ASB Securities Morning Brief for Thursday, 02 July 2015
Thursday, 02 July 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose, as Meridian Energy's one-month extension of the Tiwai Point smelter stay-or-close decision renewed investor interest in utility companies. Kathmandu Holdings dropped as Briscoe Group detailed its takeover offer. The S&P/NZX 50 Index rose 67.4 points, or 1.2%, to 5794.36. Within the benchmark index, 31 stocks rose, 11 fell and eight were unchanged. Turnover was $122 million... Read more

The New Zealand dollar rose from a five-year low after Greece missed its debt repayment deadline, while a deteriorating local economic outlook stokes expectations for steeper interest rate cuts. The kiwi rose to 67.94 US cents at 5pm in Wellington from 67.73 cents at 8am, and little changed from 68.06 cents yesterday. The trade-weighted index fell to 71 from 71.19... Read more

A higher proportion of New Zealand workers are staying in employment longer than almost all of their counterparts in other OECD countries, according to a PwC index. New Zealand is continuing to "harness the economic power" of its older workers, according to professional services firm PwC which today released its latest version of its "Golden Age" index... Read more

Credit growth is running at its fastest pace since the Global Financial Crisis.... Read more

A total of 540 student loans worth a record $17.7m written off due to bankruptcy in one year... Read more

National average asking price up. Eight regions drove an increase in June’s national average asking price, according to’s latest data. The strength of increases in the average asking price in Central Otago, Gisborne and, inevitably, Auckland resulted in a 0.9% rise in the national average asking price to a new high of $537,682 in June... Read more

Wellington's economy and commercial property market looks to be on a sustainable recovery path after seven long years of little growth, says Mark Hourigan, capital commercial managing director for Bayleys... Read more

Surge of new CBD apartments unlikely to meet demand. Apartment development in Auckland's CBD is likely to fall just short of expected demand over the next few years, according to Colliers International.... Read more

Hundreds of Fonterra staff across the country are understood to have been called into simultaneous meetings on Wednesday announcing proposed job cuts. More than 150 staff at the dairy giant's London St office in Hamilton were called into an hour-long meeting on Wednesday... Read more

The price for New Zealand's key dairy export, whole milk powder, is set to decline further at tonight's GlobalDairyTrade auction as dairy companies head into the new season and ramp up production... Read more

Deer Industry NZ is fielding an upsurge in the number of farmers wanting to join an Advance Party (AP). These are an innovative concept, designed to get deer farmers to encourage and support each other in adopting management practices that will make their farms more profitable... Read more

A decision on the future of the Tiwai Point Aluminium Smelter at Bluff has been delayed for a month.... Read more

Nuplex keeps buyback programme suspended until August earnings announcement. The shares fell 1 percent to $4.16, and have soared 41 percent this year, making it the third best performer on the S&P/NZX All Index... Read more

Caltex buy will not inflate pump prices: Z Energy... Read more

VMob Group, the NZAX-listed mobile voucher developer, has rolled its global deal with fast-food chain McDonald's into South Korea, adding 400 stores to its targeted voucher system. VMob's shares fell 2.9 percent to 33 cents, and have declined 2.9 percent this year.... Read more

TruScreen, the NZAX-listed cervical cancer test developer, raised $1.56 million in an oversubscribed share purchase plan to help fund its push into Asia. The Auckland-based company was seeking $1 million through the share purchase plan, but accepted all subscriptions, it says. The share sale was at 25 cents apiece and accounted for 3.8 percent of shares on issue. The shares last traded at 26 cents.... Read more

Briscoe Group will ask for an exemption from the NZX's Takeovers Panel so it can legally offer to buy shares in Kathmandu from shareholders outside of New Zealand and Australia. Briscoe, which took a 19.9 per cent stake in the dual-listed outdoor clothing and equipment retailer this week, on Wednesday lodged an official takeover intention notice with the NZX... Read more

Duke to retain control as Briscoe offers 89.7 mln shares, $32.3M cash for rest of Kathmandu.... Read more

DNZ Property Fund, which is more than halfway through an asset sale programme, has sold an office block in Auckland's Albany for $15.2 million, 3.1 percent above the property's last valuation. DNZ shares increased 0.3 percent to $2.04, and have gained 6.5 percent this year... Read more

Chorus, the telecommunications network operator, has expressed interest in the government's plans to expand the state-sponsored ultrafast broadband network and rural broadband initiatives... Read more

