ASB Securities Morning Brief for Tuesday, 03 March 2015
Tuesday, 03 March 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose to a fresh record, paced by MightyRiverPower, Meridian Energy and Genesis Energy as investors mulled possible lower interest rates across the Tasman. Diligent Board Member Services fell after reporting its annual profit. The NZX 50 Index rose 14.201 points, or 0.2 percent, to 5892.673. Within the benchmark, 21 stocks rose, 19 fell and 10 were unchanged. Turnover was $159 million... Read more

The New Zealand dollar fell after a rate cut by the People's Bank of China and weaker than expected Australian manufacturing figures raised concerns about the economies of New Zealand's two biggest trading partners. The kiwi declined to 75.23 US cents at 5pm in Wellington from 75.65 cents at 8am and 75.60 cents on Friday in New York. The trade-weighted index decreased to 78.37 from 78.59 last week... Read more

New Zealand's export dollar does not stretch as far as it did, after the terms of trade fell 1.9 per cent in the last three months of 2014.... Read more

The average asking price of homes for sale in New Zealand has pushed past half a million dollars for the first time, says. Sellers' expectations during February averaged $511,421, the monthly data shows... Read more

Low interest rates are likely to drive more retired people to invest in rental properties, the Property Institute suggests. Chief executive Ashley Church said while low interest rates were good news for homeowners, they had a negative impact on people who relied on interest for income... Read more

Greater flexibility for investors is contained in a raft of new offerings from non-bank lender RESIMAC Home Loans.... Read more

The entry of the Bank of China into the New Zealand Bankers' Association adds diversity to the sector, chief executive Kirk Hope says... Read more

The cost of implementing a new child support system has rocketed to $163 million - a blowout that dwarfs the bill for fixing the controversial Novopay school payroll system... Read more

Magnetic milk – the lure of dairy investment down under. In 2014 there was a flurry of inbound investment activity by Asian dairy companies, mostly from China, into the New Zealand and Australian dairy sectors. However Rabobank warns that ongoing growth in import requirements by Chinese and wider Asian dairy companies shouldn’t be taken for granted.... Read more

The New Zealand area planted in wine grapes has soared by 100 per cent in the last 12 years, according to Statistics New Zealand... Read more

Heinz Wattie's has not totally canned the New Zealand asparagus industry, a Hawke's Bay grower says. Asparagus Council representative Lindsay Kay said some growers had been financed by Heinz Wattie's into the industry several years ago... Read more

A major banana importer says a world shortage has reduced its supply at a time of stronger demand from New Zealanders who have switched from expensive summer fruits... Read more

Summer might be winding down but the big dry affecting Waikato is marching on. For the third summer in a row, excessively dry weather has put the pressure on Waikato farmers. Most are digging into their supplementary feed reserves to maintain cow condition, keep them in milk and allow parched pastures a chance to recover... Read more

The Tasman District Council has given its consent for the proposed Waimea Community Dam, says Irrigation NZ... Read more

KiwiRail, the unprofitable government-owned rail operator, reported a 6 percent drop in first-half operating earnings on reduced freight volumes of coal, logs and dairy, and said it would still meet guidance for annual earnings to gain by almost a quarter... Read more

Government resisting pressure to inject more cash into Solid Energy... Read more

Rocket Lab has attracted new financial backing from one of the United States' oldest venture capital firms and aerospace giant Lockheed Martin to put it on course to launch its latest vehicle into orbit this year... Read more

Diligent Board Member Services, the governance software developer, expects sales growth of up to 19 per cent in 2015 as it attracts customers to its BoardBooks service, and plans to launch a new product this year... Read more

Vista Group International, the cinema software and analytics company, is reassessing whether it has to increase the value of its 2014 goodwill, which would boost last week's reported annual profit of $3.99 million... Read more

Asteron Life has launched a new trauma benefit that could allow customers to claim for the same or related condition up to three times as their condition worsens... Read more

TVNZ has reported an after tax net profit of $19.8 million for the six months to December 31.... Read more

April 30 deadline for revised convention centre design... Read more

Power users in Wellington should see some small relief in their bills from April 1, but for some there will be a sting in the tail with higher daily fixed-line charges. Lines company Wellington Electricity is cutting its charges by about 10 per cent for businesses and households, a slightly smaller reduction than first indicated late last year by monopoly watchdog the Commerce Commission... Read more

Gumtree, one of the UK's largest websites, has decided to shut down its New Zealand operations next month.... Read more

