ASB Securities Morning Brief for Friday, 24 April 2015
Friday, 24 April 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares fell, paced by power and broadband company Trustpower as a major shareholder reduced itsstake. Spark New Zealand, MightyRiverPower and Contact Energyalso declined. The NZX 50 Index fell 35.705 points, or 0.6 percent, to 5757.909. Within the index, 25 stocks fell, 16 rose and nine were unchanged. Turnover was $285 million... Read more

The New Zealand dollar dropped after Reserve Bank assistant governor John McDermott said the bank isn't considering a rate hike, suggesting next week's official cash rate review may be more dovish than expected. The kiwi fell to 75.88 US cents from 76.26 cents before the speech was released and from 76.81 cents late yesterday. The trade-weighted index weakened to 79.17 from 80.08 yesterday... Read more

Bank boss fuels talk of rate cut. A speech by the Reserve Bank's assistant governor and chief economist John McDermott yesterday gives support to market expectations that the next move in interest rates is likely to be down... Read more

The Reserve Bank of New Zealand isn't considering an increase in interest rates at present and is watching for any signs of weakening demand and domestic inflationary pressures that could warrant a rate cut, says assistant governor John McDermott. The kiwi dollar shed almost half a US cent... Read more

Reserve Bank appoints Conor English, Tony Caughey as external monetary policy advisers... Read more

Sluggish growth hits South Island-listed companies. South Island companies have not fared well in the past year, experiencing the smallest yearly growth in three years.... Read more

Consumers remain perky, the ANZ-Roy Morgan survey has found. The survey's index lifted four points from its March level to 129. It has only rarely been higher than this in the past 10 years... Read more

ASB has today matched Kiwibank's recent move lower in their three year 'special' rate. At the same time it has removed its 18 month and 4 year 'specials'... Read more

Record migration means continued pressure on Auckland market... Read more

Maori Development Minister Te Ururoa Flavell wants urgent improvements in Christchurch's "squalid" rental conditions, but a tenants advocacy group says there needs to be less talk and more action from politicians... Read more

Regional Review - Dunedin. in Dunedin is a game of two halves. You can join the hurly-burly of the student flat market in the streets surrounding Otago University or choose the tortoise-style option with a family-friendly property elsewhere in the city... Read more

Contractors cut as Fletcher downsizes repair programme. Major downsizing of the Fletcher earthquake home repair programme will not slow progress in its final phase, the company says.... Read more

KiwiSaver tops $27 billion: Morningstar... Read more

KiwiSaver assets have seen "phenomenal growth", increasing by $1.8 billion in the past three months alone according to a new survey. The Morningstar KiwiSaver survey canvassed 16 providers and 130 products for the three months ending March 31 and described ASB KiwiSaver as the "stand-out performer" - topping both the growth and moderate categories... Read more

FMA is surveying advisers who are currently authorised to provide DIMS, to determine what action they plan to take after next month.... Read more

The Financial Markets Authority's inaugural survey of authorised financial advisers show there's still scope for conflicts of interest, with some advisers aligned to a single product provider or getting paid volume bonuses... Read more

'Contentious posturing' paying off, bullish UK fund manager Hugh Hendry tells Kiwis. Hugh Hendry, one of Britain's highest profile hedge fund managers, has told New Zealand institutional investors his 2013 conversion from a bearish to bullish outlook is starting to pay off.... Read more

Poor turnaround times hurt advisers. Advisers are frustrated with having to cope with unacceptable delays in loan processing with lenders. It appears that even with the hot property market lenders have not yet geared up their broker centres to deal with the sheer volume of loan applications coming through. With evidence that some deals are taking four weeks to complete, there is a real danger that consumers will abandon brokers... Read more

Prices for most wool types rose at the Christchurch wool sale on April 23. Wool buyers were active in securing the limited volumes on offer for processing and export, particularly crossbred lambs' wool and good style fleece wool... Read more

Store lamb prices rose $4 to $5 a head at livestock sales at Canterbury Agricultural Park, in Christchurch, this week. Prime cattle had a strong sale with several heavy steers making $2000 and heifers reached $1800... Read more

Unlisted rejects NZX claim exemption to new rules would undermine confidence in NZ markets... Read more

Unlisted, the share trading platform, is rejecting claims by stock market operator NZX that its request to be exempted from new rules that would make it a licensed market could undermine confidence in New Zealand's financial markets... Read more

