ASB Securities Morning Brief for Saturday, 28 November 2015
Saturday, 28 November 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose as a2 Milk, which had dipped from a record high this week, resumed its rally, and companies held for their relatively high yields, such as Tower and Genesis Energy, gained on speculation the Reserve Bank will cut interest rates next month. The S&P/NZX 50 index rose 13.11 points, or 0.2 percent, to 6101. Within the index, 25 stocks rose, 16 fell and 9 were unchanged. Turnover was $157 million... Read more

The New Zealand dollar was largely unchanged heading into the week's close as the Thanksgiving holiday in the US sapped trading activity and as investors gear up for a series of central bank meetings next month. The kiwi traded at 65.72 US cents at 5pm in Wellington from 65.63 cents on Friday in New York last week. It traded at 65.67 cents at 8am, down from 65.87 cents yesterday. The trade-weighted index was at 71.48 from 71.54 yesterday, and 71.57 at last week's New York close.... Read more

Mixed response to RMA reforms. After months of anticipation, the Government has introduced legislation to overhaul the RMA into Parliament. The 180-page Resource Legislation Amendment Bill makes 40 changes across a range of relevant Acts... Read more

Falling house prices & mortgage rates ease pressure on first home buyers.... Read more

The recent softening of Auckland house prices is probably just a temporary lull, according to BNZ chief economist Tony Alexander. In his latest Weekly Overview newsletter Alexander said Auckland house prices were probably still rising, but at a slower rate than previously... Read more

Rental returns on residential investment properties have been steadily declining for more than 20 years, while capital returns have generally been much higher but also more erratic, according to research by Colliers International... Read more

Kiwi Tech Boom Changing Face of Commercial Property... Read more

Grosvenor picks up another $440 million in FUM. Grosvenor will acquire the Fidelity Super-Super Plan, Number 3 for an undisclosed sum with settlement likely to be in the first quarter next year... Read more

No plans to cull disputes schemes. External disputes resolution schemes are safe for now - the Ministry of Business, Innovation and Employment (MBIE) has indicated no desire to cull them down to a single provider... Read more

Statistics NZ figures confirm big jump in home insurance costs since 2011... Read more

Farmers may be compelled to exclude plains and lowland-dwelling dairy cattle and pigs from waterways by 2017, and beef cattle and deer by 2025. The recommendation is one of 60 from the Land and Water Forum, which presented its report to the Government on Friday... Read more

Fonterra Cooperative Group, the world’s largest dairy exporter, has said the cost of its loan support package to farmers struggling with a low dairy payout will be $390 million.... Read more

The multi million-dollar Kiwi-owned Tasmanian farms have sold for more than $300 million New Zealand dollars. Last week it was announced the New Plymouth District Council owned asset, administered under Taranaki Investment Management Limited (Timl), had been sold to a private company... Read more

Silver Fern Farms paid former CEO Keith Cooper more than $1.8M in 2015... Read more

A visiting Rabobank analyst sees a competitive future for an “unbroken” NZ dairy industry, and signals a sustained price recovery beginning mid 2016... Read more

SeaDragon, the fish oil processor which has attracted health products maker Comvita as a cornerstone shareholder, widened its first-half loss on mounting interest costs associated with the company's newly built Omega-3 factory, which starts operating in coming days. The shares rose 9.1 percent, or 0.1 cents, to 1.2 cents, having slumped 45 percent this year. ... Read more

AFT Pharmaceuticals NZX and ASX listing to fund growth... Read more

Takapuna-based drugmaker AFT Pharmaceuticals kicks off a $33.2 million initial public share offer today as the family-owned company aims for an NZX listing before Christmas. The IPO will price AFT shares at $2.80, giving the company an indicative market capitalisation of $269m... Read more

Three major Westfield shopping malls in Lower Hutt, Hamilton and Auckland are likely to be rebranded after being sold by the properties' Australian owners. On Friday afternoon Stride Property said its Diversified NZ Property Fund, which already owns several malls across New Zealand, said it had agreed to pay $445 million for the Westfield Queensgate shopping centre in Lower Hutt and the Westfield Chartwell shopping centre in Hamilton... Read more

