ASB Securities Morning Brief for Thursday, 29 September 2016
Thursday, 29 September 2016

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose, with Chorus, Orion Health Group and Air New Zealand recovering losses, while Tower resumed its fall. The S&P/NZX 50 Index gained 37.53 points, or 0.5 percent, to 7,290.45. Within the index, 22 stocks rose, 15 fell and 13 were unchanged. Turnover was $119.6 million... Read more

The New Zealand dollar fell from its overnight highs, to be little changed after stronger-than-expected US consumer confidence and the first US presidential debate that some commentators gave to Democratic candidate Hillary Clinton. The kiwi traded at 72.96USc, having reached as high as 73.25USc overnight, from 72.90USc late yesterday. The trade-weighted index edged up to 77.37 from 77.26... Read more

Spring is in the air - BusinessNZ. BusinessNZ has issued an upbeat report on the economy, saying nearly all the indicators point to continued expansion. "There's a distinct spring in the step of the economy," chief executive Kirk Hope said on Wednesday when he released BusinessNZ's latest Planning Forecast... Read more

Almost 20% of people planning a purchase in the next year are looking for an investment property. A new report shows nearly half-a-million New Zealanders plan to purchase, sell the property they live in, or sell another property within the next year... Read more

Incomes key to stability of price rises: ANZ. Discussions about housing affordability that focus on rising house prices are missing the other part of the equation: Incomes, ANZ’s economists say. They have released their latest Property Focus report, which looks at the state of the housing market... Read more

The Resource Management Act has failed to live up to expectations protecting New Zealand's environment, according to a report just out which calls for sweeping reforms. Evaluating the Environmental Outcomes of the RMA was written by the Environmental Defence Society, NZ Council for Infrastructure Development and the Property Council, evaluating whether the 25-year-old law had delivered desired environment outcomes for New Zealand... Read more

A new coalition of environmental, business and infrastructure lobby groups has added new weight to a growing consensus that the 25 year-old Resource Management Act is failing both to allow sufficient development and to protect the environment. However, the report says poor implementation is a major part of the reason for that failure and that legislative reform is not the only possible answer for law that was ground-breaking when passed in 1991 but has been the subject of constant attempts at reform... Read more

Fees in dollar terms? Easier said than done. Work is under way to require superannuation savings scheme providers to report on their annual fees in dollar terms – but some providers say that might be harder than some expect. The Financial Markets Authority, Commission for Financial Capability and Ministry of Business, Innovation and Employment are working on a project that could lead to some fund managers being required to change the way they disclose fees... Read more

Beef + Lamb New Zealand will close down offices in the United Kingdom, South Korea and Japan as it switches its marketing strategy to focus on new and emerging markets. The closures will trim $1 million off its $5.5m budget for market development, said chairman James Parsons. Offices will remain open in Brussels, the centre of trade negotiations for Europe, and in China, which has become one of New Zealand's major meat markets in recent years... Read more

Westland Milk Products, the Hokitika-based dairy cooperative, has cautiously affirmed its forecast payout for farmers for the current season, noting the recent recovery in global dairy market is still prone to volatility. The milk processor kept its forecast cash payout range for the 2016/17 season of between $4.55 and $4.95 per kilogram of milksolids and an advance payout rate of $3.80 per kgMS from September to June. Last month it forecast an average operating surplus between $4.75 and $5.15 per kgMS for the season... Read more

The Department of Conservation and Hawke's Bay Regional Investment Company (HBRIC) are appealing to the Supreme Court over a conservation land swap which the Court of Appeal halted. The government department and the regional council-owned sponsor of the Ruataniwha dam want to overturn an appeal court ruling against a land swap deal enabling the Ruataniwha Water Storage Scheme and today sought urgent leave to the Supreme Court to argue the case... Read more

The second stage of a major South Canterbury irrigation scheme, Central Plains Water, will be finished by September 2018 after unanimous support from shareholders. The first stage of the project began last August and, when completed, the scheme will irrigate 50,000 hectares of dairy, horticulture and stock land between the Rakaia and Waimakariri Rivers... Read more

Marlborough has tipped Central Otago from its pedestal as the source of the country’s best Pinot Noir wine. The International Wine and Spirit Competition (IWSC), based in the UK, also presented the top Sauvignon Blanc Trophy to a Marlborough product... Read more