Day of reckoning over Chorus. The price of broadband and Chorus shares could be on the move today as the Commerce Commission releases an updated draft decision on wholesale line charges for the company's copper network. But the question remains: which way?... Read more

2 Cheap Cars, which has built a nationwide chain of auto yards selling used imports since starting four years ago, said it plans to enter the market for new cars by parallel importing of Toyota, Honda and Mazda vehicles. Chief executive and 50 percent shareholder Eugene Williams, claims his company will be able to undercut the official dealerships by as much as $10,000 on the price of a new car and he is targeting 10 percent of the new car Japanese market in New Zealand within three years. It plans to open its first new car showroom in Greenlane, Auckland, in the next two months... Read more

New Zealand firm Rocket Lab plans to launch its battery powered rockets from Birdlings Flat in Canterbury. The company has lodged resource consent applications to build a launch pad - about half the size of a tennis court - and hopes to launch a test vehicle late this year... Read more

Shareholders of AWF Madison Group, the country’s largest recruiter and labour provider, are being asked to vote in favour of a $150,000 increase in directors’ fees at the annual general meeting later this month. A final dividend of 8 cents per share was paid out today, taking the total year’s dividend to 15.2 cents.... Read more

Veteran corporate raider Ron Brierley is bringing his latest investment vehicle, Mercantile Investment, to the NZX, with a listing scheduled for next week. The Sydney-based investment firm has been approved by stock market operator NZX for a compliance listing, on July 6, it said in a statement to the ASX yesterday. The move makes it easier for New Zealand investors to buy shares in the firm, which had 3570 shareholders as at Aug. 14, 2014... Read more

Dealer groups should be QFEs. Insurance dealer groups should become QFEs and take total responsibility for their members’ operations, Kepa chief executive Jeff Page says.... Read more

Federated Farmers' Dairy Industry Group has announced changes to its national executive this afternoon... Read more

Crane crash at Port Otago. Maritime Union calls for inquiry, after port worker sustained critical injuries in a crane crash at Port Otago.... Read more

Luigi Wewege kicked off Financial Services Provider register... Read more

Kiwibank has been blocked from closing E-Trans International Finance's bank accounts after the money remitter challenged the state owned lender's move in the High Court... Read more

Opinion - Vernon Small: It's time for some myth-busting about safety laws - and our place in the world. If you think NZ is a small, trade-dependent nation that "punches above our weight," you need to read this.... Read more

New Zealand Herald Editorial: Selling houses abroad okay if result is right. Finance Minister Bill English has gone offshore in his quest to sell some state houses to providers of "social housing"... Read more

Opinion - Pattrick Smellie: Companies are abusing the media embargo system too often... Read more

Opinion - Brian Rudman: Government deliberately works blind in state house plan... Read more

Opinion - Fran O'Sullivan: It's best NZ keep its nerve despite global turmoil. New Zealand businesses should keep their nerve as international markets are spooked by the Chinese sharemarket sell-off, the closure of Greek banks and even a signal by Puerto Rico that it cannot pay its debts... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket has starting the new financial year in an upbeat mood, making substantial gains as energy and financial stocks shake off a Greek loan default. At the 4.15pm (AEST) official market close, the benchmark S & P/ASX200 index was up 56.7 points, or 1.04 per cent, to 5515.7, while the broader All Ordinaries index gained 54.8 points, or 1.01 per cent, to 5506.... Read more

The Australian dollar continued to nudge higher today, having stood firm in the face of Greek debt negotiations and despite aggressive efforts to send it lower. Traders said the focus of markets now switches to the weekend referendum in Greece. Support has trickled back to the Australian dollar, preventing it from dipping below US76c this week... Read more

Manufacturing slump points to unemployment increase: Ai Group... Read more

Australia is on track to record more than a decade of budget deficits, with a new report suggesting the budget reality is more dire than current projections. The Grattan Institute working paper suggests both Labor and Coalition governments have been overly optimistic in counting on bracket creep and improved economic conditions to push the budget back into surplus... Read more

A massive pipeline of housing construction is expected to help slow soaring home prices in the coming year. A record $57.6 billion of new homes were approved in the past 12 months, which means more than 200,000 dwellings are expected to be constructed across Australia this year... Read more

Property boom accelerates in Sydney, Melbourne, slide builds in mining states. Two interest rate cuts this year have seen a reacceleration in the booming Sydney and Melbourne property markets, but have not been enough to stop falls in Perth and Darwin. The widely watched CoreLogic RP Data home value index for the nation's capitals jumped 2.1 per cent in June, leading to a 9.8 per cent rise over last financial year.... Read more

