ASB Securities Morning Brief for Tuesday, 07 July 2015
Tuesday, 07 July 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares fell in a region-wide sell off as uncertainty over Greece's financial stability overshadowed equity markets. Dual-listed stocks such as Kathmandu Holdings, Westpac Banking Corp and Australia and New Zealand Banking Group dropped, while Fletcher Building tumbled to the lowest level in more than two years. The S&P/NZX 50 Index declined 64.28 points, or 1.1 percent, to 5776.62. Within the index, 36 stocks fell, five rose and nine were unchanged. Turnover was $119 million... Read more

The New Zealand dollar traded near a five-year low ahead of a meeting between German Chancellor Angela Merkel and French President Francois Hollande today where they will discuss a possible response to Greece's rejection of austerity measures tied to bailout money. The kiwi traded at 66.70 US cents at 5pm in Wellington, having earlier reached a five-year low of 66.40 cents, from 66.93 cents in New York last Friday. The trade-weighted index fell to 70.40 from 70.61 on Friday.... Read more

HiFX's Dan Bell says NZ dollar may continue falling, potentially to around US60c, given global, and domestic issues driving it... Read more

New Zealand's economy is still fairly robust and doesn't need increased government spending to give it a kickstart, Prime Minister John Key says. The government is ready to provide support to the economy if it starts showing signs of slowing, but Key doesn't think it's there yet, he said at his weekly post-Cabinet press conference in Wellington... Read more

Treasury confident NZ can ride through global turbulence. Treasury Secretary says NZ well placed to cope with turbulence from Greece and China; Christchurch rebuild still strong; Tourism growing fast; Banks supporting dairy farmers; Focus in Auckland on housing supply... Read more

Westpac predicts four OCR cuts this year... Read more

An Australian politician's claims that gay marriage could affect Asian trade are being rubbished this side of the ditch. New Zealand's trade with China - our biggest trading partner - has actually increased by about $3 billion annually since 2012, the last year before gay marriage was legalised in 2013... Read more

Gap between Auckland prices & rents not sustainable. Capital gains are driving investment in Auckland’s housing market, but how long can the gap between prices and rents last?... Read more

'Hard to be bullish' on dairy prices. NZX dairy futures pricing continues to point to more weakness in the whole milk powder market, following on from the sharp decline at last week's GlobalDairyTrade auction. Last week, the GDT price index dropped by 5.9 per cent while whole milk powder prices - responsible for about 75 per cent of Fonterra's farmgate milk price - fell by 10.8 per cent to US$2054 ($3074) a tonne... Read more

Silver Fern rebuts 'misleading' claims. Silver Fern Farms says the group agitating for change at New Zealand's biggest meat processor has misled shareholders by saying its board had not investigated the potential $100 million in gains that would arise if the Dunedin-based co-op merged with its southern neighbour Alliance Group... Read more

Craft beer could be the next boom for New Zealand. Marlborough could be at the heart of a boom in the craft beer industry as a generational shift in drinking habits sees demand moving away from mainstream beer, researchers say... Read more

NZ Merino secures $3M contract with Godfrey Hirst for luxury wool carpet... Read more

A self-appointed environmental watchdog is buying advertisements warning people in central and South Taranaki against letting oil companies on their land to conduct seismic surveys. Both Tag Oil and Shell Todd Oil Services (Stos) are planning to carry out such exploration work this summer - Tag at its Cheal wellsite and Stos at Kapuni... Read more

The owner of the Sams Creek Gold Project, which sits atop what could be New Zealand's biggest undeveloped gold deposit, has slashed the value of the resource and taken impairments of about $7.7 million after stopping work on the site last year pending a pickup in prices. Sams Creek Gold, which is owned by ASX-listed MOD Resources, posted a loss of $7.3 million in 2014, from a year-earlier profit of $1.2 million... Read more

Oceania mulls float as it plans up to $500m expansion. Growth plans for elderly-care business include enlarging four sites in Auckland... Read more

Blenheim-based power company Marlborough Lines has bought an 80 per cent stake in Yealands Wine Group for $89 million, the companies said in a joint statement... Read more

