ASB Securities Morning Brief for Friday, 28 August 2015
Friday, 28 August 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose in a global rebound after Wall Street benchmarks rallied some 4 percent overnight. A2 Milk Co, Auckland International Airport and Metro Performance Glass clawed back from recent losses. The S&P/NZX 50 Index rose 57.17 points, or 1 percent, to 5634.95. Within the index, 38 stocks rose, eight fell and four were unchanged. Turnover was $184 million... Read more

The New Zealand dollar fell as traders continued to wind back bets that the US Federal Reserve will raise interest rates as soon as September, helping lift US stocks and the greenback. The kiwi dropped to 64.34 US cents as at 5pm in Wellington from 64.93 cents in late trading yesterday. The trade-weighted index fell to 69.67 from 70.12 yesterday... Read more

Health and safety reform bill passes, amid division over worker representation... Read more

IRD estimates Govt's trumpeted new tax on properties sold within two years will raise just $5 million a year in extra revenue... Read more

The government will introduce a new consumer welfare test to anti-dumping laws which it says will balance the interests of end-users with those of local manufacturers. Commerce and Consumer Affairs Minister Paul Goldsmith said the test will be written into legislation which will be tabled in Parliament later this year. The test will weigh up the impact dumped goods have on a manufacturer against the wider effects on industries and consumers, before duties are imposed... Read more

Major rental changes in Green Bill. Minimum standards for rental properties are once again being pushed with the launch of a Green Party bill which would also introduce significant changes to tenancy regulations... Read more

Eleven more Special Housing Areas announced across Auckland... Read more

The Government is trumpeting the creation of 11 new special housing areas to help tackle soaring Auckland house prices. But it is being accused of "spin" and failing to build enough houses to address a worsening shortfall as migrants flock to the city... Read more

KiwiSaver touted as a mechanism to diversify our retirement savings. NZIER calls for govt to strengthen KiwiSaver scheme, to get ageing population diversifying investments beyond NZ property... Read more

Treasury wrong to conclude KiwiSaver doesn't increase savings - finance lobby... Read more

Landcorp profits plunge 84pc... Read more

Landcorp Farming, which is taking on debt to convert former forestry land into dairy farms, won't pay a dividend this year, highlighting the friction between the state-owned farmer's long-term strategy and the government's demand for regular payments in preference to investment... Read more

Rabobank NZ warns on potential impact to it from dairy prices staying low for an extended period... Read more

Scales Corp shares rose 2 percent after the country's biggest apple exporter boosted first-half profit 61 percent as its Mr Apple unit beat expectations. Net profit climbed to $32.2 million, or 23.8c per share, in the six months ended June 30, from $20.6 million, or 17.3 cents, a year earlier, the Christchurch-based company said in a statement. The shares rose 4c to $2.02, and have climbed 38 percent this year... Read more

New Zealand Oil & Gas posted an after tax loss of $6.2 million for the June year, after writing down the value of its stake in the offshore Taranaki Tui oil field by more than $36 million. World oil prices have slumped heavily since early last year, falling by more than half from the peaks in 2014. That had led to the big write down on the Tui field... Read more

Hellaby Holdings, the NZX listed diversified investment company, returned to profit in 2015 as it benefited from a series of acquisitions a year earlier, and has decided to put its footwear units up for sale after writing down their value in 2014. The Auckland based company posted a profit of $23.4 million, or 28.6 cents per share, in the 12 months ended June 30, from a loss of $129,000, or 1.2 cents, a year earlier, it said in a statement... Read more

Casino operator SkyCity is set to pass one of the final hurdles before construction of the much heralded International Convention Centre begins in downtown Auckland. On Friday Auckland Council commissioners will hear the company's resource consent application to build the $450 million convention centre adjacent to its Victoria Street property... Read more

Delegat Group, New Zealand's largest listed wine company, posted a 24% decline in annual profit as it wrote down the value of its grapes and financial instruments used to limit its foreign currency and interest rate exposure. Net profit fell to $32.5 million, or 32.16 cents per share, in the year ended June 30, from $42.6 million, or 42.12 cents, a year earlier, the Auckland-based company said in a statement. Excluding the writedowns, operating net profit after tax increased 10% to $34.4 million, ahead of the company's $34 million forecast... Read more