The operator of Southland's Tiwai Point aluminium smelter has posted a $74 million profit despite a volatile aluminium market and high domestic power prices... Read more

Trustpower shareholder Tauranga Energy Consumer Trust sold 20 million shares in the power company for $154.8 million as it aims to diversify its investments away from a sole holding in the power company... Read more

China Steel Corp green-lights Kiwi-founded LanzaTech's first commercial plan. China Steel Corporation, Taiwan's largest integrated steelmaker, has given formal approval for a US$46 million (NZ$60m) investment in a commercial scale ethanol facility developed by New Zealand-founded LanzaTech.... Read more

NZME’s GrabOne has teamed up with Postr, the app that lets users hire out their smartphone’s lock screen to advertisers in return for cash, to deliver a mobile technology first in New Zealand... Read more

Core Builders Composites, the Warkworth-based company owned by Team New Zealand’s arch-rival Oracle Racing, has had two taxpayer subsidies in the past three years. The most recent was a growth grant from Callaghan Innovation in August last year for an undisclosed sum. Core Builders' financial accounts filed with the Companies Office show it also received a $435,631 grant from New Zealand Trade and Enterprise in 2012... Read more

New Zealand Rugby, the national sports administrator, is putting out feelers for a Japanese corporate sponsor, betting that the debut of rugby at the Rio Olympics next year and Japan's hosting of the Rugby World Cup in 2019 will stoke interest in the game... Read more

Rapidly expanding services enable customers to do nearly all financial dealings on the go. Exactly how much you can do via online banking has been under the microscope in a new survey looking at major banks' use of online space.... Read more

Sussan Turner has been appointed to the board of TVNZ, just eight months after she stepped down from her previous role as MediaWorks group chief executive. The appointment was announced today by Broadcasting Minister Amy Adams, who noted that Ms Turner’s “extensive television and media knowledge and experience ... will bring real depth and substance to the role.”... Read more

Plus4 Insurance Solutions has appointed Peter Standish to a newly-created role of group general manager.... Read more

Steve Donohue named managing director of Woolworths' Progressive unit... Read more

Auckland magazine publisher Trends Publishing says it is seeking legal advice after government grants agency Callaghan Innovation demanded it repay $332,967. Callaghan Innovation awarded Trends a research and development growth grant in March 2014 but suspended further payments in December and contacted the Serious Fraud Office (SFO). Trends, which publishes a range of interior design magazines, denies any wrongdoing... Read more

Opinion - Sam Judd: Should we drill for oil?... Read more

Opinion - David Hargreaves: Those cheeky Singaporean adverts about Auckland apartments might help to focus the Government's mind around foreign ownership... Read more

Opinion - Carmel Fisher: Generation has a mind of its own. Younger group’s suspicion of financial assets could have lasting results... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket closed largely flat, despite a strong rally in mining stocks, as uncertainty over the timing of future cuts to the official cash rate weighed on financial stocks. At the 4.15pm (AEST) official market close, the benchmark S&P/ASX200 index was 7.3 points, or 0.13 per cent, higher at 5,844.8, while the broader All Ordinaries index was up 7.5 points, or 0.13 per cent, at 5,820.3.... Read more

The Australian dollar has drifted lower amid US dollar strength and disappointing Chinese economic numbers. At noon (AEST), the local currency was trading at US77.33c, down from US77.78c yesterday... Read more

Treasurer Joe Hockey has warned that changes to negative gearing could force up rents while undermining the financial security of investors and their children. While closing off changes to a system that costs the Budget more than $4 billion a year, Mr Hockey recommitted to "structural" reforms in education, health and welfare to help repair the Government's bottom line... Read more

Negative gearing: Labor treasury spokesman Chris Bowen says any changes to be taken to election... Read more

Australia on course for growth downgrade. Australia's central bank is likely to nudge its economic growth forecasts lower, some economists say, as commodity price falls continue to hurt the resource-rich economy with no offsetting currency declines to cushion the blow... Read more

CPA Australia excluded from budget lock-up for 'first time in history of organisation'; Treasury says exclusion unintentional. Australia's top accounting body says it has been excluded from the federal budget lock-up because of its commentary against public policy.... Read more

A report on the WA Government's proposed $1.6 billion road freight link between Kewdale and Fremantle has described the project as a waste of taxpayers' money that should be reconsidered immediately... Read more

