ASB Securities Morning Brief for Thursday, 05 March 2015
Thursday, 05 March 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares fell, led by Meridian Energy and MightyRiverPower as demand abated for companies with dependable dividend streams. Warehouse Group rose ahead of reporting its earnings this week. The NZX 50 Index fell 19.579 points, or 0.3 percent, to 5874.082. Within the index, 22 stocks fell, 19 rose and nine were unchanged. Turnover was $156 million... Read more

The New Zealand dollar was little changed after figures showed Australia's economy got a boost from increased consumer spending, offsetting the decline in its resources sector. The kiwi traded at 75.55 US cents from 75.58 cents at 8am, up from 75.26 cents yesterday. The local currency increased to 96.59 Australian cents from 96.35 cents yesterday... Read more

The Invercargill City Council will look to further build on a free trade agreement that resulted in a $150 million increase in exports from New Zealand to Taiwan over its first year. Taipei Economic and Cultural Office representative David Wu was in Invercargill for talks with the council on Tuesday to discuss opportunities in the region... Read more

Residential values nationwide have increased by 3.1% over the last three months and 6.4% over the last year, according to the latest QV data... Read more

Auckland house prices up 13% on last February... Read more

More listings flowed on to the Auckland property market in February and led to a drop in the average sales price, Barfoot and Thompson data shows. The 1771 new listings in February was up 47.7% on January and was the highest number in 16 months. The increase meant there was a significant rise in buyer choice.... Read more

Crisis persists despite building rise. Growth in activity strongest in almost 15 years but critics say it is not enough to relieve Auckland’s housing shortage.... Read more

Auckland still has world's third best quality of living - survey... Read more

Aggressive KiwiSaver schemes have been turning in cracking returns now for a number of quarters in a row and our unique 'regular savings' model shows this trend continues to the end of December 2014... Read more

Terms of reference for the Financial Advisers Act review have been met with cautious optimism by the industry.... Read more

Dairy prices firmed at the latest GlobalDairyTrade auction, backing expectations that Fonterra will meet its $4.70 a kg farmgate milk price this season, but concerns remain about muted demand from New Zealand's biggest customer - China... Read more

Drive to export milk questioned. New Zealand's constant drive to produce more export milk could be self-defeating, dairy farm syndicate manager Andrew Watters says. Watters, an executive director of MyFarm group, said New Zealand's big contribution to the supply of globally-traded milk could be counter-productive... Read more

The volume and value of cash trading on New Zealand's share market rose in February, snapping a decline a month earlier, and helped push the value of the local equity market above $100 billion... Read more

Spark sells Telecom Rentals for $106M to Australia's FlexiGroup. Shares in Spark slipped 0.3 percent to $3.28, and are up 5.6 percent so far this year. ASX listed FlexiGroup last traded at A$3.50, having gained 17 percent this year.... Read more

Analyst gives Spark the nod for flicking off Telecom Rentals... Read more

AsureQuality posts 5% drop in 1H profit as costs rise; expects to beat FY target... Read more

Australian supermarket giant Woolworths has sold its stake in The Warehouse to the family behind Farmers and jewellery chain Pascoes at a $110 million loss. The deal doubles the James Pascoe company's holding in The Warehouse to 16.4 per cent and draws a line under Woolworths' unsuccessful struggle to take over The Warehouse nearly seven years ago... Read more

Rising costs reflected in bionics firm's losses. Rex Bionics, the New Zealand company listed on the London Stock Exchange's AIM market, said higher costs to commercialise its robotic exoskeletons widened its full-year loss to £3.56 million ($7.24 million) from £480,000 a year earlier... Read more

Kiwi wearable technology start-up Footfalls & Heartbeats has signed a licensing deal with German medical company Medi for its compression sensor fabric... Read more

Leading New Zealand GPS company Navman Wireless has merged with United States firm Teletrac to expand the company's global reach. The company operates GPS tracking for fleet and asset management... Read more

AIA is seeing good results from its work with the independent adviser market in New Zealand, its chief executive says.... Read more

Broadband plans for households at "gigabit" speeds are likely this year in Christchurch. It won't be the first city or region to offer households these super fast broadband plans, though. The Hamilton-owned fibre lines company Ultrafast Fibre did that last year, Christchurch's fibre lines company Enable says... Read more