Yealands sale transparent, say key players. Key players in the Yealands Wine Group sale to Marlborough Lines have responded to concerns raised over the deal, saying the buyout of one of the country's largest wine exporters was thoroughly researched, with due diligence undertaken independently... Read more

The FMA says it wants to see more investors seeking financial advice.... Read more

Movies v homes: Film idea stirs row over prime land. Two Auckland Council bodies are at loggerheads over whether 20ha of land at Hobsonville Pt should be used for housing or a film studio. Five consultant firms have been hired during the dispute, which arose when Ateed, the council's economic development arm, made a late pitch to turn some of the council-owned land into a film studio campus... Read more

Why Dealer Group QFEs isn't a far-fetched idea... Read more

Milford clients jump ship. A $1.5 million settlement with the FMA has not been the only blow to Milford Asset Management as a result of the investigation into alleged market manipulation.... Read more

Milford Asset Management loses wholesale clients... Read more

EQC to double payout, scrap contents insurance and use private insurers for claims... Read more

The former head of FundSource, Sam Stanley, has finished up at the NZX and will take on a new role as an adviser.... Read more

The Commerce Commission is investigating PGG Wrightson over the fees the rural services firm, which is controlled by China's Agria Corp, charged during the implementation of a national livestock tagging programme. The antitrust regulator will look at fees charged during the adoption of the National Animal Identification and Trading Act 2012, commonly known as NAIT, the Christchurch-based agricultural company said in a statement... Read more

Hanover settlement 'some comfort' for investors in better regulated market, PM Key says... Read more

Eric Watson only one of Hanover directors and promoters not to contribute to $18M FMA settlement... Read more

FMA: Settlement gives investors more. An $18 million settlement negotiated with the former directors of Hanover Finance, Hanover Capital and United Finance is a better outcome than would have been achieved through court, the FMA says... Read more

Hanover directors welcome settlement that gives investors $18m... Read more

The New Zealand Institute of Chartered Accountants engaged in "professional denigration" that was "quite extraordinary and offensive" against rival accounting body CPA Australia when it was at its most vulnerable in the early stages of expansion in the local market, CPA's legal counsel claimed as part of High Court defamation proceedings.... Read more

A controversial slip and slide event that originated in New Zealand could face a hefty financial penalty as it comes under scrutiny from an Australian consumer watchdog. The Queensland Office of Fair Trading (OFT) said it had received three complaints from Monster Slide customers seeking refunds for an event scheduled for May in Caloundra on the Sunshine Coast... Read more

Former Justice Minister Judith Collins described a champagne stunt by fraud watchdog Adam Feeley as an "utter disaster" that threatened to overshadow the Government at a crucial time, newly released documents show. They also reveal that Mr Feeley believed Ms Collins had overreacted when the then Serious Fraud Office boss was found to have celebrated charges against Bridgecorp with champagne taken from its offices... Read more

Debts pile up as company director can't be found. Creditors are worried an Auckland-based rebuild company appears to have abandoned Christchurch, with subcontractors and suppliers saying they are owed thousands of dollars. The company, Hanguk Business Investments One Ltd, was previously called Global Renovations Canterbury, which is part of group of companies under the Global Homes banner. Global Renovations Ltd is run by John Edward Clancy... Read more

Opinion - Hamish Fletcher: FMA’s $18m settlement for investors leaves public none the wiser, writes Hamish Fletcher... Read more

Opinion - Len Brown: Budget milestone a kickstart for Auckland transport... Read more

Opinion - Gary McLaren: Can the NBN power Australia's 'network economy'?... Read more

Australian Headlines

Australian Market Report: Markets hit hard by Greek fallout. At the 4.15pm (AEST) official market close, the benchmark S & P/ASX200 index retreated 63.3 points, or 1.14 per cent, to 5475, while the broader All Ordinaries index lost 64.7 points, or 1.17 per cent, to 5463.3... Read more

The Australian dollar hit a six year low as Greece's bailout rejection sent shockwaves through financial markets. The surprise referendum result sparked caution among traders, sending the Australian dollar to a low of 74.63 US cents early on Monday, its lowest level since May 2009. The currency recovered later in the day and at 1700 AEST on Monday was trading at 75.11 US cents, still sharply lower than the 75.84 US cents it was buying on Friday... Read more