OceanGold says its mine and ownership may have been confused with the former Oxiana Mining Corporation, now named Royalco, by the Environmental Justice Atlas website, which purports to document and catalogue social conflict on environmental issues. OceanaGold says its Didipio mine is several kilometres away from Bungkalot ancestral land... Read more

Milford Asset Management has reduced its holding in crime fighting software company, Wynyard Group, taking its ownership to 5.7 percent from 7.6 percent in December last year... Read more

Seadragon, the fish-oil refiner, has warned investors that preliminary talks with a potential new cornerstone investor have failed. The Nelson-based company is in the middle of a rights issue where current shareholders can take up one new share for every two currently held at 0.8 cents apiece. In an update to the NZX, Seadragon said it had raised a total of $1.5 million so far, with the issue to close on Oct. 10. Shares in Seadragon were unchanged at 0.9 cents and have fallen 27.6 percent since the start of the year. Shares in Comvita are down 0.87 percent to $11.35. They've risen 36.5 percent since the start of the year... Read more

Hellaby Holdings' board sees more value in the automotive and resources services investor than the "opportunistic" $322.5 million takeover bid on the table from Australia's Bapcor, managing director Alan Clarke says. The company was blindsided by Bapcor's $3.30 a share offer yesterday, which was an 8.9% premium to the trading price before the announcement. The company got a phone call from Bapcor less than an hour before Hellaby lodged a notice to the stock exchange... Read more

Opposition to a $322.5 million hostile takeover bid for Hellaby Holdings is building as investors weigh up the offer from ASX-listed autoparts company Bapcor. Salt Funds, ACC and Castle Investments - who collectively own 30 per cent of the NZX-listed investment firm - have given the deal their seal of approval through entering a lock-up agreement to sell their shares... Read more

Intueri Education Group, the private education group whose shares collapsed on Tuesday in response to a warning about Australian government audits that threatened its viability, has told investors it retains the support of its lender. ... Read more

Orcon latest ISP to offer one gig UFB fibre... Read more

Real-world benefits of gigabit broadband may start off small. Gigabit broadband will be available to most homes that have access to the ultrafast broadband network from Saturday. But not everyone believes it will be worth the extra $30 or $40 a month it will often cost... Read more

Earthquake Commission chief executive Ian Simpson will leave the Government's disaster insurance scheme head up the geological research unit GNS Science from next year. Simpson will leave EQC at the end of 2016, ending a six-year tenure that spanned the 2010 and 2011 earthquakes in Canterbury that devastated Christchurch, the country's second-biggest city... Read more

Smuggler Marine, an Auckland-based boatbuilder, has removed references to Sealegs Corp amphibious boat technology from its website ahead of an application for a High Court injunction next month over the alleged infringement of Sealeg's intellectual property. At the time Sealegs announced it was seeking an injunction against Orion Marine, Smuggler Marine and some ex-Sealegs employees on Sept. 9, Smuggler was advertising its Strata 770 as being "teamed up with Sealegs technology" but pictures have been taken down, with only a passing reference to the model on a link page... Read more

'Naive' investors claim $650,000 lost to suspected Ponzi.... Read more

Trades get all-clear from 'world leader'. A witness described as one of the world’s leading experts in market manipulation is reportedly due to tell the Auckland High Court there was no evidence Mark Warminger’s trading amounted to market manipulation. The Milford Asset Management portfolio manager is in court, fighting Financial Markets Authority accusations that he misused his position with an institutional investor... Read more

New NZX market manipulation guidance raised in Warminger trial. A joint NZX/Financial Markets Authority collaboration on providing more guidance to the securities industry on the scope of permissible trading conduct was raised today in the country’s first market manipulation trial. Milford Asset Management portfolio funds manager Mark Warminger is accused of breaching securities law that prohibits trading that is not for a genuine commercial purpose and creates an artificial appearance in the market... Read more

Wellington City Council boss Kevin Lavery is defending the lack of paperwork behind a major subsidy for Singapore Airlines, claiming "that's the way any contract goes". Councillors in the capital have called for much tighter limits on Lavery's discretionary spending powers after it emerged a 10-year subsidy worth up to $800,000 a year was completed with almost nothing committed to paper... Read more