The WA Chamber of Commerce and Industry (CCIWA) has delivered a bleak outlook for the WA economy in its bi-annual analysis. The outlook report predicted a contraction in business investment and consumer spending, subdued wages growth and inflation of just 2.5 per cent in the year ahead... Read more

'Inconsistent' quality tests see China reject Australian coal... Read more

A fall in the iron ore price to below $US60 a tonne has hit the share prices of Australia's miners... Read more

St George Mining received a Price and Volume Query from the ASX this afternoon after the company's shares hit $0.105 intra-day, which is more than 16% higher than $0.088 at yesterday's close. Late in the trading day, around 4.7 million shares have changed hands... Read more

Drillsearch shares are higher after the company flagged strong margins despite a slide in production. The oil and gas explorer and producer expects to have produced 3.0 million barrels of oil equivalent for the year, a result that would be at the lower end of its previous forecast of 3.0-3.2 mmboe and lower than the 3.4 mmboe in 2013/14. Drillsearch shares closed 1.5 cents, or 1.45 per cent, higher at $1.05.... Read more

Asciano target of $9 billion pitch from Brookfield... Read more

Stratum Metals has been granted a trading halt by the ASX this afternoon pending details of a proposed acquisition... Read more

The Woodside Petroleum-led Browse joint venture has begun detailed design and engineering work to come up with a viable development proposition for the world's biggest floating LNG project. The news this morning the joint venture, which also includes Royal Dutch Shell, BP, PetroChina and Japan's MIMI consortium, comes as Woodside reiterated it wanted to make a final investment decision (FID) on a development in the second half of next year... Read more

Woodside Petroleum's plan to commission three massive floating LNG vessels is a step closer. But uncertainty remains around the timing of a final investment decision on the Browse liquefied natural gas (LNG) gas project off Western Australia. Woodside shares were 19 cents, or 0.6 per cent, higher at $34.42 at 1420 AEST.... Read more

Queensland Labor backs Adani's Carmichael coal project. Queensland's Labor government says it will continue to support Indian mining company Adani, despite revelations that the government's own Treasury officials believe the project is unbankable... Read more

Ellendale mine in administration... Read more

Anatara Lifesciences to grow cash position... Read more

Australia's largest rail and freight operator Asciano is set to fall into foreign hands after North American giant Brookfield lobbed a near $9 billion takeover offer its way. It would be the biggest takeover in Australia since SABMiller swallowed beverages giant Foster's for $12.3 billion in 2011... Read more

Brisbane-based Alchemia has secured a deal to sell its anti-cancer arm, which was once hoped to be a big money spinner for the struggling drug developer. The deal gets up to $US300,000 ($A389,000) in cash quickly to Alchemia as reimbursements for cancer project costs, according to a stockmarket filing on Wednesday... Read more

Murray Goulburn has been hit by share market volatility ahead of listing its unit trust on Friday. The $2.10 opening price is at the low end of what had been estimated, with the original suggested range at $2.10-$3.20. The co-op says the figure is partially based on the challenges facing global economies... Read more

Gold Coast no longer in Australia’s top five for domestic travel... Read more

Ramelius Resources has appointed chief executive Mark Zeptner managing director. Shares in the company were steady at 11.5 cents at the close.... Read more

Inaugural CEO to lead change agenda. The federal government has lured the director of the UK's government digital services unit to Australia to lead its newly-established $250 million digital transformation office.... Read more

Nido Petroleum has appointed Woodside’s former chief geoscientist Michael Fischer as its new managing director. Dr Fischer replaces Phil Bryne who left the company at the end of April. Nido shares were steady at 50 cents at 11am.... Read more

Opinion - Greg Jericho: Don't worry, Australia isn't facing a Greek tragedy. After some pretty dumb comparisons between Australia and Greece, it's worth noting that rather than suggest austerity here, the IMF thinks we might be trying to hit surplus too soon, writes Greg Jericho... Read more

Opinion - Michael West: Big pharma​ bosses front up to Senate inquiry into corporate tax avoidance... Read more