Economic conditions are top perceived business risk. Local economic conditions have toppled regulatory and legislative policies as the biggest perceived risk for businesses, according to an annual survey of executives.... Read more

Golden decade of housing on its way: Stockland... Read more

Potash-focused South Boulder Mines has been granted a trading halt by the ASX pending capital raising details.... Read more

Fortescue Metals shares have posted their strongest gains in five months as the iron ore miner welcomes a $US2.3 billion ($A2.96 billion) debt refinancing and much needed lift in iron ore prices. Fortescue's offer of senior secured notes was originally worth $US1.5 billion, but it increased it by $US1.8 billion amid strong demand from US investors... Read more

Carbon Energy has received a price and volume query from the ASX after its shares rose to a high of $0.032 today from a low of $0.019 on Friday, 17 April 2015.... Read more

BC Iron is struggling to break even as weak prices forced the Pilbara miner to make deeper cost cuts. The junior iron ore producer received an average price of $US54 ($A69.61) per dry metric tonne for its iron ore during the March quarter, compared to all-in cash costs of $A57 per wet metric tonne. BC Iron cut its costs during the quarter and averaged $A52 per wet metric tonne during March... Read more

The owner of one of Australia's largest pharmaceutical groups believes the push to open up ownership of pharmacies to supermarket chains is dead in the water. Australian Pharmaceutical Industries (API), which owns the Priceline brand, believes the Abbott government is unlikely to act on recommendations from the recently released Harper review to change current ownership restrictions on pharmacies... Read more

Apartment developer Metro Property Development is planning to offer shares in its company at a price that equates to 8.5 times its earnings. It comes as it fronts investors ahead of its anticiapted float as a $500 million company on the Australian Securities Exchange in June... Read more

Australia's biggest gold miner Newcrest Mining has notched up positive production and cost numbers for the second straight quarter as it tries to turn around its flagging fortunes. The group also received a better gold price, due largely to a falling Australian dollar, of $A1,556 an ounce on average during the three months to March, up from $A1,402 in the previous quarter. Newcrest shares fell 50 cents, or 3.4 per cent, to close at $14.10, weighed down by falls in the gold price overnight.... Read more

Demand soars for MYOB IPO from note holders... Read more

Increased mobile phone service competition may hurt Telstra, as the telco giant braces for customers demanding more portable streaming content. The average revenue Telstra derives from each mobile user is declining, with voice and data services affected... Read more

Google crashes Telstra's party. As a team of Telstra's most senior executives climbed a Sydney podium to update investors on its progress on strategy with an address themed "Growth through network and product differentiation", they would have known Google had already disrupted their show. Only hours earlier, Google announced it was moving into the phone business... Read more

Freelancer Limited releases design content into Showcase platform... Read more

Cyber attacks on Australian businesses and government increased by 20 per cent last year, according to a defence force intelligence unit. The Australian Signals Directorate said the most commonly targeted sectors are banking and finance, resources and energy, defence capability and telecommunications... Read more

Thousands of Australian ecommerce sites vulnerable to 'Shoplift' bug.... Read more

Troubled contractor Viento has entered administration a day after calling a trading halt in its shares to consider fresh funding options. The company announced this morning it had called in Hall Chadwick to manage its affairs, while it worked on a formal restructure of Viento via a Deed of Company Arrangement... Read more

A further 4300 Commonwealth Bank financial planning customers could be in line for compensation from a review process that may cost the bank more than $20 million. An official review has found the bank’s original compensation scheme for customers who received shoddy advice was “deficient and inconsistent”... Read more

Boards featuring women perform better than all-male ones, Centre for Gender Economics and Innovation study finds... Read more

Despite Anzac Day being all about sacrifice — “entitled” Aussies will be chucking sickies en masse on Monday. Bosses have been warned to expect that up to 20,000 extra staff across the state will call in sick today or Monday because they are miffed at missing out on an Anzac Day public holiday. It has been estimated it could cost business and industry in Queensland more than $7.5 million in lost revenue and productivity.... Read more

Opinion - Victoria Thieberger: Weighing up the year's biggest IPO. As investors ponder whether to buy into the biggest IPO of the year, the accounting software firm MYOB, they have a wide price range to consider... Read more