The latest syndication by Augusta Funds Management offers investors the chance to bag a slice of Countdown's South Island distribution centre in Christchurch... Read more

Moa Group confirmed a smaller first-half loss as increased sales volumes helped widen its gross margin, and as the unprofitable craft beer brewer slashed its spending on sales and marketing. The shares last traded at 50c, and have climbed 23% this year. The stock was listed at $1.25 in late 2012.... Read more

Online booking company Expedia has rejected claims it dominates the New Zealand market and holds local companies to ransom. And while the US-based multinational pays almost no tax here, its local boss says it brings other benefits. Last year the Commerce Commission gave Expedia clearance to buy Australian rival Wotif.... Read more

Pulse Energy investors have been given mixed messages in a split recommendation on whether to accept a takeover bid for the electricity retailer, where three of the company's four independent directors won't take up the offer... Read more

Central Hawke’s Bay consumer-owned lines company, Centralines, has this week declared a $1.2 million discount for its customers, on the back of a solid result for the 2014/15 financial year... Read more

Porirua cbd gets two fibre networks and high-speed wi-fi... Read more

Eric Watson has bought out Sir Owen Glenn's half share in the Vodafone Warriors. This makes Mr Watson -- who bought a stake in the club in December 2000 -- sole owner for the first time... Read more

Long-serving Ballance Agri-Nutrients director, Oliver Saxton has signalled his intention to step down from the co-operative’s board at its annual meeting of shareholders in September 2016... Read more

Harsh TPP opponent Professor Jane Kelsey has failed in a High Court bid to make Trade Minister Tim Groser move faster in releasing the agreement’s negotiating documents. In her own press release, Ms Kelsey says the High Court at Auckland is unable to make Mr Groser provide the information faster “for now.”... Read more

Bath Street Capital, which has been building up its local trustee business, has filed a counter-claim in the High Court against Pyne Gould Corp, saying the protracted fight over what's owed in relation to Pyne Gould's sale of Perpetual Trust has slowed progress for Bath Street's stock exchange listing and generated substantial costs for the firm... Read more

Former casino magnate and vineyard owner sued for $3.5 million. Former Vegas magnate and majority owner of Nelson's Mahana Estate winery Glenn Schaeffer is caught up in a High Court stoush with two American casino executives. James Murren, chief executive and chairman of MGM Resorts International, and Daniel Lee, who was involved with another casino company based in Las Vegas, have brought a lawsuit against Schaeffer at the High Court in Nelson, suing him for $3.5 million.... Read more

Parent, widow of Pike River casualties fail to force review of decision to drop charges against Whittall... Read more

Court protection sought for late-comers to leaky homes suit. A law firm that has signed up more than 500 potential claimants for a lawsuit against building cladding maker James Hardie Industries has asked the High Court for a ruling on their status if denied the opportunity to take New Zealand’s first leaky homes class action... Read more

Grant standoff ends in courtroom battle... Read more

High Court hears allegations over redacted report in Trends R&D funding case... Read more

Opinion - Geoff Simmons: Dairy industry must learn to share its toys or get put in the naughty corner... Read more

Opinion - Brian Gaynor: Why are investors attracted to companies that report losses year after year? Why do they buy into these loss-making companies, which include the NZX-listed Orion Health, Pushpay, Wynyard and Xero? These companies have a combined sharemarket value in excess of $4 billion compared with total operating revenue of $318 million and losses of $159 million for their latest financial years... Read more

Australian Headlines

Australian Market Report: Australian shares end the week slightly lower. At the 4.15pm (AEDT) official market close, the benchmark S&P/ASX200 index was down 8.1 points, or 0.16 per cent, at 5202.6, while the broader All Ordinaries index declined 8.3 points, or 0.16 per cent, to 5251.4.... Read more

