ASB Securities Morning Brief for Thursday, 26 February 2015
Thursday, 26 February 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose to a record, led by Xero after it raised $147 million from two American fund managers. Air New Zealand gained as it posted savings on falling oil prices. The NZX 50 Index advanced 119.327 points, or 2.1 percent, to 5842.292. Within the index, 27 stocks rose, 12 fell, and 11 were unchanged. Turnover was $161 million... Read more

The New Zealand dollar gained after testimony by Federal Reserve chair Janet Yellen left open the prospect for low interest rates to remain in place for a few more months in the US, while better than expected Chinese manufacturing data stoked demand for the Australasian currencies. The kiwi rose to 75.26 US cent at 5pm in Wellington from 74.66 US cents at 8am and 74.75 cents yesterday. The trade-weighted index advanced to 77.93 from 77.70 yesterday... Read more

High dollar doesn't equal bargain for shoppers. Although kiwi at near record against Aussie, importers probably bought products at fixed exchange rate a long time ago... Read more

A stronger Banking Sector fuels economic growth... Read more

New Zealand bank profits rose 20 percent to a record last year as low global interest rates made it easier for lenders to compete for mortgage customers in a highly competitive market... Read more

Fitch affirms AA- credit ratings for big four NZ banks... Read more

Nimby Auckland needs to address height restrictions - Wheeler... Read more

Home loans became more affordable last month, with the typical home buyer saving $30 per week on mortgage repayments compared to December. The AMP360 Home Loan Affordability Report, formerly the Roost report, released today, found home loan affordability improved by 4 per cent in January compared with December... Read more

The New Zealand Treasury has pulled in private sector directors to give it advice on how to put Crown entity boards under more scrutiny so as to avoid another rapid deterioration such as witnessed by coal miner Solid Energy... Read more

A2 Milk's premium payout attracts farmer interest with lower dairy prices this year... Read more

Just five applications for class licences for discretionary investment management services (DIMS) have been received by the Financial Markets Authority so far. Only one – to Gareth Morgan Investments – has been granted. New DIMS providers had to have a licence as of December 1... Read more

A$147 million capital injection from North American investors will buy Xero some breathing room as it forges on with international growth ahead of a potential sharemarket float in the United States, says an analyst... Read more

Share trading ahead of this morning's announcement of a $147.2 million capital raising by Xero, which caused an unexplained jump in its share price "reeks to high heaven," says David Price, the head of institutional broking for Forsyth Barr. Xero chief executive Rod Drury insists he is "pretty confident" last week's share price movement, which prompted a 'please explain' notice from market regulator NZX, is not related to today's announcement that US based institutional shareholders have invested $147.2 million of extra capital into the cloud accounting software firm... Read more

Healthcare and animal care products company Ebos reported a 12 per cent gain in first-half profit after lifting earnings in both its divisions and refinancing debt on more favourable terms... Read more

Airwork Holdings, the aviation service firm, lifted first-half profit 19 percent, beating its prospectus guidance, and has raised its annual earnings forecast after revising the residual value of its Boeing 737 aircraft... Read more

Air New Zealand forecasts fare discounts; yield pressure looming... Read more

A surging Air New Zealand stands to benefit from lower fuel prices next year by up to $249 million but must now fend off growing competition from other airlines also enjoying lower oil prices. The airline yesterday announced a 20 per cent increase in interim normalised earnings before taxation to a record $216 million, although its statutory net profit slipped 6 per cent to $133 million after a 26 per cent lift in tax paid... Read more

The Martin Jetpack maker plunged back to earth toward the end of its first day on the ASX, after opening at a premium to its offer price. Christchurch-based Martin Aircraft started trading on the Australian stock exchange yesterday, opening at 60Ac, compared to the 40Ac offer price, which valued the company at $A103 million... Read more

Energy Mad to raise $2.24M in rights issue at 13% discount. The offer opens on March 11 and will close on March 31... Read more

Cue Energy directors say a takeover bid by New Zealand Oil & Gas, at A10c a share, "substantially undervalues" the Australian listed company.... Read more

Tourism Holdings, the largest campervan rental business in Australia and New Zealand, more than doubled first-half profit, beating expectations, after cutting costs and fattening margins. The board declared an interim dividend of 7c per share, up from 5c a year earlier.... Read more

AXA signs agreement with SimCorp... Read more

Retirement village operator Metlifecare says a 48 per cent boost in first half net profit to $39.7 million comes as it makes progress on a target of building 200-plus units and care beds annually... Read more

Good response to more sustainable commission: AIA. The insurer has previously had two options: Upfront commission of between 180% and 200% and trail commission of 5% to 7.5%, or upfront commission of 110% and trail of 25%... Read more