Phillips Fox merges with DLA Piper to become local unit of Anglo-American law firm... Read more

Review prompts changes. External disputes resolution provider FSCL is to make some changes to its processes after an independent review.... Read more

PSA warning over MPs' pay increases... Read more

Former Blue Chip boss Mark Bryers returns to the witness box today, having faced a day of questions on his management of the failed property investment company and related party lending, as the High Court continues its look at his application for discharge from bankruptcy... Read more

Blue Chip's Bryers won't return to New Zealand, court hears... Read more

Opinion/Analysis - Roger J Kerr: Roger J Kerr asks how sustainable the current totally “flat” NZ interest rate yield curve is... Read more

Opinion - Liam Dann: Fresh Chinese rate cut highlights slowdown risk... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket has closed at a fresh seven-year high as a rate cut in China over the weekend boosted sentiment ahead of tomorrow’s Reserve Bank board meeting. At the 4.15pm (AEDT) official market close, the benchmark S&P/ASX200 index was up 30.1 points, or 0.51 per cent, at 5958.9, while the broader All Ordinaries index rose 27.8 points, or 0.47 per cent, to 5926.3.... Read more

The Australian dollar has sunk back below US78 cents as investors await tomorrow’s Reserve Bank interest rate decision. At 4pm (AEDT), the local currency was trading at US77.68 cents, down from US78.03 cents on Friday... Read more

Experts: Australia set for ‘unprecedented’ interest rate cuts in 2015... Read more

Australia has a decade to sort out its federal budget problems or lifestyles will suffer. That's the warning from the Business Council of Australia in its 2015-16 budget submission released on Tuesday... Read more

Goldman Sachs predicts March and May cuts from RBA... Read more

A growing band of top economists expect the Reserve Bank to take a razor to interest rates on Tuesday, amid further signs the economy is deteriorating... Read more

Company profits fell almost six per cent in 2014, a sign the economy is struggling and more interest rate cuts are likely. Gross operating profits fell 0.2 per cent in the three months to December, much worse than the rise of 0.8 per cent the market was expecting... Read more

Capital city house prices have continued rising, with the Sydney market still outperforming the rest of the country... Read more

Perth house prices fell 2.3pc in Feb... Read more

Australia's big banks are being accused of offering special inducements to businesses to switch the default superannuation fund used for the retirement nest eggs of their employees. Research conducted for Industry Super Australia said some banks were offering employers discounts on business banking, insurance products, tickets to sporting events and even iPads to win management of their company's 9.5 per cent employer super contribution... Read more

Sirius Resources NL signs Nova offtake deal with BHP Billiton... Read more

Vango Mining is continuing negotiations regarding a $5 million convertible note facility with Singaporean investment entity Alpha Crown Pte Ltd... Read more

Mining services group Orica will buy back more than $400 million of its own shares after completing the sale of its chemicals division... Read more

Black Range Minerals has been granted a trading halt by the ASX with its shares placed in pre-open... Read more

Marathon Resources has been granted a trading halt by the ASX pending material details concerning the acquisition of the Leigh Creek Energy Project (LCEP) which has been the subject of prior advice to the market... Read more

An Australian Workers' Union resolution demanding a parliamentary inquiry into Rio Tinto and BHP's iron ore practices is baseless grandstanding, the Minerals Council of Australia (MCA) says. The Australian Workers' Union's national meeting on Monday passed a resolution condemning the companies for what it claimed was "unconscionable market conduct"... Read more

Myer has announced the departure of long-time chief executive Bernie Brookes as part of a broader management shake-up. The department store chain advised the ASX this morning that Mr Brookes was stepping down, effective immediately, after being at the helm for more than eight years... Read more

Myer shares have tumbled after the dual resignations of its chief executive and chief financial officertriggered fears the department store giant will deliver a horror half year earnings result... Read more

Diploma Group has posted a $1.2 million first-half loss in what it described as a difficult period for the company. The loss, down from a profit of $1.9 million in the previous corresponding period, came on revenue of $47.1 million, down 58 per cent on the previous corresponding period... Read more

Infrastructure consultancy Cardno has raised the alarm that one of its subsidiaries could be entangled in a corruption scandal involving Ecuador-government contracts... Read more

Optus Business has reinvested in marketing after three successive years of company-wide job cuts, establishing an offshore centre for “power users” of software that will soon be rolled out to other ­divisions... Read more