International Headlines

U.S. Market Report: The Nasdaq Composite, the U.S. market index most closely associated with technology stocks, jumped to a 15-year high on Thursday, putting it on track for its first record high close since the technology bubble burst. The Nasdaq jumped as high as 5,069.17, led by shares of Apple, which has been among the biggest positive influences on the index in recent years. The index's last record close of 5,048.62 was hit on March 10, 2000. The S&P 500 was also on track for a record closing high. It hit its most recent record close of 2,117.39 on March 2.... Read more

North/South Americas Market Report: North and South American markets are mixed today. The Bovespa is up 1.81% while the S&P 500 gains 0.39%. The IPC is off 0.06%... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The FTSE 100 gained 0.36%, while the DAX led the CAC 40 lower. They fell 1.21% and 0.62% respectively... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 0.36% and the Nikkei 225 rose 0.27%. The Hang Seng lost 0.38%... Read more

The U.S. Economy Hasn't Disappointed Analysts This Much Since the Great Recession... Read more

Nasdaq CEO: ‘Assume the worst’ on market manipulation efforts... Read more

Facebook shares fell 2% in after-hours trading on Wall Street after the company posted slower revenue growth, while research and development costs ate into profits... Read more

World's Biggest For-Profit College Chain Plans $1 Billion IPO. Laureate Education Inc., the largest for-profit college network in the world, is interviewing banks for a $1 billion initial public offering in the U.S., people with knowledge of the matter said... Read more

Eric Schmidt, the billionaire chairman of Google Inc., bought a 20 percent stake in hedge fund manager D.E. Shaw that was previously held by Lehman Brothers Holdings Inc. Schmidt bought the stake through his investment firm, Hillspire LLC, according to a statement today. The stake is passive and there won’t be any changes to management or operations of D.E. Shaw, the companies said... Read more

Donald Trump slams Pacific free trade deal... Read more

Caterpillar Inc.'s stock CAT, surged 4.3% in premarket trade Thursday, after the heavy equipment maker reported first-quarter profit and sales that were well above expectations, and raised its full-year earnings outlook... Read more

Tesla's Elon Musk didn't take a salary in 2014. Billionaire Elon Musk is working for free. Sort of. The Tesla (TSLA) chief executive's total compensation package in 2014 was $35,360, according to a regulatory filing. That would only get you half way to buying a Tesla Model S... Read more

France defends Renault stake increase in letter to Ghosn - sources... Read more

Deutsche Bank in record $2.5bn fine over interest rate manipulation. ... Read more

US car giant General Motors has reported a fall in first quarter revenues, following lower demand from Brazil and Russia. The Detroit-based automaker reported revenues of $35.7bn (£23.7bn), 4.5% lower than $37.4bn last year... Read more

Russia is looking to Malaysia to assist and build its knowledge and human capital in Islamic Finance, as it looks to introduce the system for its Muslim citizens, reported... Read more

Brazil's state-run oil company, Petrobras has taken a $2bn (£1.3bn) charge for costs related to corruption. The company has published accounts for last year showing an overall loss of $7.2bn... Read more

Shares in Brazil's state-run oil company Petrobras fell 5 percent on Thursday, a day after it reported the largest loss ever on $17 billion in charges, giving investors a deeper look at the fallout from a huge corruption scandal... Read more

An index of China's manufacturing activity fell to a 12-month low in April, HSBC said Thursday, indicating further weakness as growth sputters in the world's second-largest economy. The British bank's preliminary purchasing managers' index (PMI) came in at 49.2, it said in a statement, below the 49.6 final reading in March... Read more

Chinese smartphone maker Xiaomi Corp. is seeking to replicate its domestic success by launching its first phone aimed at overseas consumers in India on Thursday... Read more

Toyota is still at the top in global vehicle sales, selling 2.52 million vehicles in the first quarter and outpacing rivals Volkswagen and General Motors even as weakness in Japan dragged on its growth. The Japanese automaker has been the world's top-selling automaker for the past three years. No. 2 Volkswagen of Germany sold 2.49 million vehicles for the January-March period, edging out US automaker General Motors which reported global sales of 2.4 million vehicles... Read more

Reasons Indian Stocks Have Gone From Best to Worst. The Indian stock market was one of the best performing markets in the world last year. This year it is among the weakest. India’s bellwether Sensex jumped 30% last year. It was among the top developing country markets for the year with only China doing better... Read more

Opinion - Oliver Marc Hartwich: Britain's choice between the devil and the deep blue sea... Read more

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