Mobil says Z purchase of Caltex chain concentrates loyalty schemes.... Read more

Vodafone NZ posts $120.7m full-year loss on Telstra costs, weaker sales... Read more

TVNZ reported a net profit after tax of $28.1 million for the year ending June 2015, up $10 million on the prior year. TVNZ CEO Kevin Kenrick said the year's financial results are particularly encouraging given the tectonic shifts currently occurring in the media industry... Read more

Tourism Holdings, the campervan rental company,has boosted annual profit 81 per cent, slightly ahead of guidance, after strengthening its balance sheet and improving margins. Profit rose to $20.1 million in the year ended June 30, from $11.1 million a year earlier and ahead of its April guidance of between $19.5 million and $20 million. Sales rose 4 per cent to $237 million. The board declared a final dividend of 8c per share, making the total for the year 15c a share, up from 11c in the previous year.... Read more

PrimePort Timaru profits jump to $3.9 million... Read more

Airwork Holdings, the listed aviation services firm, posted a 58 percent gain in full-year profit, as growth in earnings from helicopter engineering and leasing made up for a weaker performance from fixed-wing aircraft. Net profit rose to $15.5 million, or 30.1 cents a share, in the 12 months ended June 30, from $9.8 million, or 20.8 cents, a year earlier, the Auckland based company said in a statement... Read more

Cavalier Corp, which is restructuring its business to revive its earnings, expects to cut debt by $6.5 million from the sale of its Ontera Modular Carpets unit. The Auckland-based company flagged the sale to Australia's Milliken & Co earlier this month, and anticipates the deal will settle in one or two weeks, it says. The deal is conditional on key Ontera employees accepting jobs with Milliken and the transfer of certain contracts and leases to the Australian company... Read more

Spark says cull of 400 staff won't affect service... Read more

F&P Healthcare lifts earnings guidance; CEO Mike Daniell to retire... Read more

ANZ appoints a new boss for its broker business. Penny Burgess is the new Head of Specialist Distribution for ANZ Bank and is responsible for the broker and mobile channels as well as staff banking and ANZ@Work Packages... Read more

Government, Auckland agree at last on transport funding approach... Read more

Let’s Get Auckland Moving says EMA. The joint announcement around central and local government working more closely in regards to resolving Auckland’s transport issues has been hailed as a step in the right direction by the Employers and Manufacturers Association (EMA).... Read more

The New Zealand Recreation Association (NZRA) is calling on the Government to clarify the implications of the Health and Safety Reform Bill passed in Parliament today, to ensure New Zealanders aren’t stripped of the recreation opportunities enjoyed by past generations. The Bill aims to make workplaces more accountable for the health and safety of workers and other people who are visiting workplaces... Read more

Truck shops target poor with sharp prices, lower-quality goods, non-compliant contracts, regulator says... Read more

Home Direct Welcomes Commerce Commission Report on Mobile Traders... Read more

Facebook trouble for Newland. Disagreement over terminology used in one of Olly Newland’s Facebook advertisements has led to an Advertising Standards Authority ruling against the veteran property commentator. Newland attracted the ire of the complainant after a Newland Burling and Co Ltd Facebook ad urging consumers to take advantage of a commercial property boom appeared in the complainant's newsfeed... Read more

An ex-Mike Pero Mortgages broker has been barred from competing with the business while a wider dispute between it and a group of former franchisees is resolved. The ruling, from a High court judge, may mean the mortgage broker will need to sell his house to make ends meet... Read more

Former high-profile Nelson financial adviser Tony Mount has launched another appeal against his convictions.... Read more

Flavell launches ministerial investigation into Aupouri Maori Trust Board... Read more

The fight between the family of the late philanthropist Hugh Green is continuing, with two siblings now applying to remove their sister from two trusts that control much of their father's $400 million empire. Maryanne Green in June won a major courtroom victory for control of the Green Group, which was started by her father in the 1950s when he immigrated here from Ireland... Read more