One of Australia's best known cheese brands, COON, is about to change from Japanese to Canadian ownership. Warrnambool Cheese and Butter Factory, which is majority-owned by Canadian dairy giant Saputo Inc, is set to acquire the everyday cheese business of Lion Dairy and Drinks for $137.5 million... Read more

Murray Goulburn, Australia's biggest dairy co-operative, has confirmed a full-year forecast farmgate price of A$6 per kg of milk solids.... Read more

Troubled education provider Vocation insists it can remain a viable business and lift earnings over the next few months after suffering a $273 million half year loss. Vocation's bottom line was weighed down by $241 million in impairments and writedowns on its Victorian businesses Aspin and BAWM. The shares closed down half a cent at 8.5 cents.... Read more

Bain Capital has appointed Justin Milne, a director at NBN Co, as the Chairman of MYOB, the accountancy software firm set to debut on the stock exchange later his year with a market capitalisation of $2-$3 billion... Read more

IBM seeks to distance itself from Aussie tax debate... Read more

Locked into a second-rate NBN... Read more

As Australia's nascent online video streaming sector finally comes to life, the company that pioneered the local industry has suffered a massive first half loss. Quickflix posted an $8.6 million loss for the six months to December 31, more than double the size of its loss a year ago and almost two and a half times the company's entire current market value... Read more

Former ABC Learning Centres chief financial officer James Black pleads guilty to 1 charge after ASIC probe... Read more

Opinion/Analysis - Tony Kwok: Tough Decision for the RBA... Read more

Opinion - Keith Orchison: The deafening silence on energy efficiency... Read more

International Headlines

U.S. Market Report: U.S. stocks advanced on Monday to push the Nasdaq above the 5,000 mark for the first time in fifteen years, as a round of mixed data pointed to a slowly accelerating economy. The Nasdaq hit a high of 5,000.33 before retreating, the first time above that level since March 27, 2000, at the height of the bubble... Read more

North/South Americas Market Report: North and South American markets are mixed. The S&P 500 is higher by 0.25%, while the Bovespa is leading the IPC lower. They are down 1.22% and 0.72% respectively.... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The DAX gained 0.08%, while the CAC 40 led the FTSE 100 lower. They fell 0.69% and 0.09% respectively.... Read more

Asian Market Report: Asian markets finished higher today with shares in China leading the region. The Shanghai Composite is up 0.78% while Hong Kong's Hang Seng is up 0.26% and Japan's Nikkei 225 is up 0.15%.... Read more

Brent crude oil fell more than 2 percent to around $61 a barrel on Monday after Iran said a deal on its nuclear program could be agreed this week if the West lifts sanctions, which could boost the country's oil exports... Read more

Oil prices stabilised in Asia Monday following sharp gains in the previous session as dealers predicted the end of volatile trading and the beaten-down commodity bottoming out, analysts said. US benchmark West Texas Intermediate (WTI) for April delivery fell 36 cents to $49.40 while Brent crude eased 41 cents to $62.17 in afternoon trade. WTI advanced $1.59 while Brent gained a hefty $2.53 on Friday... Read more

Gold has started the week firmer - with the yellow metal in the green by 0.3% to US$1218 an ounce in the spot market... Read more

Jobs report key for investors in week ahead. Investor attention turns to the latest jobs report this week along with a slew of other economic data.... Read more

U.S. manufacturing growth slows to 13-month low: ISM... Read more

US consumer spending and incomes rose in January as a decline in consumer prices picked up speed... Read more

U.S. construction spending falls in January... Read more

The Nasdaq that peaked and plunged 15 years ago was a very different stock index... Read more

Bill Gates is named world's richest person again... Read more

Hewlett-Packard Co said it would buy Wi-Fi network gear maker Aruba Networks Inc for about $2.7 billion, the biggest deal for the world's No. 2 PC maker since its botched acquisition of Britain's Autonomy Plc in 2011... Read more

NXP, Freescale agree to merge. NXP Semiconductors NV and Freescale Semiconductor Ltd. have agreed to merge in a deal that values Freescale at $11.8 billion and which would create a combined company with a market value of more than $30 billion... Read more

Chip maker NXP Semiconductors NV has agreed to buy smaller peer Freescale Semiconductor Ltd and merge operations in a deal valuing the combined company at over $40 billion. The deal, announced by the pair late on Sunday and first reported by Reuters, will make the business the industry leader within the auto and industrial semiconductor markets... Read more