International Headlines

U.S. Market Report: U.S. stocks came down from session highs but were still trading higher Wednesday as investors looked beyond the latest developments in Greece and focused on economic data. The main indexes steadily paired early morning gains, aided by a sharp drop in energy stocks. The S&P 500 were 8 points, or 0.3%, higher to 2,069. Financials led the gains on the benchmark index, while energy stocks — the only sector trading lower — fell following a sharp drop in oil prices. The Dow Jones Industrial Average was up 77 points, or 0.4%, to 17,697. The Nasdaq Composite rose 9 points, or 0.2% to 4,996... Read more

North/South Americas Market Report: North and South American markets are mixed. The S&P 500 is higher by 0.36%, while Brazil's Bovespa is off 0.73%. Shares in Mexico are unchanged with the IPC at 45,053.01... Read more

European Market Report: European markets closed sharply higher today with shares in Germany leading the region. The DAX is up 2.15% while France's CAC 40 is up 1.94% and London's FTSE 100 is up 1.34%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Hang Seng gained 1.08% and the Nikkei 225 rose 0.46%. The Shanghai Composite lost 5.23%... Read more

Oil prices eased in Asian trading on Wednesday after Greece missed a 1.5-billion-euro ($1.7-billion) payment to the International Monetary Fund. US benchmark West Texas Intermediate for August delivery fell 68 cents to $58.79 while Brent crude was down 58 cents at $63.01.... Read more

Gold futures fell overnight in New York, even amid the unsettling story from Greece, showing that investors were not looking to the yellow metal as a safe haven. Gold for August delivery fell 0.6% to settle at US$1,171.80 an ounce on the Comex... Read more

Which markets are closed for U.S. Independence Day?... Read more

US manufacturing growth eased in June despite jobs growth, but there was better news for the construction sector, according to two surveys. Markit's latest Purchasing Managers' Index fell to 53.6, from 54 in May, the lowest reading since October 2013. Although any reading above 50 indicates expansion, analysts said the strong dollar was weighing on factory orders... Read more

Here's What to Watch for in Tomorrow's Jobs Report The employment picture is healing, though some weakness remains... Read more

G. M. Sales Dropped 3% in June... Read more

Macy's cutting ties with Donald Trump over 'disparaging' comments... Read more

The insurer Ace said on Wednesday that it had agreed to acquire the Chubb Corporation for $28.3 billion in cash and shares. The deal will combine two large providers of property and casualty insurance to businesses and individuals, as well as reinsurance... Read more

The Bonds That Broke Puerto Rico. When Puerto Rico’s governor told lawmakers and citizens on Monday that the commonwealth could not pay its $72 billion in debt, many wondered how a small, seemingly low-key American island in the Caribbean could have amassed a debt big enough to crush it... Read more

Greece's Prime Minister Alexis Tsipras has made a defiant speech as cash withdrawal limits begin to bite for Greek bank customers. Mr Tsipras promised Greeks their pensions and wages would be safe... Read more

Dijsselbloem Says No Grounds for More Talks Ahead of Greek Vote... Read more

The outlook for the UK's financial stability "has worsened" in the light of events in Greece, Bank of England governor Mark Carney has warned. Risks in relation to Greece include a reduction in the risk appetite of businesses and a knock-on effect on households, Mr Carney said... Read more

The situation with the economy remains difficult, the situation of foreign markets for Russia is unfavorable, Russian Prime Minister Dmitry Medvedev said... Read more

China ready to develop cooperation with Russia in aviation, high-speed railways... Read more

World Bank warns China on financial sector... Read more

Chinese manufacturing activity saw a slight improvement in June, official data suggested Wednesday, but analysts said more stimulus to the world's number two economy would likely be needed to re-energise the sector. The official Purchasing Managers' Index (PMI) released by the National Bureau of Statistics (NBS) came in at 50.2 last month, matching May's six-month high.... Read more

Samsung merger still on the table despite Elliot effort... Read more

Credit ratings agency Fitch surprised analysts by upgrading Malaysia's sovereign outlook to "stable" from "negative", boosting the country's currency on Wednesday and providing welcome relief to the country's controversy-plagued government... Read more

Apple Music has arrived in 100 countries, including India where the new streaming service is available at among the cheapest rates globally. At 120 rupees ($1.89) for a month’s-worth of music streaming, Apple Inc. has opened its online music library to Indians at a price almost 10 times lower than the entrance fee for customers in the U.S., where a 30-day subscription costs $9.99... Read more

Opinion: Amotz Asa-El: Greece should leave Europe, join with the Levant... Read more

Opinion - Kenneth Rogoff: Why the Greek bailout failed. Structural reform cannot be imposed from the outside, Rogoff says... Read more

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