB chief economist Alan Oster said there had been a partial recovery in business confidence in September — which unwound the previous month's fall — but it is still well below the mid-year peak... Read more

The deputy governor of the Reserve Bank says Sydney home prices appear to be declining because of increasing supply coming onto the market. Philip Lowe told a Sydney business conference he would welcome a drop in home prices... Read more

Real estate industry insiders say property prices look set to fall... Read more

Civil engineers, web developers and IT executives are in high demand and are enjoying stronger wage rises than other workers. The Australian Institute of Management’s latest national salary survey has found wages are still growing at a historically slow annual pace, but the IT, construction and engineering industries are the bright lights... Read more

Share scheme: Customer loyalty comes at a price. Australian companies may soon be offering shares in themselves rather than coupons, tokens and frequent flyer points to strengthen their connection with customers. Several Australian companies, including Domino's Pizza Enterprises, have been looking at issuing their own shares to customers through share-buying app Loyal3 to generate stronger customer loyalty.... Read more

Why Australia’s rich list is buying prime farmland. The mining boom is over and retail is dead, but farming is the future. At least, that’s if the buying habits of Australia’s richest businessmen and women are anything to go by. Media mogul Kerry Stokes, retail kings Brett Blundy and Gerry Harvey, mining magnates Gina Rinehart and Andrew Forrest have all been quietly snapping up prime farmland, banking on a bright future for Australian exports — especially meat and dairy.... Read more

Climate change risk in business investments not always a reason to sell. Directors are being told that they face heightened risks of personal liability if they fail to manage the impacts that climate change could have on their business.... Read more

Coal mining advertisements in South Australia slammed for being ‘farcical’ and insensitive.... Read more

The Palaszczuk Government and one of Clive Palmer's key businesses, Queensland Nickel Pty Ltd, were in discussions about a potential $25 million loan to help the company, the ABC can reveal. It is understood the Queensland Cabinet debated the issue during its weekly meeting on Monday, after a series of correspondence between Treasury and Queensland Nickel Pty Ltd about a possible loan and a Government guarantee for banking facilities... Read more

BHP Billiton 'looking more closely at M&A'... Read more

Glencore's shares due positive re-rating says UBS... Read more

Rio Tinto chief executive Sam Walsh has said he isn't interested in making a bid for Glencore despite the sharp decline in the embattled Swiss miner's stock in the past few months. Mr Walsh said in an interview Tuesday that he doesn't think Rio's and Glencore's businesses are well aligned and that Glencore operates in different geographic areas than Rio... Read more

Stonehenge Metals granted ASX trading halt... Read more

Just a year out from market expectations of first gas, Royal Dutch Shell is giving nothing away about the pace of progress at its revolutionary Prelude floating LNG operation.... Read more

Shares in Panoramic Resources have mounted a rebound this month since improving its global base metal inventory, including a major resource upgrade of the Savannah nickel mine in Western Australia. Panoramic shares bounced off a trading range in September near their year-to-date low of A$0.28 with the resource updates helping the company chart about a 28% gain since the start of October. Panoramic last closed at $0.365. ... Read more

Argent Minerals is looking to add $269,000 to its cash at bank through a tax incentive refundable offset from FY15, with an outcome and processing expected in 4-6 weeks. The claim relates to technical development activities at its wholly-owned Kempfield Polymetallic Project, where a preparations for a new seven hole, 3200 metre deep diamond drilling program are underway... Read more

Alcoa could begin shipping bauxite to potential customers in Asia early next year after the State Government approved the trial export of up to 500,000 tonnes of raw ore... Read more

Shares in iSelect have shot up as the insurance comparison business announces a new boss and ponders a takeover proposal. On Tuesday, iSelect announced it had received a non-binding, conditional takeover proposal from an international private equity firm... Read more

Indonesian-focussed Story-i Limited is preparing to reveal capital raising details, with the ASX granting the company a trading halt to organise.... Read more

Electricity advisers get $6m. Western Power paid US consulting firm McKinsey & Company $6.1 million for a “top to bottom” business improvement program.... Read more

The competition watchdog's push to make Telstra cut prices for other telcos accessing its copper wire network could affect future investment decisions and eat into profits. Telstra estimates that the ruling by the Australian Competition and Consumer Commission last Friday will cut $80 million from the telco's revenue and earnings... Read more

Telstra reveals data retention extension. Australia's biggest telco given another 18 months to comply. Telstra has revealed the Attorney-General's Department approved the telco's request for an extension to the compliance deadline for its data retention obligations... Read more

The media watchdog is likely to clear Foxtel's acquisition of a 14.9 per cent stake in Ten Network Holdings by finding that Lachlan Murdoch will not control the free-to-air network as a result of the deal, according to a former senior manager at the regulator... Read more