More Kiwis have income protection. Income protection cover rates have improved, the latest Financial Services Council statistics show... Read more Launches Booking Now in New Zealand, the First Truly Global App for Spontaneous Bookers... Read more

BDO New Zealand is launching a world-first ‘real-time’ business advisory service with a nationwide roll-out of Xero add-on CrunchBoards. Developed by two United Kingdom business owners, CrunchBoards is the first software to enable dynamic data display, design, sharing and manipulation. It spread across 46 countries within six months of its launch... Read more

Newpark has appointed Judy Wedgwood as its new training and compliance manager.... Read more

The Reserve Bank is cutting staff numbers as it restructures its operations... Read more

JPMorgan's NZ branch gets formal warning for 2013 lapse... Read more

The Commerce Commission is assessing a complaint laid by Vodafone over Spark's claim that Spark has the largest 4G mobile network. The competition watchdog said it had yet to decide whether to launch a formal investigation... Read more

Ministry of Education says it is entitled to sue as product damages property and risks school users’ health. Carter Holt Harvey's cladding sheets and systems used in 880 school buildings were "inherently defective" and the Ministry of Education is entitled to sue the building products maker, the Court of Appeal has heard.... Read more

Opinion - Pattrick Smellie: The lonely life of the NZ oil explorer... Read more

Opinion - Christopher Adams: Stock Takes: Martin Aircraft stock proving volatile... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket closed softer for a second day as economic data showed Australia’s GDP grew at a rate slightly slower than expected and mining stocks and financials weighed on the market. At the 4.15pm (AEDT) official market close, the benchmark S&P/ASX200 index was down 32.3 points, or 0.54 per cent, at 5901.6, while the broader All Ordinaries index slipped 31.4 points, or 0.53 per cent, to 5871.5.... Read more

The Australian dollar remains above US78 cents after the Reserve Bank’s surprise decision to keep rates on hold at 2.25 per cent. At 7am (AEDT), the local currency was trading at US78.21 cents, down from US78.35 cents yesterday.... Read more

Australia's economy grows 2.5% on year... Read more

Pressure is mounting on the Reserve Bank to slash interest rates in coming months after new figures revealed Australia's economy grew at a sluggish pace in 2014. Economic growth was a below-average 2.5 per cent last year, official figures released on Thursday showed... Read more

GDP must grow at least to 3% to cut unemployment: RBA’s Edwards... Read more

Concerns RBA rates decision was leaked. Investigations are under way after suspicious moves by the Australian dollar and share market in the seconds before Tuesday's Reserve Bank interest rate decision.... Read more

Older nation means more cuts needed. Australia's finances will sink under the weight of spending on health, education and the age pension unless the Federal Government makes even deeper cuts.... Read more

David Murray calls for controls on hot housing market. Australia needs to consider introducing limits on borrowing to rein in house-price growth and avoid further risk to the financial system, says the head of the Abbott government's financial systems inquiry, David Murray... Read more

Perth is in the midst of a growing property ownership struggle, with a 10 per cent fall in the rate of people who own their homes and a 5 per cent jump in those with a mortgage over the past 20 years... Read more

Sydney beats Melbourne for living standards... Read more

An extraordinary legal technicality and WA's Labour Day public holiday has left the receivers and creditors of Griffin Energy facing a $150 million shortfall on the sale of its Collie coal business to Lanco Infratech four years ago... Read more

World Bank predicts iron ore glut set to continue, putting pressure on WA royalties... Read more

Mount Ridley Mines has been granted a trading halt by the ASX pending the release of capital raising details.... Read more

Woodside urged to get busy with Browse. The federal opposition has urged Woodside to get busy with the Browse gas project after a major part of the resource was confirmed as being within West Australian boundaries... Read more

PHW Consolidated raises funds to support acquisition... Read more

Gulf Industrials is to raise $3 million through a share placement for exploration opportunities and advance its activities in Africa... Read more

Glencore delivers a left hook to Rio Tinto... Read more

Macquarie Group is set to acquire an aircraft operating lease portfolio from AWAS Aviation Capital, after earlier placing its shares in a trading halt pending the release of a statement to the market about a capital raising to help fund the purchase. The purchase price for the 90 aircraft is $5.1 billion, while the capital requirement is expected to be $600 million... Read more

Macquarie Group pays its staff too much, says rival investment bank UBS... Read more