The Australian dollar is slightly lower as currency traders largely sit on the sidelines ahead of a flurry of key economic data next week. At 3.15pm (AEDT), the local unit was trading at US72.27 cents, down from US72.38 cents yesterday... Read more

The Australian bond market has lost a little ground amid profit taking after enjoying several days of gains during the week... Read more

Australia's retailers have faced their most challenging period for 50 years, says retailing mogul Solomon Lew.... Read more

Groundswell of business support for Paris climate action. As the 40,000-plus attendees to the Paris climate summit congregate on Monday at a former aircraft hangar in north-east Paris, a surprisingly large chunk of Australian big business will be cheering them on.... Read more

Changes to the tax system have made Australia more attractive to foreign film-makers, including Alien director Ridley Scott, Foreign Minister Julie Bishop has said. The next Alien movie, due to be filmed in Sydney, is one of several upcoming blockbusters to be shot in Australia... Read more

Rio Tinto has approved its massive $US1.9 billion South of Embley bauxite project on Queensland's Cape York Peninsula. The mining giant has changed the name of the mine to the Aboriginal word Amrun, with the project involving construction of a bauxite mine as well as processing and port facilities. Rio Tinto shares closed down 0.56 per cent to $46.23 in a wider market down 0.16 per cent... Read more

Rio Tinto's $2.6b expansion of bauxite operations in far north Queensland to create 1,400 permanent jobs... Read more

Brazil to sue BHP, Vale for $5 billion in damages for dam burst... Read more

Sheffield Resources has announced a $7 million capital raising to conduct a bankable feasibility study for its Thunderbird mineral sands project east of Broome. Shares in the company closed steady at 46 cents.... Read more

Sovereign Gold shares were up 50% today as confirmation of a government refund secured the company’s financial position ahead of continued innovative exploration work in Eastern Australia. Stock in the company was last trading at A$0.003... Read more

Flinders Mines chairman Bob Kennedy has told shareholders it will look to China to develop its Pilbara iron ore project after they overwhelmingly rejected Todd Corporation’s plans to buy the project. Flinders shares were off 0.1 cent, or 7.69 per cent, to 1.2 cents at the close.... Read more

Carmichael coal mine: Coordinator-general proposes extinguishing native title over key mine property... Read more

Black Rock Mining's asset divestment to strengthen balance sheet... Read more

Empire Resources attracts attention with new gold project funds... Read more

The redevelopment of the Nyrstar smelting plant at Port Pirie in South Australia has reached another milestone.... Read more

Leading flow battery company RedFlow is expecting to receive a tax refund of about A$1.8 million in either December 2015 or January 2016. This comes after the company completed and submitted its tax return for the period ending June 30, 2015... Read more

Slater & Gordon drops 90pc in five months... Read more

Stream Group has been granted a trading halt by the ASX this morning, pending details of a capital raising... Read more

Builder and developer Diploma says it has won a $52 million contract to design and build the 18-storey Riverwood apartments at Burswood... Read more

Global beauty behemoth Sephora will throw open the doors of its first Melbourne store on Saturday, unleashing a pre-Christmas beauty battle with its biggest competitors, the major department store chains. The hype over Sephora's arrival has been building steadily since it opened its first Australian outlet in Sydney last December, and launched its Australian online store earlier this month... Read more

OncoSil Medical has received a boost to its cash balance after it received a refund from the Australian Taxation Office of $1,535,444. This follows the lodgement of the 2014/15 financial year tax return... Read more

An increase in Qantas passenger numbers for October means the airline is carrying nearly two per cent more people so far this financial year.... Read more

Micro-donations platform provider Activistic is set to accelerate plans for its Veterans Call (US) and Ralli (UK) products with A$3.9 million in funding. The company secured firm commitments for the capital raising in an oversubscribed placement at $0.11 per share... Read more

The growth of food trucks, pop-up venues and food and drink festivals in the inner city has angered some brick-and-mortar bar and restaurant owners, who say it is hurting business. Mike Keiller, chairman of the Big N group of Northbridge businesses, said there were too many events happening too often in prime locations and on key trading nights for established businesses... Read more