Coles workers should not be able to appeal against union deal, lawyers argue, amid claims deal could leave thousands worse off. Coles should not give a worker the right to appeal against the deal that potentially leaves tens of thousands of employees financially worse off, lawyers for the supermarket giant have argued... Read more

Retail union slams State Government over trading hours plan... Read more

Australia Post seeks more female leaders to deliver service to core users... Read more

Labor leader Bill Shorten has been connected to the paying of false invoices to funnel $100,000 a year in payments to the Australian Workers’ Union, a royal commission has heard. A fake bill for $30,000 worth of advertising is said to be among the bogus invoices paid out by a construction firm... Read more

Opinion - Malcolm Maiden: Australia: the not-so little economy that can. Reserve Bank guru Philip Lowe is right – the Australian economy will get its mojo back... Read more

Opinion - Goran Roos: Economic complexity is the answer to Pyne's innovation problem. Australian Prime Minister Malcolm Turnbull has tasked new Innovation, Industry and Science Minister Christopher Pyne with making Australia’s economy more innovative. The purpose of industry policy is to ensure Australia is prosperous, both now and in the future. But a nation’s potential to create prosperity is a direct function of its economic complexity... Read more

Opinion - James Laurenceson: Australia needs a solid economic stance on China... Read more

International Headlines

U.S. Market Report: Wall Street was lower in muted trading on Tuesday on renewed fears of slowing growth in China and a drop in financial stocks ahead of the start of bank earnings. U.S. stocks have rallied since a steep selloff in late-August, triggered by the devaluation of the yuan. The Dow is on track to post its eighth straight day of gains. Both the Dow and the S&P 500 have gained in nine of the last 10 sessions as investors bet on the Federal Reserve keeping rates at near-zero levels until next year.... Read more

North/South Americas Market Report: North and South American markets are mixed. The IPC is higher by 0.10%, while the Bovespa is leading the S&P 500 lower. They are down 3.22% and 0.40% respectively... Read more

European Market Report: European markets finished lower today with shares in France leading the region. The CAC 40 is down 0.97% while Germany's DAX is off 0.86% and London's FTSE 100 is lower by 0.45%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 0.17%, while the Nikkei 225 led the Hang Seng lower. They fell 1.11% and 0.57% respectively... Read more

Oil rebounded in Asia Tuesday on bargain hunting following a sharp fall the day before as lingering concerns about the global crude supply glut continued to keep a lid on gains. US benchmark West Texas Intermediate (WTI) for November delivery rose 0.70 percent to $47.43 and Brent crude for November gained 0.88 percent to $50.30 in late-morning trade. Both contracts fell sharply on Monday after rising nine percent last week, with WTI tumbling around five percent... Read more

IEA flags oil market oversupply through 2016... Read more

Oil's wild ride isn't over yet. If you're waiting for calm in the oil market, don't hold your breath. More volatility lies ahead and a supply glut will persist next year, despite signs of falling U.S. production, the International Energy Agency said Tuesday.... Read more

Deutsche Bank Economist: The Fed Is in Danger of Making a Mistake of Historical Proportions... Read more

Janet Yellen's report card: Investors give Fed a 'C'... Read more

Buffett Says U.S. Housing Picking Up, Citing Furniture Gains... Read more

Warren Buffett, the billionaire chief executive officer of Berkshire Hathaway Inc., said corporate executives who are seeking to fend off activist investors should return to the basics and consider skipping strategies pitched by Wall Street... Read more

Investment firm Fortress to shutter its macro hedge fund. Fortress Investment Group is planning to close its global macro hedge fund after suffering heavy losses and Michael Novogratz, the fund's portfolio manager, is expected to leave the hedge fund and private equity company, two people familiar with the matter said on Monday... Read more

Former Anglo Irish Bank CEO to face extradition hearing in Boston... Read more

Jury selection got under way on Tuesday in the trial of two former Rabobank traders from Britain facing U.S. charges that they engaged in a scheme to manipulate Libor interest rates... Read more

Health-care giant Johnson & Johnson said profit dropped in its latest quarter as adverse exchange rates hit revenue. Separately Tuesday, J&J said it plans to buy back up to $US10 billion in stock, or about 3.7 per cent of shares outstanding, in a move to tweak its capital structure. The company said it would issue debt to fund the program. Despite the disappointing revenue figures, J&J lifted its full-year earnings outlook to $US6.15 to $US6.20 a share, excluding certain items, up from an earlier range of $US6.04 to $US6.19. ... Read more