Direct-to-consumer sales now make up half of nib’s new policies but its adviser business is growing strongly, its chief executive in New Zealand says... Read more

AMP life business flat, but company on track. AMP’s goal of diversifying its business is showing signs of success with its wealth management business underpinning a strong performance in the 12 months to December 31.... Read more

Auckland business leader Sir Stephen Tindall is making a last-gasp plea to Auckland Mayor Len Brown and councillors to halt further reclamation of the Waitemata Harbour for port use until a full study of the economic, social and environmental impacts is complete... Read more

Len Brown promises mid-year start on City Rail Link... Read more

Tower deal boost for rail link. Auckland Council and commercial landlord Precinct Properties have struck a deal to allow the City Rail Link tunnels to run beneath a $550 million, 36-level downtown office and shopping tower... Read more

Auckland Airport is resisting pressure from a community group to soundproof homes under new flight paths north of Manukau Harbour.... Read more

ANZ Investments has taken the top award at the Morningstar New Zealand Fund Manager of the Year Awards in Auckland tonight... Read more

Sir Stephen Tindall's "skills, expertise and drive have made thousands of Kiwis better off", that's according to the chief judge who selected him to be New Zealander of the Year. Warehouse founder and philanthropist Sir Stephen was given the award at a ceremony in Auckland last night... Read more

As the winning town in Chorus' Gigatown competition, Dunedin gets superfast UFB fibre at a low price from today (plus $700,000 in community and development funds)... Read more

The University of Canterbury is not out of the woods yet despite some encouraging financial progress and it remains on track for a return to surplus by 2019. The university’s audited annual result for the year to December 31, 2014 was a $433.3 million surplus... Read more

Fletcher nabs Spark's Matt Crockett as head of heavy building products... Read more

Consumer NZ and the Cancer Society are calling for an outright ban on commercial sunbeds.... Read more

Kiwibank cancels eftpos, debit cards after 2 ATMs hit by card skimmers... Read more

Opinion - Fran O'Sullivan: Economic issues deserve PMs attention... Read more

New Zealand Herald Editorial: Foreign posts easy to justify... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket has closed stronger for a third straight day after touching a fresh seven-year high in intra-day trade. At the 4.15pm (AEDT) official market close, the benchmark S&P/ASX200 index had risen 17.9 points, or 0.3 per cent, to 5,944.9, while the broader All Ordinaries index was up 18.6 points, or 0.32 per cent, at 5,908.6.... Read more

The Australian dollar is more than US1c higher, helped by a US Federal Reserve in no hurry to hike its interest rate and some positive local economic data. At 4pm (AEDT), the local unit was trading at US78.87c, up from US77.70c yesterday... Read more

Wage rises slow to 17-year low... Read more

The new Treasury boss is confident Australia can retain its triple-A credit rating even as he worries about the level of government debt. John Fraser, making his first appearance before a Senate estimates hearing in the key Treasury role,... Read more

Defence superannuation: ADF Chief Mark Binskin expresses 'preference' for better deal for military personnel... Read more

New fees for foreign property investors. Foreigners seeking to invest in real estate will face fees and tough penalties for rule breaches under a plan to ease upward pressure on house prices for domestic buyers... Read more

We're earning 10 times as much today as 40 years ago. But some things, including housing, is 30 times more than it was in 1975... Read more

Mass sackings by gas companies are underway in the one-time Surat Basin boom towns of Dalby, Chinchilla and Roma with an estimated 1000 people likely to lose their jobs over the next few months. Representatives from Origin’s human resources department flew into the Surat Basin this week to support local management as the cuts were made... Read more

Alicanto Minerals identifies new gold prospects in Guyana... Read more

Mining decline to slow bank earnings: Morgan Stanley. Australia's big banks are facing another earnings headwind from the rapidly cooling mining sector according the influential broking house Morgan Stanley... Read more

Morgan Stanley selling 3.3% stake in Aurizon in a block trade worth $347 million.... Read more

Shares in Macmahon surged today on hopes the troubled contractor has put the worst behind it with a first-half loss of $112.5 million. Shares in Macmahon were up 1.1 cents, or 32.35 per cent, to 4.5 cents at the close after touching an all-time low of 3.1 cents on Monday.... Read more

Tiger Resources chairman Neil Fearis has increased his indirect interest in the company through an on-market purchase. Indirect interests of Fearis acquired 300,000 shares in the company for $19,500, or an average of $0.065 each. He now holds 500,000 shares... Read more

