ASB Securities Morning Brief for Monday, 24 October 2016
Monday, 24 October 2016

New Zealand Headlines

New Zealand Market Report: New Zealand shares were mixed, with the index dragged lower by SkyCity Entertainment Group while Orion Health Group and Kathmandu Holdings rallied. The S&P/NZX 50 Index dropped 15.38 points, or 0.2 percent, to 6,958.4. Within the index, 29 stocks rose, 16 fell and five were unchanged. Turnover was $121.6 million... Read more

The New Zealand dollar fell against a broadly stronger US dollar after the European Central Bank said it was in no hurry to end quantitative easing measures, although the local currency is still on track for a 1.2 percent weekly gain. The kiwi fell to 71.72 US cents as at 5:00pm in Wellington from 72.40 cents late yesterday. The trade-weighted index slipped to 77.20 from 77.58... Read more

New Zealand welcomed record migrants and tourists in the year through September, Statistics New Zealand says. Annual net migration reached 70,000, surpassing the previous annual record of 69,1000 set in the year to August 2016. That was driven both by more arrivals and fewer departures, Statistics NZ said... Read more

James Richardson, says a lack of skilled workers is hampering his ability to grow his leather goods business. He is not alone. Almost half of employers are struggling to fill jobs compared to about 40 per cent globally, according to recruitment firm Manpower.... Read more

Tenancy Services takes on enforcer role. Only “ratbag” landlords who don’t take care of their rental properties need to worry about the Ministry of Business Innovation and Employment’s (MBIE) new “interventionist” powers, a landlord advocate says... Read more

The standard Kiwi home is earning more than the average worker makes from their job in seven of the country's 12 districts. The typical Auckland property now makes $8 a day more in capital gain than the average employee's daily wage. The situation is worst in Waikato where the standard home earns nearly twice what most people make in their job - $219 in daily capital gain compared to $131 in median daily wages... Read more

The Retirement Commissioner says the superannuation age needs to rise from 65 to 67. Diane Maxwell says the country can’t afford not to make the change, calling it a "no-brainer." "The number of 65-plus will double in the next 25 years, the cost of super will triple in the next 20 years," she says.... Read more

Nominations for the 2016 Fonterra Elections close at midday on Tuesday, 25 October. Elections are being held for two farmer-elected Directors for Fonterra’s Board of Directors, 13 members of the Fonterra Shareholders’ Council, two members of the Directors’ Remuneration Committee and one trustee of the Fonterra Farmer Custodian Trust... Read more

Manuka honey and health products company Comvita has placed some 2 million ordinary shares with China Resources Ng Fung, taking the Shenzhen-based Chinese food giant's stake from less than 5 percent to around 9 percent... Read more

Early bird passes for Christchurch Adventure Park close to selling out. Hundreds of mountain bikers have snapped up passes for the Christchurch Adventure Park, despite the $759 price tag. More than 1000 passes have been reserved since they were released at 3pm on Saturday. The cost has attracted some criticism from people saying it was too expensive for the average Christchurch resident... Read more

Opportunist builders, dodgy steel and shonky standards create new building crisis 'worse than leaky homes'... Read more

Alcohol watchdogs are concerned beer branding featuring cute cartoons or resembling softdrinks, may be too appealing to minors. The rise of the craft beer market has resulted in a new wave of creative, colourful, and often cartoonish labels as alcohol producers compete for consumers' attention... Read more

Part of the beleaguered SOL Square in Christchurch could be returned to its former glory, with news that the 179 Tuam Street property is to be auctioned in a mortgagee sale next month. As mortgagee, the BNZ has moved to sell the high profile city property, appointing Colliers International in Christchurch to auction it ‘as is where is,’ on November 23... Read more

Auckland Mayor Phil Goff wants to build a $1 billion stadium on the Auckland waterfront, calling Eden Park a "white elephant" that should perhaps be sold. The idea for a waterfront stadium was brought up a decade ago ahead of the 2011 Rugby World Cup, but ditched in favour of upgrading Eden Park... Read more

Auckland Ratepayers' Alliance slams Auckland Council over social media spending... Read more

Court action on 'shonky' steel mesh creates pressure for government inquiry... Read more

