ASB Securities Morning Brief for Saturday, 22 October 2016
Saturday, 22 October 2016

New Zealand Headlines

New Zealand Market Report: New Zealand shares were mixed, with the index dragged lower by SkyCity Entertainment Group while Orion Health Group and Kathmandu Holdings rallied. The S&P/NZX 50 Index dropped 15.38 points, or 0.2 percent, to 6,958.4. Within the index, 29 stocks rose, 16 fell and five were unchanged. Turnover was $121.6 million... Read more

The New Zealand dollar fell against a broadly stronger US dollar after the European Central Bank said it was in no hurry to end quantitative easing measures, although the local currency is still on track for a 1.2 percent weekly gain. The kiwi fell to 71.72 US cents as at 5:00pm in Wellington from 72.40 cents late yesterday. The trade-weighted index slipped to 77.20 from 77.58... Read more

Migrant flow hits new highs – for now. Pressure on housing demand is set to continue as the latest Statistics New Zealand data shows migration has jumped back up to record highs. The annual net gain of migrants arriving in New Zealand hit yet another new record of 70,000 in the September 2016 year, according to the Statistics New Zealand data... Read more

INZBC to join PM delegation to India... Read more

The government's latest attempt to reform the Resource Management Act continues to run into trouble, with the chairman of Parliament's local government and environment committee conceding today that the Resource Legislation Amendment Bill will miss its third reporting deadline of November 7... Read more

Westpac tightens; ANZ loosens lending criteria. Westpac has abruptly stopped low-equity lending through mortgage advisers, while ANZ has loosened up its criteria around construction loans... Read more

Rent flatline continues. Median asking rents around the country remained largely unchanged in September, although the capital city breaks the mould, new rental data shows... Read more

Tenancy changes 'should not worry good landlords'. Landlords who rent out substandard houses can now expect to get a knock on the door from the Ministry of Business, Innovation and Employment (MBIE) – and may even have rent withheld from them until repairs are complete... Read more

Our comprehensive review of KiwiSaver Growth funds to September 30, 2016 identifies the top performers... Read more

FSC wants to work with advisers. The Financial Services Council has a clear strategy to connect with advisers, its chairman says.... Read more

Work may commence later this year on bringing back to life roboadvice product last offered two decades ago.... Read more

The government is suggesting Fonterra Cooperative Group will no longer have to sell raw milk to large independent processors from the 2019 season onwards. Primary Industries Minister Nathan Guy announced the proposed changes to the Dairy Industry Restructuring Act today, after a discussion paper was triggered last year when independent processors in the South Island passed the threshold needed to review the law... Read more

Two longtime Fonterra Cooperative Group farmer directors Malcolm Bailey and Ian Farrelly will retire from the board in December, the cooperative says. Bailey was elected to the board in 2004, having previously been the president of Federated Farmers. He was chair of the board’s risk committee until May this year, and is a member of the cooperative relations committee, as well as leading the initial work on the cooperative's recent governance and representation review, Fonterra said... Read more

New Zealand and Australia’s largest kiwifruit grower today announced a major name change and rebrand to reflect its evolution into a leading premium produce company. Te Puke-headquartered Seeka Kiwifruit Industries Limited has been rebranded “Seeka”, with the new company name Seeka Limited, effective 28 October.... Read more

Kiwifruit marketer Zespri has reiterated its forecast profit range for the 2017 financial year of between $66 million to $71 million despite an expected decline in returns from gold varieties. That figure includes licence revenue of $50.2 million after tax from this year's release of 400 hectares of the new gold variety, Gold3... Read more

Manuka honey and health products company Comvita has placed some 2 million ordinary shares with China Resources Ng Fung, taking the Shenzhen-based Chinese food giant's stake from less than 5 percent to around 9 percent.... Read more