Ausdrill’s bottom line has plummeted deep into the red, as expected, hit by vast impairments and the embattled mining services group expects no earnings relief in the second half. Ausdrill will pay an interim dividend, of 1 cent per share, fully franked, on March 31.... Read more

Lucapa Diamond Company to reveal funding negotiations... Read more

Coles could be facing fines of more than $5 million for misleading consumers over the freshness of its bread. The Australian Competition and Consumer Commission is seeking fines of at least $4-5 million over false labelling which advertised bakery products as “baked today, sold today” and “freshly baked in-store”... Read more

Shares in Cedar Woods Properties jumped after the property developer issued full-year guidance of a record $41 million profit. The bullish outlook was issued despite a 55.8 per cent slide in first-half profit to $9.1 million on the back of a 23.7 per cent decline in revenue to $78 million. Shares in the company were up 30 cents, or 5.22 per cent, to $6.05 at the close after touching an intraday peak of $6.14.... Read more

Melbourne IT this morning revealed plans to purchase Canberra-based managed hosting firm UberGlobal in a $15.5 million deal.... Read more

Westfield considers listing overseas. Its shares closed five cents lower at $10.09.... Read more

Morrison backs billion-dollar Centrelink systems overhaul... Read more

Anti-terror, data services help Veda grow... Read more

Southern Cross Electrical Engineering has posted a 34 per cent slump in first-half profit to $4.1 million, citing challenging conditions in the resources sector. The fall came despite a 28 per cent jump in revenue to $142 million. The company will not pay a dividend.... Read more

Shares in Fleetwood Corporation were lower after it posted a 7 per cent fall in first-half profit to $3.9 million. Shares in the company were off six cents, or 4.35 per cent, to $1.32 at the close.... Read more

Opinion - Callam Pickering: Another hit to household hip pockets. Wage growth continues to moderate and the unemployment rate remains elevated as the Australian economy continues to struggle in the aftermath of the Chinese mining boom... Read more

Opinion/Analysis - Michael Janda: All we need is a little patience, says Wall St on rates... Read more

International Headlines

U.S. Market Report: U.S. stocks held near the unchanged mark on Wednesday, as investors looked for clues to the timing of an interest rate hike during a second day of testimony from Federal Reserve Chair Janet Yellen. The Dow Jones industrial average .DJI fell 4.24 points, or 0.02 percent, to 18,204.95, the S&P 500 .SPX lost 1.69 points, or 0.08 percent, to 2,113.79 and the Nasdaq Composite .IXIC added 1.92 points, or 0.04 percent, to 4,970.04... Read more

North/South Americas Market Report: North and South American markets are mixed today. The Bovespa is up 0.28% while the S&P 500 gains 0.04%. The IPC is off 0.31%.... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The DAX gained 0.04%, while the FTSE 100 led the CAC 40 lower. They fell 0.21% and 0.09% respectively... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Hang Seng gained 0.11%, while the Shanghai Composite led the Nikkei 225 lower. They fell 0.56% and 0.10% respectively... Read more

Brent crude oil rose above $59 a barrel on Wednesday after data showed Chinese factories were producing more than expected and Saudi Arabia's oil minister said oil demand was growing... Read more

Gold prices fell to the lowest level in almost two months after Federal Reserve chair Janet Yellen waxed positive about the economy’s performance, even as she appeared to temper any expectations of an imminent rate increase. Gold for April delivery, the most actively traded contract, slipped $US3.50, or 0.3 per cent, at $US1,197.30 a troy ounce on the Comex division of the New York Mercantile Exchange, the lowest settlement since January 2... Read more

The 10-year Treasury breakeven, the spread between the 10-year note’s yield and that of its inflation-protected counterpart, has widened by about 20 basis points since mid-January — an indication that the bond market is looking past any short-term effect falling commodity prices have had on inflation... Read more

Janet Yellen says Federal Reserve flexible on rate rise... Read more

Waiters, bartenders and other tipped workers in New York will get a raise at the end of the year. The state said Tuesday that it will hike the minimum wage for tipped restaurant workers to $7.50 from $5 an hour on Dec. 31... Read more

Despite wage hike, some Walmart shareholders seek change. A prominent investor in Wal-Mart Stores Inc is pushing ahead with a campaign to link a portion of executive compensation to staff motivation, a sign that the retailer's wage hike last week won't end outside pressure over employee pay and benefits... Read more

T.J. Maxx to hike minimum wage for workers... Read more

U.S. retailer Target Corp reported a stronger-than-expected jump in same-store sales and profits for the key fourth quarter, helped by its expanding online business, and forecast modest earnings growth in the current quarter... Read more