CEO’s Job at Stake as Citigroup Awaits Fed Stress Tests... Read more

The U.S. Securities and Exchange Commission may strip Vanguard Group, BlackRock Inc and State Street Corp, the oldest and biggest providers of exchange-traded funds, of an advantage they hold over newer rivals in how they assemble the shares of their funds, said sources familiar with the SEC... Read more

Lumber Liquidators stock pummeled after '60 Minutes' probe. A report on CBS' "60 Minutes" has knocked the floor out from under Lumber Liquidators.... Read more

Apple, Google workers head to court on $415 million poaching settlement. Workers accusing Apple, Google and two other Silicon Valley companies of conspiring to hold down salaries will try on Monday to win approval of a $415 million settlement from a U.S. judge who rejected an earlier deal as too low... Read more

Actavis Plc started marketing bonds in a nine-part offering to finance its purchase of Botox-maker Allergan Inc., according to a person with knowledge of the transaction... Read more

Warehouse club retailer Costco Wholesale Corp said on Monday it had tied up with Citigroup Inc and Visa Inc to issue co-branded credit cards in the United States and Puerto Rico. Citigroup will exclusively issue the co-brand cards and Visa would provide the payment network, replacing American Express Co, from April 1, 2016, Costco said. Visa shares rose 2 percent to a record high of $277.00 in early trading, while Citi shares rose 1.4 percent to $53.15.... Read more

Goldman Sachs Group Inc. is reducing the size of its investment-banking team in Singapore by about 30 percent compared with the start of the year, people with knowledge of the matter said... Read more

Closely watched bond investor Bill Gross criticized ultra-low interest rates on Monday, saying they could harm global growth instead of boosting it in the way that many central banks intend... Read more

Euro zone February prices fall less than expected, unemployment down... Read more

ECB uncomfortable with leading role in Greek funding drama... Read more

Lib Dems to target UK banks for an extra £1bn The Liberal Democrat party plans to hit the UK banking industry with an additional £1bn tax bill to bring down the country's deficit... Read more

Seven-figure salaries damage UK firms' reputation, poll suggests. Public anger over the size of top executives' salaries is damaging the reputation of UK firms, according to a survey of business leaders... Read more

An alarming decline in food production at British farms will leave shoppers at the mercy of prices and quality elsewhere in the world, warns a UK farming report. The National Farmers Union has forecast a sharp rise in the amount of imported food as British farms convert into renewable energy sites and tourist attractions to stay afloat... Read more

Manufacturing output in Ireland has risen to its highest level in more than 15 years, according to the Markit Purchasing Managers' Index (PMI). Accelerated growth in both new orders and production pushed Ireland's PMI to 57.5 in February. A figure above 50 suggests expansion... Read more

Rebekah Brooks, the former chief executive of News International, is to be re-hired by Rupert Murdoch. She is expected to begin a new role at News Corp-owned media agency Storyful that will focus on new avenues for digital and social media... Read more

German energy company RWE has closed the sale of 12 North Sea oil and gas fields to a Russian oligarch. The deal went through despite objections from the UK government... Read more

Russia will have 11%-12% inflation in 2015 and the inflation rate will slow sharply in 2016 and real incomes will begin to rise, Economic Development Minister Alexei Ulyukayev said during a lecture at Bocconi University in Milan... Read more

Activity in China's factory sector edged up to a seven-month high in February but export orders shrank and deflationary pressures persisted, a private business survey showed, adding to the view that yet more interest rate cuts will be needed... Read more

Shares in China remained higher on Monday after the mainland's central bank unexpectedly cut interest rates at the weekend for the second time since November... Read more

Indonesia's inflation slowed further in February, official data showed Monday, owing to the lower cost of fuel and some staple foods in Southeast Asia's top economy. Prices rose 6.29 percent year-on-year last month, slowing from a 6.96 percent rise in January, according to data from the statistics agency... Read more

India Releases New Monetary Policy Framework India’s central bank will aim to lower inflation to 4%, with a band of 2% on either side, by March 2017... Read more

India's factory output in February grew at its slowest pace in five months as business demands remained dim, a survey showed Monday, suggesting strong government steps were needed to reignite growth... Read more

Indian PM Narendra Modi's government has unveiled a business-friendly budget aimed at attracting greater investment for the economy.... Read more

Opinion - Sadanand Dhume: India’s Missed Opportunity... Read more

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