Collapsed firm Mainzeal owes $120 million to creditors, legal proceedings continue against firm directors... Read more

A banker who allegedly approved some of the mortgages in a $40 million Serious Fraud Office case is allowed to travel overseas - provided he puts up $500,000 as security. The SFO charged four people - three men and a woman - with obtaining by deception earlier this month. They all have name suppression... Read more

An Auckland company that was told to pay a 10 per cent deposit on a cancelled $7.3m property purchase is appealing the court's decision. The company argued it shouldn't have to pay the $730,000 deposit and that the purchase agreement was void because its director didn't understand English... Read more

Opinion - Pattrick Smellie: Reality check on globalisation’s impact... Read more





Australian Headlines

Australian Market Report: The Australian sharemarket reversed early opening gains as German bank jitters and slowing global trade weighed on markets. The S&P/ASX 200 index jumped 0.6 per cent at the open, but it dropped into the red and closed up 6.5 points, or 0.12 per cent, at 5412.4.... Read more

The Australian dollar is hovering just below 77 US cents as traders wait for more potential clues from US central bank chief Janet Yellen on the timing of an expected interest rate hike. At 1700 AEST on Wednesday, the local unit was trading at 76.85 US cents, up from 76.78 US cents on Tuesday.... Read more

ASX shareholders are worried about blockchain security. Australian Securities Exchange shareholders have raised concerns about how it will protect itself from hackers if it implements blockchain distributed ledger technology for clearing and settlements... Read more

Retirees may do well to go on spending spree. Thousands of well-heeled Australian pensioner couples could have at least 1924 reasons to spend up in the last three months of 2016. Similarly, many single pensioners who have saved hard for their retirement will have at least 1277 reasons reasons to maybe go on a pre-Christmas holiday, upgrade the rooftop solar panels or even spend up big on Christmas presents... Read more

Strong year for Smartfund 80% protected... Read more

One in five Perth homes sell at a loss. Figures compiled by CoreLogic show loss-making sales in Perth are now close to an historic high as sellers find it increasingly difficult to make back their property outlay... Read more

Sydney has the fourth riskiest housing market in the world following a sharp jump in prices in recent years, according to a report by investment bank UBS. Sydney's real housing prices peaked in the second half of 2015 after jumping 45 per cent since mid-2012, the UBS Global Real Estate Bubble Index has found... Read more

A new buyer has emerged for the mothballed Avebury nickel mine near Zeehan on Tasmania's west coast. The mine has been on care and maintenance since 2009 after a drop in nickel prices. Mine owner MMG has entered into a $25-million share sale agreement with Tasmanian company Dundas Mining... Read more

Highfield Resources has reduced performance share reserve balance by $11.5 million to nil for the year ended June 30, 2016.... Read more

Breaker Resources is believed to have been swamped with interest from financial institutions in its looming capital raising. It is understood the gold explorer will raise its proposed $10 million placement to accept $12.5 million in share subscriptions after institutions made bids for up to $40 million worth of new shares in the company... Read more

NSL Consolidated Ltd to start production at iron ore plant in India... Read more

AGL Energy shareholders have delivered a first "strike" on executive pay as the company pledges to boost dividend payouts and forecasts profit growth. Nearly a third of shareholder votes at AGL's annual general meeting went against the company's remuneration report, which included the use of non-financial targets and underlying earnings to calculate chief executive Andy Vesey's $6.94 million pay packet... Read more

IMF may fund class action against UGL. IMF Bentham is planning to fund a shareholder class action against UGL over its handling of a trouble-plagued power station contract on Inpex’s Ichthys LNG project in Darwin... Read more

Alt Resources Ltd has been awarded the maximum drill funding of $200,000 in the second round of the New South Wales governments’ grant scheme. The grant has been awarded for upcoming drilling at the Windy Hill gold prospect at the company’s flagship 70%-owned Paupong gold and base metals project in southern New South Wales... Read more

A handwriting expert will be called on to testify Clive Palmer's signature on a guarantee with a Singapore-based exploration firm is genuine because the businessman claims he can't remember signing it. BGP Geoexplorer is pursuing Mr Palmer's flagship company Mineralogy in the Brisbane Supreme Court for about $22 million in unpaid invoices, with the matter expected to go to trial in early 2017... Read more