Namibian green light for marine phosphate mining. Chatham Rock Phosphate chief executive Chris Castle today welcomed as “hugely significant” the decision by Namibia’s Ministry of Environment and Tourism to issue an environmental clearance to extract phosphate off the Namibian coast.... Read more

Pumpkin Patch says there is a material risk to the viability of the business, as it pushes out talks with its bank and warns its shares are worthless. Shares of the debt-bogged childrenswear retailer were put in a trading halt this morning while it made a material market announcement... Read more

Pumpkin Patch in trading halt - too much debt, not enough capital... Read more

Shares in SkyCity Entertainment Group dropped to a year low after the casino operator posted weaker first-quarter revenue due to lower gaming and high-roller activity in Auckland, difficult trading conditions in Darwin and the higher level of the kiwi dollar against the Aussie. Revenue slipped 1.3% to $260.7 million in the three months ended September 30 compared with the same period a year earlier, the Auckland-based company said in a statement... Read more

SkyCity Entertainment Group interim chief executive John Mortensen has warned there will be a drop in the immediate term in the business it gets from high-rollers following a Chinese government corruption crackdown which has led to detention of 18 Australian Crown casino employees. Crown officials yesterday ordered media off their premises at the annual meeting in Perth as an unhappy shareholder spoke out about what he called a lack of transparency over the arrests... Read more

Buy a share of NZME building, investors told. Investors are being offered the chance to own a slice of the NZME building in Auckland. The office and retail property on the corner of Victoria and Graham Sts in Auckland is being syndicated by Augusta Funds Management... Read more

The 2016 New Zealand Private Equity and Venture Capital Association (NZVCA) Deal of the Year Award has gone to Waterman Capital for its investment in Academic Colleges Group. The NZVCA Deal of the Year Award recognises outstanding performance in the private equity industry and was announced at the NZVCA 2016 annual conference in Queenstown today (20 October)... Read more

The Earthquake Commission paid out nearly half a billion dollars to settle claims in Canterbury in the financial year to 30 June 2016, its annual report released today shows. Figures in the report show that in the 2015/16 financial year, EQC paid out $495 million in claims for the 2010-2011 Canterbury earthquake sequence... Read more

Opinion - Shamubeel Eaqub: Immigration an emotionally charged topic. Immigration is increasingly in the headlines. Specifically: how to limit it. Immigration is a racially and emotionally charged topic. There is no easy way to have this discussion. Yet, we have to... Read more

Australian Headlines

Australian Market Report: ASX closes lower on China risks. The Australian sharemarket finished a roller coaster session in the red as US dollar strength, Chinese yuan weakness, soft US earnings and domestic apartment-glut jitters weighed on sentiment. The S&P/ASX 200 index dropped 0.5 per cent in early trade as Healthscope and SkyCity Entertainment plunged, before making a V-shaped recovery to break even.... Read more

The Australian dollar continues to slide because of the weakness shown in the latest employment data. At 1700 AEDT on Friday, the local unit was trading at 76.38 US cents, down from 76.68 cents on Thursday.... Read more

Should we be worried about AAA credit downgrade? Fears about a downgrade to Australia’s AAA credit rating have been aired this week but is it something we should be afraid of? Australia is currently on negative watch and the government is reportedly worried the midyear budget update could be the catalyst for losing its prized AAA rating, according to The Australian... Read more

Economists wrestle with tricky jobs data. In his first speech as Reserve Bank governor, Philip Lowe described the labour market picture as "mixed" and official figures two days later backed his description to the hilt. It was a tricky set of figures... Read more

Apartment glut warning: More cranes on Australian east coast than in North America... Read more

NSW electricity asset sale to lead to infrastructure boom, but what projects could get the green light?... Read more

WPG Resources Ltd has appointed the experienced Helen Wiseman as a non-executive director, effective immediately... Read more

Greenpower completes OHD trial... Read more

Deep Yellow Ltd moves towards finalising capital raising. Deep Yellow Ltd is currently finalising a capital raising, and the ASX has granted the company more time with a voluntary suspension, following a trading halt.... Read more