The federal government’s decision to consolidate five of its departments into one Sydney CBD office building is set to pay off for Dexus, with the group close to securing the tenant at its tower at 83 Clarence Street... Read more

Australian Pharmaceutical Industries has upgraded its fiscal first-half profit forecasts, tipping a 30 per cent jump in earnings following strong trading at its Priceline and Priceline Pharmacy store network in January and February. The company (API) today said it now expected a profit before one-time items of at least $21.1 million in the six months through February... Read more

FlexiGroup buys NZ’s Telecom Rentals... Read more

Outgoing Telstra chief executive David Thodey has used one of his final speeches in the top job to assert that the telco must always be willing to put itself at risk to beat rivals. Mr Thodey, who stepped down in late February, made the comments in a speech at Mobile World Congress in Barcelona – the industry's biggest annual event. He said geographic expansion and constant reinvention were vital for Telstra's success... Read more

The Federal Treasurer has approved a $1.4 billion takeover bid by Brazilian meat company JBS, to acquire Australian smallgoods producer Primo. Joe Hockey's decision follows an announcement by the Australian Competition and Consumer Commission (ACCC) last month that it would not oppose the move... Read more

Australian rice producer SunRice is seeking feedback from growers and shareholders on a new proposed capital structure that could lead to a listing on the Australian Securities Exchange. The potential new capital structure would include SunRice delisting from the National Stock Exchange and the creation of the SunRice Fund, which would be listed on the ASX... Read more

Defence contractor Thales looks set to be handed $600 million to overhaul Australia's civil and military air traffic management systems after being awarded an advanced work contract for system design... Read more

Kordia back in black as it shakes up Oz unit. Kordia Group, the broadcasting and telecommunications network operator, returned to a profit in the first half on an improved performance at its Australian business.... Read more

IAG facing $90m hit from Cyclone Marcia, but no change to guidance... Read more

Reserve Bank of Australia wants airlines to lower fees for passengers booking flights on credit cards... Read more

A banana plantation in Tully has been quarantined after initial tests found a plant had tested positive to a devastating disease that has wiped out banana crops in other areas... Read more

The gender pay gap has hit a record high of 18.8 per cent according to Bureau of Statistics (ABS) figures, prompting calls for the Federal Government to reverse the upward trend. Men now earn almost $300 more per week than women based on the average weekly earnings for full-time workers. The latest figures represent the biggest gender pay gap since the ABS began collecting the data in 1994... Read more

The Federal Government is investigating claims that foreigners have illegally bought homes in Perth... Read more

A property analyst has cast doubt on how much the Treasurer's order to sell a foreign-owned Sydney mansion would help average house hunters. Joe Hockey announced in Parliament on Tuesday that Point Piper property Villa del Mare, purchased last year for $39 million by a Hong Kong-owned business, must be sold... Read more

Opinion - Callam Pickering: The true weakness of the economy has been revealed... Read more

Analysis - Ian Verrander: Short-sellers deliver epitaph for Bernie Brookes' time at Myer... Read more

Opinion - Stephen Grenville: Will the Trans-Pacific Partnership be a good deal for Australia? The Trans-Pacific Partnership is close to the make-or-break stage. It will either get US Congressional blessing soon or lose momentum and slip from the agenda... Read more

International Headlines

U.S. Market Report: U.S. stocks were lower on Wednesday, with indexes on track for a second straight day of declines, as a recent rally gave investors reason to exercise caution. After a sluggish start to the year, equities charged higher in February, helping send both the Dow and S&P to record highs on Monday, and the Nasdaq hurdled the 5,000 level for the first time in 15 years... Read more

North/South Americas Market Report: Markets closed lower across the region as at the most recent closing prices... Read more

European Market Report: European markets finished higher today with shares in France leading the region. The CAC 40 is up 0.99% while Germany's DAX is up 0.98% and London's FTSE 100 is up 0.44%.... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 0.51%, while the Hang Seng led the Nikkei 225 lower. They fell 0.96% and 0.59% respectively.... Read more

Brent crude oil extended losses to fall below $60 a barrel on Wednesday after a much larger-than-expected build in U.S. crude stocks, while Saudi Arabia's oil minister said he expected the market to balance itself and prices to recover... Read more

U.S. service sector activity ticks up in February... Read more

Private-sector employment gains continued in February but at a slower pace than in the prior month... Read more