Siblings fight over millions in farming family stoush. A sibling dispute over their parents' estate spilled into the court room after a public relations specialist claimed her million dollar inheritance did not take into account her "economic needs". But Jillian Talbot failed in her bid to overturn her parents' wishes to gift the $4 million Timaru farm to her brother Graham failed with a judge ruling her parents had not breached any "moral duty" toward her... Read more

Troubled property developer Augustine Lau taken to court for toilets emptying into stream... Read more

Opinion - Christopher Niesche: China rang warning bells on gamblers... Read more

Opinion - Brian Fallow: Does a missed target matter? There's little sign that NZ is drifting into deflation... Read more

Opinion - Richard Meadows: Budget Buster: Why are we donating millions to the taxman? Weird fact of the day: The most popular and well-supported charity in New Zealand is almost certainly the Inland Revenue Department. Kiwis give about $3 billion a year to charity, which puts us right up there as among the most generous-hearted people in the world. If you've contributed to this stellar record, take a moment to pat yourself on the back... Read more

Opinion - Chris Keall: The shape of things to come in NZ? AT&T buying Time Warner. AT&T has reached a deal to buy Time Warner for more than $US80 billion, the Wall Street Journal says (the two companies have yet to make a formal announcement. The Commerce Commission — currently considering the Vodafone-Sky TV merger ahead of a November 11 ruling — will be keeping a close eye on events... Read more

New Zealand Herald Editorial: City stadium has to happen eventually... Read more

Opinion - Bernard Hickey: Auckland's funding juggling act. Bernard Hickey calls on Auckland to adopt targeted rates and look at selling its Port operating company, while Wellington should allow congestion charging and multiply its infrastructure fund for a huge and needed road, pipe and house building programme... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket finished a roller coaster session in the red as US dollar strength, Chinese yuan weakness, soft US earnings and domestic apartment-glut jitters weighed on sentiment... Read more

The Australian dollar continues to slide because of the weakness shown in the latest employment data. At 1700 AEDT on Friday, the local unit was trading at 76.38 US cents, down from 76.68 cents on Thursday.... Read more

Delegation departs Wellcamp Airport in international mission to build trade relations with China. Australia's largest private trade delegation has left from Toowoomba on the first international passenger flight from the region. More than 250 producers and representatives from dozens of south-east Queensland businesses were aboard the Qantas flight from Wellcamp Airport at Toowoomba to Shanghai just after 11:00am... Read more

The week in finance: Inflation holds the key to another rate cut while NAB kicks off bank results... Read more

Happiness, not money, is now viewed as the greatest measure of success by Australians. A new survey has concluded Australians regard wellbeing and happiness as the yardsticks for success, not financial security.... Read more

The NSW economy remains the nation's top performer, dominating the other states on key measures of prosperity, according to CommSec's latest State of the States report, while Western Australia is anchored at the bottom of the list as the mining construction boom comes to an end... Read more

Sydney suburbs where first home buyers are dominating investors... Read more

Brisbane property: The suburbs where prices are predicted to rise. House prices are predicted to rise in 29 Brisbane suburbs, with a surprising one-third coming out of one area alone. The latest Hotspotting Price Predictor Index has picked the biggest chunk of metropolitan Brisbane growth would come out of the Moreton Bay area. The Bay toppled Logan City as the top municipality in the capital city region, holding 10 of Brisbane’s 29 growth suburbs... Read more

Failed off-the-plan apartments ‘second-hand’. Good news on prices can be hard to come by for property buyers trying to break into the market. But a ruling by the tax office could offer a glimmer of hope to locals wanting to buy an off-the plan apartment by putting them off-limits to overseas investors.... Read more

The Federal Government is one step closer to passing its key industrial relations legislation, with Pauline Hanson's One Nation confirming its four senators will vote in support of the Coalition's bills... Read more

Rehabilitating abandoned mines could create thousands of 'badly needed' jobs, report says. The rehabilitation of abandoned mines could create thousands of jobs in areas hit hard by the resources downturn, according to a new report. Queensland alone has more than 15,000 abandoned mines, including 300 classified as mega, large or medium size... Read more

Brookside Energy Ltd has been granted a trading halt by the ASX this morning, with its shares placed in pre-open.... Read more

Carbon Energy Ltd granted an ASX trading halt.... Read more

GBM Resources Ltd is nearing completion of the first stage of its diamond drilling program at the Koala mine in the Mount Coolon Gold Project in Drummond Basin, Queensland... Read more