Former BHP iron ore boss faces murder charge over Samarco disaster. Former BHP Billiton iron ore boss Jimmy Wilson and two serving Perth-based executives of the mining giant are among 22 people charged with murder over the Samarco mine disaster in Brazil last year.... Read more

Monadelphous and Lycopodium have formed a joint venture company to target engineering, procurement and construction work in the minerals processing sector. Monadelphous shares were up four cents to $9.82 at the close while Lycopodium shares were steady at $2.68.... Read more

Corazon Mining has raised $2.1 million to fund the exploration at the Mt Gilmore project and in particular the Cobalt Ridge prospect... Read more

Equus Mining to reveal farm-in. Equus Mining Ltd has been granted a trading halt by the ASX this morning, pending a farm-in project in Chile... Read more

Nido to raise $31.9m in rights issue. Nido Petroleum has announced a $31.9 million renounceable rights issue to fund its share of drilling expenses on the Galoc-7 appraisal well off the Philippines. The 11.2-for-one offer will be priced at a discounted 6.5 cents a share and is not underwritten. Nido said its share of drilling expenses, as 55.88 per cent owner and operator of Galoc, was estimated to be $24 million.... Read more

OTOC puts name change to shareholders. Contracting and surveying firm OTOC is proposing to change its name to Veris.... Read more

Carnegie Wave Energy has secured a $3.69m debt financing agreement to support the worlds first solar, battery and wave integrated microgrid project... Read more

Healthscope punished after revenue warning. Shares in private hospital operator Healthscope have fallen sharply after the company revealed its revenue growth softened in the first quarter and could dent earnings growth. Chief executive Robert Cooke told the group's annual general meeting Healthscope experienced slower-than-expected revenue growth in the first three months of the 2016/17 financial year... Read more

ResApp Health has received its first institutional review board (IRB) approval for the SMARTCOUGH-C study.... Read more

Holista CollTech teams with North American noodle manufacturer. Holista CollTech Ltd will conduct joint research with Wing’s Food Products, a major North American noodle manufacturer, to develop the world’s first low-Glycemic Index (low-GI) noodles... Read more

WA cleaning company Airlite sells for $25m. The managers of WA’s biggest privately-owned cleaning and maintenance company, Airlite Group, will share at least $25 million after agreeing a sale of the business to the listed Millennium Services Group.... Read more

Buddy Platform Ltd has been granted a trading halt by the ASX this morning, with its shares placed in pre-open... Read more

Qantas is not immune from headwinds impacting the airline industry despite making a record underlying profit last financial year, chief executive Alan Joyce has warned shareholders. "Like most other global carriers, intense competition on international routes means we're seeing air fares below where they were 12 months ago," Mr Joyce told the company's annual general meeting on Friday... Read more

Millennium Services Group will buy Airlite Group for $25.1 million, to be funded through a $42 million consolidated debt facility package finalised with ANZ Bank... Read more

G8 Communications secures key order for wireless device. G8 Communications Ltd has received a purchase order from U.S. based energy management company Economizer Pro worth US$250,000 plus recurring monthly fees. G8 is a wireless device manufacturer operating in the Internet of Things (IoT) industry and specialises in machine to machine (M2M) connectivity... Read more

Aeeris Ltd has won the Innovation of the Year award for its Club Marine app at the 2016 Australian Insurance Awards. The awards, hosted by the RFi Group and Australian Banking and Finance (AB+F), were held on October 13 in Sydney... Read more

Meet the outback tycoons hoping to edge out Gina Rinehart in the race to buy the Kidman empire. There are now five Australian outback dynasties vying for the sprawling S Kidman and Co properties, and a conclusion to the highly political 18-month saga could be just months away. The Kidman's preferred bid, at $365 million, comes courtesy of a Australian Outback Beef (AOB), a consortium two thirds controlled by mining magnate Gina Rinehart, and a Chinese business partner, Shanghai CRED... Read more