Analysis - Tony Baldwin: Why hasn't Fonterra worked? Created in 2001, Fonterra was heralded as a 'breakthrough idea' meant to help New Zealand 'catch the knowledge wave'. 14 years on, there's been no economic transformation, writes Tony Baldwin... Read more

Opinion/Analysis - Grant Davis: Making sense of sharemarket turmoil... Read more

Opinion - Shelley Bridgeman: How much of the hype about the property market is true?... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket followed its US counterpart’s lead today, jumping for a second straight session as investors swept in on recently battered stocks. The move on the local bourse followed a 4 per cent surge on Wall Street overnight on better-than-expected economic data and softening expectations of a Federal Reserve rate hike in September, amid hopes global markets were beginning to stabilise after several sessions of extreme volatility. At the official 4.15pm (AEST) close, the benchmark S&P/ASX200 had risen 60.5 points, or 1.17 per cent, to 5233.3, while the broader All Ordinaries had lifted 63.7 points, or 1.23 per cent, to 5242.6.... Read more

The Australian dollar has gained ground after a rocky night in which the greenback bolstered on solid US economic data. At 7am (AEST), the currency was trading at US71.22 cents, up from US71.15 cents yesterday... Read more

Australia's capital expenditure has fallen more than expected, with a steep drop in mining construction to blame, leading one analyst to label it recessionary. Bureau of Statistics figures show actual spending on buildings and structures dropped 5.6 per cent in the June quarter, led by a 10.9 per cent fall in mining... Read more

Newcastle Council abandons fossil fuel investments... Read more

Transfield Services aims to send fund managers to Nauru and Manus. Some of Australia's top fund managers may get guided tours of asylum-seeker detention centres on Nauru and Papua New Guinea's Manus Island under a plan by Transfield Services to assure industry superannuation funds that it is not committing human rights abuses.... Read more

Gold profits glisten in bright FY15... Read more

Saracen Mineral Holdings says it is debt free and poised to double gold production within two years as it talks up the development of its Thunderbox gold mine. Saracen posted an $11.1 million net profit for last financial year, on increased revenue of $249.9 million for the period... Read more

Northern Star Resources’ annual profit has soared 320 per cent to $92 million on the back of its recent mine acquisition spree. The gold miner’s underlying profit was up 198 per cent to $108.9 million. Shares in the company were off three cents, or 1.57 per cent, to $1.88 at 9am.... Read more

Investor interest in RNI NL was piqued yesterday, with shares spiking some 13% as plans firmed to sell the company’s gold assets to Metals X. RNI shares were trading steadily today at A$0.017 after the company signed a debt repayment agreement with Taurus Resources No 2 Fund expected to pave the way for the gold sale to Metals X... Read more

Flight Centre shares have surged more than 10 per cent after the travel retailer defied sceptics with a better than expected profit result and stronger outlook for the year ahead... Read more

Ausdrill posts $175.6m loss... Read more

Doray Minerals has been granted a trading halt this morning pending details in relation to funding for the Deflector Project... Read more

Lycopodium has slipped into the red for the year on the back of the slowdown in the resources sector. The engineering and project management company posted a loss of $1.02 million for the year on the back of a 20.6 per cent fall in revenue to $122.8 million... Read more

Engineering construction giant WorleyParsons has swung into the red with a $54.9 million full year loss... Read more

LifeHealthcare Group acquisition to increase earnings... Read more

MMJ Phytotech is preparing to provide an update on its CBD (Cannabidiol) pill, with the ASX granting the company a trading halt to prepare. The company recently raised $4.8 million and has previously said that it is expecting revenues from CBD pill sales... Read more

Cafes fatten profits for Retail Food Group. The owner of Brumby's bakeries, Pizza Capers and Donut King expects its string of recent acquisitions in the cafe market will fatten its profits. Retail Food Group's shares surged 48 cents, or 10 per cent, to $5.28.... Read more

Southern Cross Austereo has posted a second straight year of losses as it continues to repair the damage caused by the loss of radio stars Kyle and Jackie O. The owner of stations including 2DayFM and FOX FM, and the Triple M network, suffered a 20 per cent fall in earnings from metropolitan radio in the year to June, amid a weaker ratings performance. The company's shares were up 1.5 cents at 93 cents.... Read more