The Reserve Bank is not expected to cut rates at its July meeting, and is unlikely to cut again this year. All 14 economists surveyed by AAP expect the RBA to keep the cash rate unchanged on Tuesday, and only two expect another cut before the end of the year... Read more

A leading private sector gauge shows inflation remaining below the Reserve Bank's target range, leaving scope for further rate cuts if needed. The TD Securities - Melbourne Institute Monthly Inflation Gauge for June showed a monthly price increase of just 0.1 per cent for an annual rise of 1.5 per cent... Read more

Hiring expectations hit one-year low. A survey by Dun & Bradstreet indicates that business hiring expectations are at their lowest ebb for over a year, while near-term price expectations have declined as concerns about market conditions weigh on confidence... Read more

Australian unemployment is believed to have bumped higher last month thanks to a slowdown in the creation of new jobs. Official figures to be released on Thursday are likely to show the jobless rate rose to 6.1 per cent, according to an AAP survey of 11 economists... Read more

Beef producer Stanbroke is planning a $200 million cotton farm in Queensland’s drought-stricken north. The Stanbroke Three Rivers irrigation project lies just to the west of the $2 billion IFED project and both plan to take advantage of the massive supply of water from Gulf river systems... Read more

Copper prices have tumbled to a five-month low, weighed down by sliding oil prices and mounting losses on Chinese stock markets. Copper for July delivery, the most actively traded contract, was recently down 3.6 per cent to $US2.5390 a pound on the Comex division of the New York Mercantile Exchange, its lowest level since February... Read more

A stunning bearish run in the price of iron ore threatens to drag the commodity below $US50 a tonne for the first time since early April. At the end of the latest session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US52.00 a tonne, down 3.9 per cent from its prior close of $US54.10 a tonne... Read more

King River Copper shares are trading ex-bonus issue of options of 2 free options for every 5 shares held. The issue was provided to all King River shareholders... Read more

AGL Energy will make more than $600 million worth of writedowns on its gas production ventures and sell underperforming businesses as it battles uncertainty surrounding oil and gas prices. AGL has reduced the value of its gas business by $603 million, $275 million of which relates to the Gloucester project in the NSW Hunter region... Read more

Entek Energy is targeting oil production with the spud of the first of three horizontal wells at the Battle Mountain AMI in the U.S. The company is fully carried for its 20% interest by GRMR, a private company associated with East Resources... Read more

Buru Energy shares fell despite the company being granted production licences for its Ungani oil field in the Kimberley... Read more

Shares in Rumble Resources tumbled after a drilling program at its Zanthus project in the Fraser Range turned up nothing of interest. Rumble shares were off 2.3 cents, or 44.23 per cent, to 2.9 cents at the close.... Read more

Global Health Limited has been granted an ASX trading halt in relation to an acquisition... Read more

Healthcare provider Pulse Health has lobbed a $158 million takeover offer for Vision Eye Institute. Pulse has put forward an offer that would see investors recieve 1.6 Pulse shares for every Vision share they own. Pulse shares last traded at 56 cents, while Vision shares last traded at 65.5 cents.... Read more

Glennon Small Companies seeks up to $50M under IPO... Read more

Automotive Holdings Group has bought Ian Goldie’s three Perth Mercedes-Benz dealerships for $58 million. AHG shares were off nine cents, or 2.24 per cent, to $3.93 at the close.... Read more

Netccentric raises $12.5 million to fund growth... Read more

AMWU angry over Nissan decision to close parts warehouses across Australia, 58 jobs lost. Nissan Australia has decided to close its parts warehouses across the country in October, resulting in the loss of 58 jobs. The majority of the jobs will be lost in Melbourne with the closure of the Dandenong facility... Read more

Shares in Nearmap were lower despite the geospatial map technology company upgrading its full-year profit guidance. Nearmap said it expected to book revenue of $23 million in the 2015 full-year, representing a 29 per cent jump in last year’s figure of $17.8 million. Shares in Nearmap were off four cents, or 6.3 per cent, to 59.5 cents at the close.... Read more

Discounting pushes premiums for new home and contents insurance lower. Insurance premiums for people shopping for new home and contents policies have continued to fall, according to sector analysts at Morgan Stanley. The analysts also said that prices for new car insurance remain 6 per cent off highs reached in 2013, but are starting to rise... Read more