ANZ strikes deal on pay, parental leave... Read more

Michael Hardy has informed Fleetwood Corporation shareholders he will step down as chairman as soon as a successor can be identified... Read more

Blackmores chief executive Christine Holgate named CEO of the Year... Read more

The sale of Australia's largest and oldest dairy farming outfit to a privately owned Chinese company has been welcomed by local and national players amid warnings over Australia's future food security. The Van Diemen's Land Company (VDL) has always been foreign owned and it has been revealed it will remain so, with privately owned Chinese company Moon Lake Investments (MLI) pipping competing Australian company Tasfoods Limited (TFL) at the post... Read more

Questions have been raised over the time frames for the State Government’s $3 billion GovNext ICT rollout, with industry questioning whether the State will be ready to unveil the program by its July deadline... Read more

Treasurer Mike Nahan has welcomed the passage of legislation through State Parliament to help finalise the long-running Bell Group Companies liquidation.... Read more

Opinion - Malcolm Maiden: Calls for blood are not far away for BHP's board. BHP's share price dive will flush out calls for leadership changes if it continues... Read more

Opinion - Bill Evans: Weekend Economist: No change... Read more

Opinion - Ross Gittins: GDP might be lower but it might not hurt. When is slower economic growth not such a bad thing? When it's caused by lower growth in the population. If that puzzles you, you're a victim of the economists' practice of focusing on growth in gross domestic product rather than GDP per person... Read more

International Headlines

U.S. Market Report: Wall St ends shortened session steady. The Dow Jones Industrial Average fell 14.9 points, or 0.1 per cent to 17,798.49. The S&P 500 added 1.24 points, less than 0.1 per cent, to 2,090.11, while the Nasdaq Composite rose 11.38 points, or 0.2 per cent, to 5127.52.... Read more

North/South Americas Market Report: North and South American markets finished mixed as of the most recent closing prices. The S&P 500 gained 6.02%, while the Bovespa led the IPC lower. They fell 2.70% and 0.96% respectively... Read more

European Market Report: European markets finished lower today with shares in France leading the region. The CAC 40 is down 0.32% while London's FTSE 100 is off 0.28% and Germany's DAX is lower by 0.24%... Read more

Asian Market Report: Asian markets finished broadly lower today with shares in China leading the region. The Shanghai Composite is down 5.48% while Hong Kong's Hang Seng is off 1.87% and Japan's Nikkei 225 is lower by 0.30%... Read more

Oil prices fall more than 3% as dollar and oversupply continue to weigh... Read more

Gold prices fell to fresh five-year lows on Friday, with the precious metal posting its sixth consecutive weekly loss, as the strengthening dollar continues to encourage selling. Gold futures for December delivery GCF6, -1.02% settled down $13.80, or 1.3% at $1,056.20 an ounce on Comex.... Read more

Black Friday draws thinner crowds. Millions of Americans left their Thanksgiving meals to hit stores across the country in an annual shopping ritual, but the crowds on early Black Friday morning were thinner than years past at some shopping centres... Read more

Cue the bargain hunters: The Black Friday shopping marathon has begun. Millions of people are participating in retail's annual event, which began again this year on Thanksgiving. And, of course, most markdowns are available online. A sales report from sales tracker Adobe said more than $1.7 billion was spent online on Thursday.... Read more

Toys “R” Us Inc. Chief Executive Officer Dave Brandon said the toy industry isn’t putting up the kind of growth numbers that some predicted this holiday season. Though Toys “R” Us met its revenue target for Thanksgiving day, the broader toy category has been more sluggish than expected, Brandon said in an interview... Read more

Competency of Viacom billionaire Sumner Redstone questioned in court... Read more