Lowe's Cos Inc, the No. 2 U.S. home improvement chain, reported same-store sales well above analysts' estimates as lower gas prices and an improving job market encouraged Americans to spend more on home renovations. Lowe's shares rose 2.5 percent to $76.50 premarket as the company also forecast full-year sales above estimates... Read more

A Texas jury ordered Apple to pay $533 million for improperly using another company's patented technology in iTunes. The technology is owned by Smartflash, a Texas-based company that licenses seven data storage patents owned by CEO Patrick Racz, who is also the company's only employee... Read more

American Express Co is raising interest rates for a large number of its credit cards following a review that began a year ago, a company spokeswoman said. The company's U.S. consumer credit cards, which have annual rates well below market rates, some as low as 3.25 percent, will be affected, Elizabeth Crosta said... Read more

Chesapeake Energy Corp on Wednesday said it would slash its 2015 spending and rig count in response to low crude oil prices that also pushed its fourth-quarter profit below Wall Street expectations. Shares of Chesapeake fell more than 11 percent, hurt by the earnings miss and a disappointing production outlook, analysts said... Read more

US airline Southwest was briefly forced to ground some flights on Tuesday. The cancellations came after it was revealed the budget carrier neglected to carry out safety inspections on about one fifth of its planes... Read more

Renowned U.S. investor Warren Buffett is readying for an acquisition spree in Europe's biggest economy after setting the ball rolling last week with the purchase of a niche German retailer by his Berkshire Hathaway holding company... Read more

RadioShack to Sell Name Separately With $20 Million Opening Bid. RadioShack Corp.’s biggest shareholder, already seeking to buy hundreds of stores from the bankrupt electronics retailer, agreed to a separate sale of the chain’s name, with bids to start at $20 million... Read more

Labor unions and a charity accused fast food chain McDonald's of avoiding around 1 billion euros ($1.1 billion) in tax between 2009 and 2013 by routing revenues through a Luxembourg unit and called on the European Commission to investigate... Read more

Hewlett-Packard Co reported flat or lower quarterly revenue in all of its operating units on Tuesday, and forecast full-year earnings well below analysts' expectations due to a strong U.S. dollar. Its shares tumbled 6.7 percent in after-hours trading.... Read more

Canadian retailer Hudson's Bay said on Wednesday it had agreed to form two real estate joint ventures that would bring in about C$1.1 billion in cash, reducing its debt, and paving the way for an initial public offering or alternate transaction. The company announced separate joint ventures with two real estate investment trusts, or REITs, U.S.-based Simon Property Group Inc and Canada's RioCan Real Estate Investment Trust... Read more

EU Commission approves proposals for single energy market... Read more

Greece sees problems repaying IMF, ECB; Germans air mistrust... Read more

The two top HSBC bosses have apologised for "unacceptable" practices at its Swiss private bank which helped clients to avoid tax. Stuart Gulliver, group chief executive, said it had caused "damage to trust and confidence" in the company... Read more

Lego has hailed its performance last year as "highly satisfactory" with a 15% increase in both sales and profits. Sales rose 15% to 28.6bn Danish kroner (£2.8bn), with net profit up 15% to 7bn kroner, it said. The firm, the world's largest toy maker, said sales in the US, UK, France, Russia and China were particularly strong.... Read more

VW CEO sees BMW, Daimler managers as potential successors: Stern... Read more

Morrisons has named former Tesco director David Potts as its new chief executive. Mr Potts, who started his Tesco career at age 16 and rose to become retail director in the UK and chief executive of its Irish businesses, will take the helm on 16 March... Read more

RBS suspends another two staff in foreign exchange probe... Read more

South African budget raises taxes and cuts spending... Read more

China has dropped some of the world's leading technology brands from its approved state purchase lists, while approving thousands more locally made products, in what some say is a response to revelations of widespread Western cybersurveillance... Read more

China February flash HSBC PMI at four-month high... Read more

Malaysia's AirAsia X Bhd will cut flights on unprofitable routes, reorganize staff and defer some aircraft deliveries to turn around the loss-making long-haul budget carrier, the airline's acting chief executive said on Wednesday... Read more

Toyota Motor Corp said on Wednesday it was "impossible" to meet union demands for a 13,300 yen ($112) monthly pay rise, as the automaker concluded the first day of labor talks widely considered crucial for Japan's economic recovery. The outcome of annual pay talks at Toyota is often seen as a bellwether for other companies... Read more

Can India Afford to Be Optimistic About the Budget?... Read more

Opinion - Matthew Lynn: U.K. about to lose its safe-haven status... Read more

Latest reports

Latest reports