White Rock Minerals will undertake an equity raising of up to $5.74 million through a placement and a pro-rata non-renounceable 1-for-2 entitlement offer... Read more

Privately-owned Barminco credited the improvement in earnings before interest and tax to improved operating margins and the underlying strength of the business. Revenue for the year ended June 30 rose 3 per cent to $508 million. Fifty-four per cent of that came from the gold sector... Read more

RungePincockMinaroo Ltd has successfully completed a placement raising $13 million through the issue of 28.9 million shares priced at $0.45 to institutional and sophisticated investors. RUL is the world’s largest publicly traded independent group of mining technical experts operating in 18 locations across 12 countries... Read more

Shares in migme have found some support after the social media and entertainment company moved to reassure investors over its recent share price slide. The Steven Goh-led company said it remained focused on becoming cashflow positive next year. Shares in the company slumped to a two-year low of 19 cents this week. At 12.20pm, they were up three cents, or 15 per cent, to 23 cents.... Read more

Australian vitamins company Blackmores has tapped into a lucrative multi-billion dollar Iranian health market by partnering with a local drug maker. The supplements firm has sealed a deal with Tasnim Pharma to distribute vitamins through the local partner under its own brand name, as well providing training and promotions... Read more

Omni Market Tide Ltd has expanded its reach across real-time stakeholder engagement applications with four new mobile digital products. The four new products, OmniCorp, OmniPeople, OmniMember and OmniComm respond to increasing demand from enterprise organisation for mobile engagement products... Read more

Updater Inc has received commitments to raise $30 million via a private placement of CHESS Depositary Interests (CDI) at $0.50 per CDI. The company received the support of Fidelity International, one of the world’s preeminent investors, along with Thorney Investment Group and other existing institutional shareholders... Read more

Fresh food exporters remain concerned about the flow-on effects of Korean company Hanjin Shipping going into receivership around one month ago. At the time, the company's more than 40 ships were carrying cargo estimated at more than $18 billion ($US14 billion)... Read more

NBN Co dumps Optus HFC for FTTdp. NBN Co has ditched plans to use the bulk of Optus' hybrid-fibre coaxial (HFC) network and will instead deploy fibre-to-the-distribution point (FTTdp) technology to around 700,000 premises nationwide... Read more

1-Page continued to deliver growth across new client sign ups in the third quarter, alongside multiple existing client upsells... Read more

Carnegie Wave Energy Ltd has been awarded $2.5 million from the Australian Renewable Energy Agency (ARENA) to support the world’s first solar, battery and wave integrated microgrid project in Western Australia... Read more

The WA arm of real estate giant Colliers International is disputing any liability under a guarantee it signed promising to “pay all moneys due and payable” by building company CPD Group to subcontractors on an apartment complex in Rockingham... Read more

Estate agency foils $500K cyber theft bid. In a worrying trend, the real estate agency is the latest in a string of businesses targeted by cyber thieves, after a $615,000 payment to one of businessman Andrew Forrest’s agricultural companies was recently fraudulently diverted by a virus on a home laptop... Read more





International Headlines

U.S. Market Report: Wall Street was lower on Wednesday as health stocks weighed and financials fell after Federal Reserve Chair Janet Yellen said the central bank was considering changes to the annual stress test... Read more

North/South Americas Market Report: North and South American markets are mixed today. The IPC is up 0.42% while the Bovespa gains 0.40%. The S&P 500 is even... Read more

European Market Report: European markets finished higher today with shares in France leading the region. The CAC 40 is up 0.77% while Germany's DAX is up 0.74% and London's FTSE 100 is up 0.61%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Hang Seng gained 0.20%, while the Nikkei 225 led the Shanghai Composite lower. They fell 1.31% and 0.34% respectively... Read more

OPEC could announce an output-freeze deal on Wednesday in Algeria, although full details are unlikely to be firmed up before a formal meeting of the Organization of the Petroleum Exporting Countries in November, two OPEC sources said... Read more

Citi Warns on Gold as Bank Boosts Odds of Trump Win to 40%. Gold may be in for a bumpy ride in the final quarter as Republican candidate Donald Trump now has a 40 percent chance of winning the presidential election and investors will be preparing for the possibility of higher U.S. interest rates, according to Citigroup Inc... Read more

IMF chief sees lower U.S. growth, calls trade barriers 'malpractice'... Read more