Ford Motor Co. is ditching its "Friends & Neighbors" sales campaign after the insider-pricing promotion failed to live up to expectations. The No.2 U.S. auto maker launched the deal in early November, expecting to run it until early January. Customers and dealers, however, gave it a lukewarm reception, and Ford will move to a more-conventional "bonus cash" merchandising strategy for December, according to several dealers briefed on the plan... Read more

ECB Risks Chasing Own Tail on Bond Buying With Deposit-Rate Cut... Read more

Children's electronic toy maker Vtech hacked.... Read more

A Milan judge threw out a prosecutor’s request to indict Nomura Holdings Inc. because the notification to the bank wasn’t properly made, according to a defense lawyer for the Japanese firm. Judge Livio Cristofano made the decision on Friday during a preliminary hearing in the case that involves a derivatives contract arranged by Nomura to allegedly hide losses at Banca Monte dei Paschi di Siena SpA. Prosecutors can submit a new indictment request... Read more

Herve Falciani, an ex-employee of HSBC's Geneva private bank who leaked information on clients and their tax situation, has been sentenced to five years in prison for aggravated industrial espionage, the bank said on Friday. HSBC said it welcomed the ruling on Falciani, a 43-year old French citizen who had been on trial in Switzerland... Read more

Investment bank Lazard is working with Sanofi's management to prepare a sale or listing of its Merial animal health unit, aiming to land the leading advisory job for the deal, which could value the business at up 12 billion euros ($12.7 billion/£8.4 billion), sources familiar with the matter said... Read more

The Dutch finance ministry says it will fight a ruling ordering it to recover as much as €30m (£21.2m) in tax from Starbucks. European competition commissioner Margrethe Vestager ordered the country to recover €20m-€30m in back taxes from the coffee chain, accusing it of benefiting from an illegal tax deal. Starbucks has already said it would appeal against the EU's decision.... Read more

German shoppers' confidence 'dips' amid economic fears... Read more

Volkswagen is giving its German workers nearly a month off over Christmas and the New Year in the wake of an emissions scandal that has hurt sales and staff morale... Read more

Volkswagen’s luxury flagship Audi has suspended two engineers after its larger diesel engines were found evading emissions limits in the US, Audi CEO Rupert Stadler said. VW and Audi notified US authorities last Thursday that about 85,000 vehicles with 3.0 litre V6 diesel engines were fitted with emissions-control equipment that was not disclosed to US regulators... Read more

Russia threatened economic retaliation against Turkey on Thursday and said it was still awaiting a reasonable explanation for the shooting down of its warplane, but Turkey dismissed the threats as "emotional" and "unfitting."... Read more

Profits earned by China's industrial companies dropped 4.6 per cent from a year earlier in October, extending a 0.1 per cent decline recorded in September, as the world's second-largest economy faces continuing headwinds... Read more

One of China's biggest brokerages is being investigated by regulators for suspected "rule violations" weeks after its president committed suicide. Confirmation of the probe into Guosen Securities comes a day after the country's largest broker, Citic Securities, said it was being investigated, following inquiries into several of its executives for insider trading... Read more

Chinese executives keep going missing. Top company executives in China keep vanishing, and some never return to their posts. This week, it was the CEO of the Hong Kong arm of one of China's largest brokerages who disappeared; a few months ago, the president of a giant bank.... Read more

China Mobile in $5 Billion Deal to Consolidate TieTong Assets... Read more

Toyota leads global car sales in October, outsells VW for fourth month... Read more

The board of Nissan will meet on Monday to discuss the Japanese carmaker's negotiations with France over increased state influence on Renault, its parent company and alliance partner, newspaper Les Echos reported... Read more

South Korea's LG Display said Friday it planned to invest close to $9.0 billion in a new plant to produce organic light-emitting diode (OLED) displays, anticipating a surge in demand for the ultra high-definition technology. Total investment in the plant, to be built in Paju near the border with North Korea, is expected to top 10 trillion won ($8.7 billion), the company said... Read more

HSBC is closing its private banking arm in India, where the increasing number of wealthy individuals has led to intense competition for their business. Clients will be given the choice to move to HSBC's retail arm... Read more

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