Nine Entertainment chief David Gyngell has conceded his network will not achieve its goal of taking 40 per cent of the TV advertising market this year. But Mr Gyngell says he is confident the group is clawing back advertising dollars ­regardless of the difficult ­environment... Read more

Nine Entertainment Co chief executive David Gyngell has backed Foxtel, along with Fox Sports, to hold on to the pay television rights to the National Rugby League, throwing cold water on suggestions the free-to-air broadcaster is looking to secure them for its subscription video on-demand service Stan... Read more

Surfwear group Billabong has posted its first full year profit in four years, but insists it's a good start, not a great win. The company cruised back into the black with a $4.2 million net profit for 2014/15, a dramatic turnaround from its $234 million loss a year earlier... Read more

Boral FY profits lift 48%, buoyed by profitable US business... Read more

Newly-floated mortgage broker Australian Finance Group says it has beaten prospectus forecasts in reporting a $20.4 million annual profit, up from $17.9 million a year earlier. On a proforma basis and excluding the impact of its property demerger, net earnings of $19.3 million were 8.4 per cent ahead of prospectus forecasts... Read more

ComOps Limited has some acquisition news to reveal, with the ASX granting the company a trading halt to organise. The company said that it expects to reveal the details before the open tomorrow, Friday 28th August 2015... Read more

Imugene Limited appoints Leslie Chong as chief operating officer... Read more

WA roads department hunts for a new IT chief... Read more

One of the world’s biggest drilling companies has pleaded guilty to breaching its duty to provide a safe workplace following the death of two workers on its offshore oil rig. Stena Drilling Australia, part of the global giant, entered the plea in the Magistrates Court of Victoria yesterday and will be sentenced next Thursday... Read more

Opinion/Analysis - Simon Frazer: Low interest rates keep mortgage payments in check but real debt struggle could be hidden... Read more

Opinion - Andrew Schmulow: Australia's banks are safe, so deposit levy is looking like a revenue grab.... Read more

Opinion - Elizabeth Knight: Networks do it tough as $2 billion is wiped off the value of television licences... Read more

Opinion - Malcolm Maiden: Confusion reigns as China's market crashes but some things are clear... Read more

International Headlines

U.S. Market Report: U.S. stocks extended their rally on Thursday, raising hopes that the worst of Wall Street's recent turmoil was behind it, after further evidence that the economy was on a solid footing. The three major indexes were up more than 2 percent in early afternoon trading and were poised for their biggest two-day gain since 2009... Read more

North/South Americas Market Report: North and South American markets are sharply higher today with shares in Brazil leading the region. The Bovespa is up 3.17% while Mexico's IPC is up 2.19% and U.S.'s S&P 500 is up 1.80%... Read more

European Market Report: European markets closed sharply higher today with shares in London leading the region. The FTSE 100 is up 3.56% while France's CAC 40 is up 3.49% and Germany's DAX is up 3.18%... Read more

Asian Market Report: Asian markets closed sharply higher today with shares in China leading the region. The Shanghai Composite is up 5.34% while Hong Kong's Hang Seng is up 3.54% and Japan's Nikkei 225 is up 1.08%... Read more

Oil rose in Asia Thursday as dealers digested a mixed US energy report showing a dip in crude inventories, but barely any decline in production despite sinking prices. US benchmark West Texas Intermediate for October delivery gained 87 cents to $39.47 while Brent crude for October rose $1.01 to $44.15 in afternoon trade. The US Department of Energy said Wednesday US crude supplies unexpectedly fell by 5.5 million barrels for the week ending August 21, indicating healthy demand... Read more

World is still hooked on cheap money. Central bankers are swooping to the rescue of shaky economies, soothing investor panic for now but highlighting a global addiction to easy money.... Read more

China's shrinking copper appetite is killing US jobs... Read more

The National Association of Realtors says its US pending homes sales index held essentially steady in July, evidence of continuing strength in the country's real-estate market. NAR's pending home sales index edged up to 110.9 from 110.4 in June, and held on to a 7.4 per cent gain year over year... Read more