APRA updates cloud guidance for banks... Read more

The owners of a small, family-owned sports store in Adelaide are fighting a global Japanese shoe company over its decision to stop supplying stock to their store. Don and Kay Shipway, owners of the Sports Locker store in Prospect, said the company's decision to stop supplying their store with ASICS shoes, which make up 90 per cent of their turnover, will put them out of business... Read more

Gina Rinehart on Australian Story: Did ABC become PR machine for our richest citizen? Her kids slammed it as a “PR exercise”, but a rare, interview with Australia’s richest citizen, Gina Rinehart, posed an interesting question: Should we take more pride in her achievements?... Read more

Lorna Jane seeks to clarify misconceptions over advertisement seeking size small receptionist... Read more

Opinion/Analysis - Chris Tedder: RBA preview: no change as concerns about China and Greece sink AUD... Read more

International Headlines

U.S. Market Report: U.S. stocks extended declines on Monday as selling of risky assets such as equities continued after Greece on Sunday rejected its international lenders’ bailout terms and moved closer to a potential exit from eurozone. The S&P 500 was down 14 points, or 0.7% to 2,062. The Dow Jones Industrial Average dropped 104 points, or 0.6%, to 17,633. The Nasdaq Composite fell 37 points, or 0.8% at 4,971.... Read more

North/South Americas Market Report: North and South American markets are broadly lower today with shares in Brazil off the most. The Bovespa is down 1.16% while Mexico's IPC is off 1.08% and U.S.'s S&P 500 is lower by 0.72%... Read more

European Market Report: European markets finished broadly lower today with shares in France leading the region. The CAC 40 is down 2.01% while Germany's DAX is off 1.52% and London's FTSE 100 is lower by 0.76%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 2.41%, while the Hang Seng led the Nikkei 225 lower. They fell 3.18% and 2.08% respectively... Read more

Oil tumbles in Asia as Greek vote shakes world markets. US benchmark West Texas Intermediate for delivery in August plummeted $2.10 to $54.83 a barrel and Brent crude tumbled 75 cents to $59.57 in afternoon Asian trade.... Read more

Iran is nearing an historic nuclear deal with the West -- and that's scaring the oil markets. Oil prices tumbled more than 5% and broke below $54 a barrel on Monday, the deepest plunge for crude oil since early April... Read more

Big question: Will the Greek crisis delay a Fed rate hike?... Read more Inc. plans to leave Black Friday in the dust. With an announcement on Monday that read “Step Aside Black Friday — Meet Prime Day,” Amazon revealed that on July 15 it would be launching a huge sale that would be bigger than Black Friday, the day after Thanksgiving in which many retailers roll out massive sales... Read more

Eric Holder Returns to Covington & Burling... Read more

Weight Watchers International is reportedly a takeover target for an unnamed activist hedge fund. Few details were available, but media reports were enough to send shares in Weight Watchers up around 16%... Read more

Burt of Burt's Bees dies at 80. Burt's Bees was sold for $1 billion to Clorox in 2007. The company remains one of the most recognizable natural care brands in the U.S... Read more

ECB Tightens Collateral Terms for Greek Bank Liquidity Aid... Read more

Greece debt crisis: Creditors press for new proposals... Read more

Greece Extends Bank Holiday, Capital Controls Through Wednesday... Read more

UK car sales hit record high in June... Read more

Authorities of Harbin (China) have confirmed their wish to make this city a center of cooperation with Russia and to create a free-trade zone, Zhang Chunjiao, head of the Heilongjiang province Applied Economy Association, has told Interfax... Read more

Why Gazprom became so flexible. Russia's natural gas giant is planning to put three billion cubic meters of gas up for auction - yielding to pressure from European customers, experts say. It may also scrap plans to stop Ukrainian gas transits, reducing supply risks linked to the construction of a new Turkish route... Read more

Greek crisis is nothing compared to China... Read more

Uber to Invest $50 Million in Hyderabad Despite Roadblocks in India... Read more

Opinion - Craig Stephen: Why Beijing cannot let its bull market die... Read more

Opinion - David Marsh: After Greece’s ‘no’ vote, let the punishment begin... Read more

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