Solar panels owners caught between a rock and a hard place. Households with solar panels are fast looking to batteries as a way to offset the sharp fall in rebates Synergy pays them for their electricity, but making the move could cost them the tariff altogether. David Walker did his research before installing a five kilowatt solar panel system at his home in Bicton south of Perth last year... Read more

An all-Australian consortium of grazier families will compete against mining boss Gina Rinehart and her Chinese partner Shanghai CRED to buy S Kidman & Co. BBHO has offered a $386 million bid to acquire 100 per cent of S Kidman & Co shares, bettering the Rinehart offer by $11 million... Read more

All bets are off: James Packer's exploding China punt. ... Read more

Half of Australia's largest electricity network has been sold to two local firms for Aus$16.189 billion (US$12.35 billion), after Canberra blocked a Chinese bid citing national security. The Australian government has been concerned about investment from Beijing, and twice rejected the sale of the country's biggest private landowner cattle firm S. Kidman and Co to Chinese-led consortiums... Read more

Shares in private hospital operator Healthscope have fallen sharply after the company revealed its revenue growth softened in the first quarter and could dent earnings growth. Chief executive Robert Cooke told the group's annual general meeting Healthscope experienced slower-than-expected revenue growth in the first three months of the 2016/17 financial year... Read more

Media bosses will be pushing the case for even greater industry reforms when they address a Senate committee on Monday. They back the Turnbull government's media reform package that is already on the table, which Prime, for example, says is getting rid of "archaic" legislation which is holding Australian businesses back... Read more

Uber urges action to stop $2 levy. Uber will today launch a campaign urging the public to petition against a $2 levy the State Government is considering on all on-demand transport service rides. Uber will email its 300,000 customers and 5000 drivers with customised letters detailing how much each rider would have paid in fees had they been imposed a year ago.... Read more

Bank plan to improve consumer outcomes behind schedule. The Australian banks' plan to restore public trust and improve customer outcomes has already slipped behind schedule after just six months of operation... Read more

Opinion - Steve Worthington: Apple Pay: Big bank dispute with mobile phone payments might be right. As people increasingly reach for their phone to pay for goods in Australia, existing players in the contactless payment industry are trying to seek a competitive advantage. Four of Australia's leading banks are trying to secure collective bargaining rights for technology that grants access to Apple Pay.... Read more

Opinion - Ian Audsley, Grant Blackley and Andrew Lancaster: Why regional TV is trapped in Groundhog day rerun. Ahead of their appearance on Monday before a Senate committee examining media ownership laws, regional TV bosses say they are trapped in a seemingly endless time loop - just like Bill Murray in Groundhog Day.... Read more

International Headlines

U.S. Market Report: With S&P 500 earnings on track to rise after four consecutive quarters of contraction, U.S. stocks are clearing a major hurdle that puts the record high in sight for the benchmark U.S. stock index. The S&P 500 hit a record high in mid August even after the long profit slump... Read more

North/South Americas Market Report: North and South American markets finished mixed as of their recent closing prices. The Bovespa gained 0.42% while the IPC was higher by 0.30%. The S&P 500 was even... Read more

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

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Hang Seng gained 0.30% and the Shanghai Composite rose 0.21%. The Nikkei 225 lost 0.30%... Read more

Saudi Arabia looks to Russia to boost non-OPEC cooperation... Read more

Aircraft component maker Rockwell Collins Inc has struck a deal to buy aircraft interior maker B/E Aerospace Inc for $62 per share in cash and stock, the companies said on Sunday. The acquisition, valued at $6.4 billion plus the assumption of $1.9 billion in debt, expands the range of products Rockwell Collins supplies to major commercial and business aircraft and broadens its customer based internationally... Read more

GE’s earnings report can still frustrate investors, reporters. General Electric Co.’s third-quarter earnings report follows the rules, but the industrial giant still isn’t making it any easier for investors and reporters who may be in a hurry to see the full story. The layout of the latest report was basically the same as the second-quarter report—consistency can be a jewel--which MarketWatch reported at the time wasn’t wrong, but could still mislead investors... Read more

Tens of millions of IP addresses were used to take down popular websites like Twitter and Netflix as part of a massive cyberattack on Friday. Dyn, an Internet middleman company, was the target of the distributed denial-of-service, or DDoS, attack that hit in three waves. Dyn directs traffic when people type a URL into a browser. So the attack on the company caused temporary outages at many of the internet's most widely-trafficked sites... Read more