Commonwealth Bank’s Mosaic: program builds workplace diversity.... Read more

NBN Co reveals ambition to become IoT player... Read more

Surviving redundancy: the most important job you’ll ever have. So, you’ve been made redundant? You aren’t redundant — your job is redundant. You are still a much-loved, important, powerful and precious mother, husband, ­father, wife, person... Read more

Phoenix Institute could be ordered to repay taxpayer. A training college shut down over allegations it ripped off disadvantaged students by promising free courses and computers will be pursued by the consumer watchdog. The Phoenix Institute of Australia was placed into voluntary administration in March this year after its registration and approval as an education provider were torn up.... Read more

Sloppy tax system controls threaten SA's revenue base. After 14 years and nearly $50 million in investment, South Australia’s auditor-general has warned the state’s new revenue system has left the government's Treasury vulnerable to fraud... Read more

Nkwe Platinum sues ex-director Peter Landau for $2.5m... Read more

Former 'chuggers' join class action against Appco alleging underpayment of wages.... Read more

Commentary - Adele Ferguson: Lawsuit throws spotlight on charity fundraising. The $107 billion charity sector is a sacred cow, but it is also a black box. As more and more charities fight for a share of the highly competitive philanthropic pie, many are outsourcing fund raising activities to third-party entities to try to gain an edge... Read more

Opinion - Clancy Yeates: How phasing out cash could help the economy.... Read more

International Headlines

U.S. Market Report: The S&P 500 and the Dow were little changed and the Nasdaq advanced on Friday, as a record-setting rally in Microsoft and earnings from McDonald's helped offset a fall in energy and healthcare names. General Electric also weighed on the market, as the industrial conglomerate posted results that topped expectations but cut its full-year revenue target to send shares down 0.9 percent after it touched an 8-month low of $28.33... Read more

North/South Americas Market Report: North and South American markets are mixed today. The Bovespa is up 0.51% while the IPC gains 0.24%. The S&P 500 is even... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The DAX gained 0.09%, while the FTSE 100 led the CAC 40 lower. They fell 0.09% and 0.09% respectively... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Hang Seng gained 0.30% and the Shanghai Composite rose 0.21%. The Nikkei 225 lost 0.30%... Read more

Oil futures gain 1% for the week... Read more

Why mining stocks are due for a 20% drop. Stronger dollar and weaker copper prices to trigger mining selloff, Deutsche Bank says. A rip-roaring recovery for European mining giants have seen the sector zip past other industries this year, but the striking performance is set to come to an abrupt end, according to Deutsche Bank... Read more

Scandal may speed up Wells Fargo branch closures. Wells Fargo has more than 6,000 branches across 39 states. That's roughly 1,000 branches more than any other bank in America. The vast Wells Fargo branch network hasn't buckled much in recent years, even as rivals have pulled the plug on these expensive locations due to a profound shift toward mobile banking. Since 2012, Wells Fargo's branches have shrunk by just 2%, compared with 9% for JPMorgan Chase and 15% for Bank of America, according to CLSA... Read more

Time Warner's stock soared nearly 10% Friday on reports that telecom and media giant AT&T may make a takeover bid for the company. A deal would be the latest example of convergence in the media and tech world, and it could usher in another wave of consolidation in the sector... Read more

New York governor approves new regulations on Airbnb... Read more

The boom times are officially back for Microsoft. Microsoft stock opened above $60 a share on Friday morning, setting a record high for the first time since the height of the dot com bubble in 1999. The stock soared 5% overnight following a strong earnings report, which showed remarkable 116% sales growth in Microsoft's cloud-computing business, Azure... Read more

PayPal poised to gain more marketshare, move into tech, analysts say... Read more