U.S. mortgage applications rise in latest week: MBA... Read more

Bond-Trader TruMid Sells Stake Valuing Company at $75 Million... Read more

Abercrombie & Fitch's stock fell 2% in premarket trade Wednesday, after the teen apparel retailer missed fiscal fourth-quarter sales estimates, but topped profit expectations... Read more

U.S. retailer Target Corp, which has been battling back after a massive data breach and sluggish performance, on Tuesday said it will eliminate several thousand jobs, mainly from headquarters locations in the United States and India, as it aims to cut $2 billion in costs over two years... Read more

Insurers say driverless cars could hurt business... Read more

McDonald’s Corp.’s U.S. restaurants will stop serving chicken raised with some antibiotics in the next two years in a bid to regain diners that have fled to rivals like Chipotle Mexican Grill Inc. in search of healthier food... Read more

DuPont rejects activist request to change how directors are elected. DuPont shares closed down marginally at $78.07 on the New York Stock Exchange on Tuesday... Read more

Bank of Canada Keeps 0.75% Rate as Inflation Risks Balance... Read more

For first time in years, euro economy starts surprising on upside. The euro zone economy is sprouting more green shoots than anticipated just as the European Central Bank fires up a money printing program worth more than 1 trillion euros... Read more

Eurozone retail sales rose for a fourth consecutive month in January, official statistics have shown, indicating the zone's economy may be picking up... Read more

UK wins in European Central Bank court challenge... Read more

German Chancellor Angela Merkel and European Commission president Jean-Claude Juncker have sidestepped a question about a possible third bailout for Greece, saying that the current focus was on completing a second bailout for the country... Read more

Europe will fight for own standards in U.S. trade talks: Merkel... Read more

UK bank Standard Chartered has reported a steep fall in full-year profits, compounding recent troubles for the emerging-markets focused bank. Pre-tax profits - including exceptional items - were $4.24bn (£2.76bn), down 30% on 2013, the bank said... Read more

RBS boss says no number set for 'significant' investment bank job cuts... Read more

Britain's state-rescued Royal Bank of Scotland will axe up to 14,000 jobs by 2019 in a retreat from investment banking, the Financial Times reports... Read more

Yury Trutnev: We must enter dynamic Asian markets, it’s the only way to win... Read more

Soft drinks giants PepsiCo and Coca-Cola Hellenic have announced that they are to halt production at key plants in Russia in connection with the ongoing financial crisis... Read more

Ukraine's central bank has sharply raised interest rates from 19.5% to 30% in an effort to curb inflation and prop up its beleaguered currency. The new benchmark refinancing rate takes effect on Wednesday... Read more

U.S. firms in China expect less rosy times as economy slows: survey... Read more

Activity in China's services sector grew modestly in February as new orders rose at their quickest pace in three months, a private survey showed just a few days after the central bank cut interest rates to stimulate the world's second-largest economy... Read more

Hong Kong stocks fall, as markets wait to hear China’s plans... Read more

Taiwan has snubbed a multi-million dollar funding pledge by China's e-commerce giant Alibaba designed to encourage the island's young entrepreneurs, saying youth talent should stay away from the mainland... Read more

Toyota Motor Corp on Wednesday promoted more foreigners to senior posts, including the first woman and first African-American to hold executive titles, diversifying a management team long dominated by Japanese men... Read more

Japan slams brakes on Uber taxi service... Read more

Japan has clawed itself out of the grasp of recession, with an annualised GDP growth rate of 2.2% in the last quarter of 2014. The quarter-on-quarter GDP numbers show a growth increase of 0.6% in October to December, up from -0.6% the quarter before... Read more

India’s federal budget unveiled Saturday offered some clarifications on taxation for foreign investors which lawyers say will help ease concerns about investing in India. Among the most important was Finance Minister Arun Jaitley’s announcement that the government was deferring a new set of tax rules that would allow Indian authorities to scrutinize deals that they believe have been structured specifically to avoid tax... Read more

India's central bank announced on Wednesday a second surprise cut in interest rates in two months as it forecast a further easing of inflation, triggering a surge in share prices... Read more

Opinion - Jeremy Warner: Only mass default will end the world's addiction to debt. As global debt rises off the scale, creditors stand to take a huge hit in a threatened tsunami of defaults... Read more

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