Chinese firm acknowledges inadvertent role in cyberattack. The hazard of having so many household devices connected to the internet is even more obvious after Friday's cyberattack. A Chinese firm that makes components for surveillance video cameras now admits their technology was used, in part, to carry out the unprecedented strike... Read more

Goldman Sachs' Latam investment bank chief to leave - source... Read more

AT&T Inc. has reached an agreement to buy Time Warner Inc. for between $105 and $110 a share, with a deal likely to be announced as soon as Saturday evening, according to people familiar with the plans... Read more

Why did AT&T, a wireless phone company, want to own CNN, HBO and Warner Bros.? The answer has something to do with the ways that phones have changed our lives... Read more

The U.S. Senate subcommittee on antitrust will hold a hearing sometime this year on AT&T Inc's planned acquisition of Time Warner, a spokesman for the subcommittee's chairman, Mike Lee, said on Sunday... Read more

Regulatory Microscope Lies Ahead for AT&T and Time Warner. A cable and internet provider decides to buy an entertainment conglomerate. The merger is met with skepticism by industry analysts and outrage by consumer groups, who complain that it would thwart competition, create unfair pricing and incite more media consolidation... Read more

What AT&T's Time Warner deal means for Verizon... Read more

Ceta talks: EU hopes to unblock Canada trade deal. The European Parliament president says he is optimistic that a free-trade deal between the EU and Canada can be signed soon despite last-minute obstacles. Objections by a Belgian region, which opposes the deal, "are for us Europeans to solve", Martin Schulz said... Read more

Still here? EU reality dims British demand on full membership. Britain will "continue to play a full role until we leave", Prime Minister Theresa May told fellow leaders at her first EU summit; but for many Britons in Brussels that is a forlorn hope... Read more

UK to avoid recession in 2016, official figures expected to show. ONS is expected to say growth more than halved in third quarter in verdict on how economy has performed since Brexit vote... Read more

In EU's interests to give Britain tariff-free trade post-Brexit - minister. Britain will have tariff-free trade with the European Union after it leaves the bloc as it is in both sides interests to do so, transport minister Chris Grayling said on Sunday.... Read more

Banks poised to relocate out of UK over Brexit, BBA warns. Large banks are getting ready to relocate out of the UK early next year over fears around Brexit, the British Bankers' Association (BBA) has warned... Read more

RBS paid consortium including Church of England at least £180m for flotation. Companies House documents show sums paid to church and private-equity firms that financed ill-fated spinout of 300 branches... Read more

French Connection is being circled by overseas retail investors and private equity firms amid growing speculation that its septuagenarian founder may be willing to consider a sale. The company, which has been struggling to compete with rivals such as Zara and Ted Baker, has been seeking advice from investment boutique Moelis. It is understood the fashion chain has had recent approaches following the retailer’s fifth consecutive year of losses and a subsequent fall in the share price... Read more

Greece's power utility PPC confirmed on Sunday it has received two binding bids for a 24 percent stake in power grid operator ADMIE. The terms of Greece's international bailout require PPC, which is 51 percent state-owned, to either sell its stake in ADMIE or fully privatise the grid by next year... Read more

Nintendo profit seen surging 160% on sale of Mariners stake... Read more

Ex-Thai premier fined $1bn over rice subsidy scheme. Thailand's junta has ordered former Prime Minister Yingluck Shinawatra to pay 35.7 billion baht ($1.01 billion) in compensation for a rice subsidy program that it claims has saddled the government with massive losses.... Read more

Google has agreed to co-operate with the removal of online content insulting Thailand's monarchy, the country's deputy prime minister says. Prajin Juntong said he had met Google representatives to complain about material found using the search engine and on YouTube, a Google subsidiary. Google said it was following its existing policies on content removal... Read more

Indonesia's largest pharmaceutical company, Kalbe Farma, is transforming itself from a generic drug manufacturer to a high-tech pharma developer. Its 2-year-old cancer drug factory has started reaping results, and Kalbe is now accelerating research and development of stem cell therapy products... Read more

Opinion/Analysis - Jill Treanor and Sean Farrell: 30 years after big bang, will Brexit cost City of London its status? Anniversary is tinged with anxiety as other cities vie to replace London as global financial centre... Read more

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