General Electric Co scaled back expectations for its full-year revenue and profit on Friday, overshadowing third-quarter profit that beat analyst forecasts and sending its shares lower. Weak global economies and low oil prices hit the industrial giant's sales of oil and gas infrastructure equipment especially hard. This limited GE's organic revenue growth, which excludes acquisitions, to just 1 percent in the quarter... Read more

Shares of Skechers U.S.A. Inc. tumbled 17% Friday, extending their losses for the year to 37%, after the maker of athletic footwear missed third-quarter profit and sales estimates and offered a below-consensus outlook for the fourth quarter. The company said strength overseas weighed against weak U.S. sales, where retail bankruptcies, widespread discounting and a shorter back-to-school season hurt profit. Citigroup downgraded the stock on the news, while others cut stock price targets and lowered estimates. ... Read more

Customers are lovin' it at McDonald's again -- and so are investors. The fast food giant reported revenue and profits for the third quarter that topped forecasts. Shares of McDonald's rose nearly 3% Friday on the news.... Read more

Why a Coach-Burberry tie-up might yield nothing more than cost cuts. If Coach Inc. is in talks to acquire Burberry Group PLC, the biggest benefit wouldn’t be in style or sales, but in cost-cutting, one expert says... Read more

A number of popular websites like Twitter and Netflix were down for some users on Friday in what appears to be a massive cyber attack. Dyn, which manages website domains and routes internet traffic, experienced two distributed denial of service attacks on its DNS servers. A DDoS attack is an attempt to flood a website with so much traffic that it impairs normal service... Read more

Extreme weather could be putting your favorite bottle of wine at risk. Global wine production is forecast to fall 5% in 2016, making it one of the worst years since the start of the century, according to the International Organization of Vine and Wine (OIV).... Read more

Bombardier announces another round of steep job cuts. Bombardier is eliminating 7,500 jobs, its second round of steep job cuts this year... Read more

The EU's signature free trade deal is on life support. A huge free trade deal between Europe and Canada is on the brink of collapse. Canadian negotiators walked away from last-minute talks Friday without resolving objections raised by a small EU regional government, leading the country's trade minister to openly question whether Europe is capable of reaching a deal... Read more

Ceta: EU 'not capable' of signing deal says Canadian minister... Read more

Venezuela's food prices skyrocket as people go hungry... Read more

BAT offers to buy U.S. tobacco firm Reynolds in $47 billion deal... Read more

Should he stay or should he go? Mark Carney faces big decision amid attacks. The Bank of England governor was praised for providing calm immediately after the Brexit vote – but the tide of political opinion has turned against him... Read more

Lidl's rampant growth in the UK is stalling as sales have slumped by around 5pc at the discounters' shops that have been open for more than a year, according to a fresh analysis of industry figures... Read more

UK faces £14bn shortfall in public finances, warns IFS. Collapse in corporation tax receipts and rise in borrowing costs will cut Philip Hammond’s room for manoeuvre at autumn statement, says thinktank... Read more

Online gambling firms may be breaking the law by making it very difficult for players to collect their winnings, the competition regulator has said. The Competition and Markets Authority (CMA) said gambling "shouldn't be a con" and is launching an inquiry into whether customers are treated fairly.... Read more

Pierce Brosnan demands removal of his image from India ad. Former Bond star Pierce Brosnan has condemned the "unauthorised and deceptive" use of his image to promote an Indian mouth freshener. Brosnan caused a stir in India when he appeared in an ad for Pan Bahar, a product many associate with a highly addictive form of chewing tobacco.... Read more

Millions of Indian debit cards 'compromised' in security breach. A number of major Indian banks are taking safety measures amid fears that the security of more than 3.2 million debit cards has been compromised. Some of the affected banks have been asking their customers to change security codes. They are also blocking and replacing debit cards... Read more

Opinion - Mark Decambre: The stock market is caught deep inside ‘no man’s land’. Where is this market headed? It is anyone’s guess. The best description of the docile trading lately may be Mark Newton’s characterization: no-man’s-land... Read more

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