Finally, some good news this week. the U.S. economy was in even better shape than we thought between April and June. The U.S. economy grew 3.7% in the second quarter, a very big upward revision than the first official estimate, 2.3%, according to the Commerce Department's measure of gross domestic product, the broadest measure of economic activity. Economists projected the new number to be 3.2%... Read more

August U.S. auto sales seen down 3.9 percent: JD Power/LMC... Read more

Tiffany & Co posted a 15 percent drop in quarterly earnings due to a strong dollar and the cost of developing and bringing out new products, sending shares of the luxury jeweler to an 18-month low. The company, known for its pale blue boxes and iconic Tiffany Diamond, also forecast a surprise 2-5 percent decline in earnings for the year ending January. Tiffany's shares fell as much as 4.2 percent.... Read more

AIG seeking $1.76 billion in 'life settlements' trial in New York... Read more

Tesla's new Model S P85D is so good it broke Consumer Reports' scoring system. Consumer Reports rates vehicles on a zero-to-100 scale, but Tesla's high-performance, all-wheel-drive car scored 103... Read more

Caterpillar Inc plans to cut 475 more jobs amid revenue decline... Read more

The invitations have arrived. Apple's will hold a press event in San Francisco on Wednesday, September 9, at which it is widely expected to debut its new generation of iPhones.... Read more

The U.S. Labor Department is leaning toward denying requests for regulatory relief by three big foreign banks that pleaded guilty to manipulating Libor interest rates but want to keep managing retirement accounts for clients. In letters to units of Deutsche Bank, UBS and the Royal Bank of Scotland (RBS.L), the department said it has "tentatively decided not to propose" exemptions sought by the banks due to their "failure to demonstrate that the exemptions would be in the interest of plan clients."... Read more

One of the most senior figures at the Indian giant, Tata Group, has said that its major businesses in the UK gain from membership of the European Union. Tata Sons Group executive council member Nirmalya Kumar told the BBC that access to the single market made trade easier with the rest of Europe. Mr Kumar reports directly to Cyrus Mistry, the chairman of Tata Group, and is head of the group's strategy... Read more

Google Inc has rejected EU antitrust charges that it abused its market power, exposing the company to the risk of a hefty fine if it does not alter its business practices... Read more

Greece has named its top judge as caretaker prime minister to organise early elections expected next month, the fifth in the crisis-hit country in six years. President Prokopis Pavlopoulos said he had chosen Vassiliki Thanou, the head of Greece's Supreme Court and the first woman to assume the post... Read more

Western investors have thrown Ukraine a financial lifeline by agreeing to write off debt worth $3.6 billion and delay bond repayments for four years. Prime Minister Arseniy Yatsenyuk announced the deal during a government meeting broadcast live on national television... Read more

Russian Railways hits buffers as Kremlin refuses to fund $1.8 billion project... Read more

‘It's all guesswork’: Russian entrepreneurs on the falling ruble. As the Russian ruble hit another record low on Aug. 24, the heads of several major Russian companies spoke about what the devaluation means for their activities... Read more

Chinese investors help Russia develop sanctions-hit gas plant... Read more

China rate cuts welcome, but not enough, say experts... Read more

Surprised by global impact of yuan move, China looks to calm markets... Read more

Two of China's biggest energy companies, Sinopec and CNOOC, saw their first half net profits slump as low international oil prices and a weak global economy hit the bottom line, they said. Refiner Sinopec's net profit for the first six months slumped 22.3 percent to 24.43 billion yuan ($3.81 billion), it said late Wednesday in a statement to the Hong Kong stock exchange, where it is listed... Read more

The "Ironman" brand has a new owner. Chinese billionaire Wang Jianlin has agreed to pay $650 million for World Triathlon Corporation, in the latest expansion of his growing sports empire. World Triathlon organizes Ironman events and controls the brand name... Read more

Ferrari Returns to India After Brief Pit Stop... Read more

Opinion - Ann Skeet: Bezos is clear about what Amazon’s culture is... Read more

Opinion - William Pesek: Why Asia should call truce on the currency war... Read more

Opinion - Kathleen Burke: Amid the stock market volatility, turn to the stability of the marijuana market. With the stock market volatility of the last week, it’s difficult to know which industries will weather the storm. However, there’s one potential way to stay in the green.... Read more

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