Federal Reserve Chair Janet Yellen’s defense of the central bank as non-partisan came under attack on Wednesday, as a Republican congressman cornered her on whether a key policy maker would have a conflict of interest in discussing a post in the next U.S. president’s administration... Read more

Blackberry is to stop designing smartphones in-house after 14 years, the company has announced. Once a market leader, the company has struggled to keep pace with modern handsets produced by rivals such as Apple and Samsung. In May, the company's chief executive, John Chen, said he would know by September whether the hardware business was likely to become profitable.... Read more

Wells Fargo chief executive John Stumpf will forfeit $41m (£31.5m) in bonuses as the bank tries to deal with a scandal over its sales practices. The bank is investigating how two million accounts were opened without customers' permission... Read more

Budweiser owner Anheuser-Busch InBev's £79bn takeover of rival SAB Miller is set to go ahead after the shareholders of both firms approved the mega-deal. The deal is expected to be completed on 10 October and will create the world's largest beer firm... Read more

Anheuser-Busch to pay SEC $6 million to settle bribery charges... Read more

Deutsche Bank has lost half its market value this year and profits have collapsed. No wonder investors are worried. The market panic reached fever pitch this week -- the stock slumped to its lowest level in more than 20 years -- on fears the bank may not be able to afford a massive U.S. fine for trading in toxic mortgages a decade ago... Read more

Erdogan Adviser Says Turkey Should Consider Buying Deutsche Bank. Deutsche Bank AG’s crashing share price is prompting takeover speculation from unexpected places. Yigit Bulut, a chief adviser to Turkish President Recep Tayyip Erdogan, said the country must consider using a new wealth fund or a group of state-owned banks to buy the Frankfurt-based company. Bulut made the proposal on Tuesday via his Twitter account, saying Germany’s largest lender should be made into a Turkish bank... Read more

The German government and financial authorities are working on a rescue plan for Deutsche Bank in case it cannot pay fines in the US, according to Die Zeit newspaper. Germany's biggest lender is facing a $14bn (£10.8bn; €12.5bn) bill for mis-selling mortgage-backed bonds before the financial crisis of 2008... Read more

The German government denied that it was working on a rescue of Deutsche Bank after a newspaper report about such plans fueled fears over the future of the biggest lender in Europe's largest economy. European Central Bank President Mario Draghi said that the bank's low interest rate policies were not to blame for the German group's problems but declined comment on whether the state should step in to help... Read more

Sainsbury's has reported a second consecutive quarter of falling sales, blaming falling food prices. Excluding fuel, like-for-like sales, which strip out the impact of new store openings, fell 1.1% in the 16 weeks to 24 September. Total sales fell 0.4%. Despite the drop, the UK's second-largest supermarket said it was continuing to make progress... Read more

UK car firms 'want to be in EU single market'... Read more

London Property Stalls as Brexit Turns Sellers into Landlords... Read more

Moscow's city government is ditching Microsoft Outlook for Russian-made software, answering President Vladimir Putin's calls for more digital sovereignty. The city will initially install locally developed MyOffice software on the computers of 6,000 workers, replacing the Microsoft e-mail service they currently use. MyOffice is made by Russian company New Cloud Technology... Read more

Russia, the world’s largest energy exporter, is on course to pump a post-Soviet record amount of oil in September, adding as much as 400,000 barrels a day to the country’s production. The output surge comes as OPEC nations meet in Algeria, with discussions to curb a global surplus at the top of their agenda... Read more

Norway’s $890 billion wealth fund shrugged off a call to increase emerging market investments after it over the past four years built up a position of about 10 percent in the world’s fastest growing economies... Read more

Chinese billionaire Wang Jianlin made his fortune in the country's real estate market -- and now he's warning that it's spiraling out of control. It's the "biggest bubble in history," he told CNNMoney in an exclusive interview Wednesday... Read more

The biggest initial public offering of 2016 ended with a whimper. China's state-owned Postal Savings Bank (PSBC) debuted on the Hong Kong Stock Exchange on Wednesday after raising $7.4 billion in its IPO, less than it had hoped... Read more

India's economy is booming. It's also becoming much more competitive. The country has zoomed higher in a new ranking of global competitiveness by the World Economic Forum, marking the second consecutive year of massive gains following a long malaise... Read more

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