Anheuser-Busch InBev has agreed to buy its main rival SABMiller for £68 billion ($104 billion), creating a super brewery with sales of $55 billion. The combined firm will be the world's largest beermaker by far, with nine of the world's top 20 beers by volume. AB InBev (BUD) will offer most SABMiller (SBMRY) shareholders £44 ($67.59) per share for the maker of Miller Lite, Pilsner Urquell and Peroni, a premium of roughly 50% over the share price before acquisition rumors started flying.... Read more

Wells Fargo & Co. agreed to buy $32 billion in assets from General Electric Co. and take on about 3,000 employees as the industrial giant retreats from financial services... Read more

Citi dials down risky block trading amid market turmoil... Read more

Twitter Inc will lay off up to 336 employees, or about 8 percent of its workforce, as co-founder Jack Dorsey readies to revive growth in the microblogging service provider's user base in his second stint as chief executive. The layoffs, primarily in the company's engineering and product functions, come a week after Dorsey took over as permanent CEO. ( Shares of Twitter, which had about 4,100 employees globally as of June 30, rose as much as 6.7 percent to $30.68 on Tuesday.... Read more

The U.S. Justice Department has determined that Apple Inc has implemented significant improvements to its antitrust compliance program and that a court-appointed monitor's term does not need extended, according to a court filing. The Justice Department in a letter filed late Monday in Manhattan federal court said its recommendation was despite Apple's "challenging relationship" with Michael Bromwich, who was named monitor after the iPad maker was found liable for conspiring to raise e-book prices... Read more

EMC Corp said it would pay Dell Inc up to $2.5 billion in termination fees if the data-storage company accepts a "superior proposal". The company will have to pay about $2 billion before the expiry of the 60-day 'go-shop' period, during which EMC can solicit other bids, and $2.5 billion after the expiry on Dec. 12. EMC said Dell had secured financing of up to $49.5 billion from banks to fund the roughly $67 billion deal announced on Monday... Read more

Argentina's mine industry doubles down on lithium. We need it for cell phones, electric cars and just about every long-life battery gadget we use: Lithium is a key ingredient of the modern economy, but new mining concessions can be hard to find. Except, that is, in Argentina, where a lithium rush is in full swing. Argentina, Chile and Bolivia hold 70 percent of the world's reserves of the soft, silvery metal.... Read more

New Barclays CEO faces early challenge to fix wealth arm. The new chief executive of British bank Barclays, expected to be former JPMorgan banker Jes Staley, faces an early challenge in deciding what to do in wealth management after a decade of disappointment... Read more

5 reasons why Europeans hate Obama's free trade plan. A planned free trade area spanning Europe and the U.S. is supposed to make everyone richer and create lots of jobs. So why is it proving so unpopular? The Trans-Atlantic Trade and Investment Partnership, or TTIP, would cover more than half of the world's economic output and 800 million people.... Read more

Citi: The Most Important People in Finance Are Concerned About These Four Things This is what policymakers and investors talked about in Lima.... Read more

EU sees 710,000 migrants this year... Read more

Irish budget: Michael Noonan says Ireland is on new path... Read more

UK annual inflation turned negative in September and marked the second time this year prices have fallen, reinforcing views that interest rates will remain pegged at record-lows in the near future... Read more

Luxury goods giant LVMH Moët Hennessy Louis Vuitton saw an 18% rise in revenue in the nine months to September - to €25.3bn ($28.7bn; £18.74bn) - compared with the nine months prior. It posted organic revenue growth of 7% for the three months to September, against forecasts of about 5.5%... Read more

VW looks to cutbacks and electric cars to overcome scandal. Volkswagen will cut investment plans at its biggest division by 1 billion euros ($1.1 billion) a year and step up development of electric vehicles, it said on Tuesday, as it battles to cope with the fallout from its cheating of diesel emissions tests... Read more

Bank of Russia Head Sees Rate Drop to Near Inflation in 2017. Russia’s central bank will probably reduce its key interest rate to near the level of inflation in two years if price growth eases to policy makers’ 4 percent target in 2017, Governor Elvira Nabiullina said... Read more

China's trade performance has weakened again, with both import and exports falling last month. While the 1.1 per cent fall in exports was not as bad as the market had feared, imports declined by a worse-than-expected 17.7 per cent, indicating that domestic demand in the economy remained fragile. Overall in US dollar terms, China's trade surplus of $US60.3 billion marginally widened from the $US60.2 billion in August.... Read more

China to put growth before reform ambitions amid slowdown fear. Chinese leaders will signal that growth is their priority over reform for the world's second-biggest economy by setting a growth target of around 7 percent in their next long-term plan even as the economy loses momentum, policy insiders say... Read more

Chinese investors put $400 million into U.S. startups.... Read more

Opinion - Angus Nicholson: Mixed Chinese data is bad Chinese data... Read more

Latest reports

Latest reports