ASB Securities Morning Brief for Thursday, 30 July 2015
Thursday, 30 July 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose as a decline in the currency and the promise of lower interest rates boosted sentiment for equities. Meridian Energy led the market higher, as Fisher & Paykel Healthcare rose to a record. The S&P/NZX 50 Index advanced 22.37 points, or 0.4%, to 5870.76. Within the index, 28 stocks rose, 15 fell and seven were unchanged. Turnover was $111 million... Read more

The New Zealand dollar rose above 67 US cents after Reserve Bank governor Graeme Wheeler said while some easing in monetary policy is likely the economy isn't so weak as to need substantial new stimulus. The kiwi dollar traded at 66.98 US cents as at 5pm in Wellington, having earlier gained to as high as 67.38 cents, from 66.61 cents late yesterday. The trade-weighted index rose to 71.31 from 70.90... Read more

TPP talks stumbling on dairy hurdle... Read more

The Reserve Bank has confirmed that further OCR cuts are likely to be needed. Further monetary policy easing and exchange rate depreciation are required for the good of economy, Reserve Bank governor Graeme Wheeler said in a speech in Tauranga this morning... Read more

Exchange rate still too high - Wheeler... Read more

Kiwi women earn on average $608,000 less than men over their lifetime, research shows... Read more

Investor demand set to slow in Auckland. Looming policy measures will slow investor demand in Auckland, but marked supply and demand shifts are necessary to rebalance the market, according to one major bank.... Read more

An "unprecedented" level of building work is predicted over the coming six years, due largely to Auckland's housing boom, a new reports says. Building and Housing Minister Nick Smith heralded the latest National Construction Pipeline Report as confirming the nation is "building more than we have ever before" with $209.4 billion of work projected over the next six years, peaking in 2016 at $36.5 billion of work... Read more

Westpac matches BNZ at 4.69%... Read more

Westland will decide on its final 2014/15 payout in September. Westland Milk Products, New Zealand's second-largest dairy co-operative, cut its forecast milk payout to farmers by 10c for the current season and by $1 for next season, in the face of sustained weakness in global dairy prices... Read more

Farm nutrient co-operative Ballance Agri-Nutrients has fast-tracked its 2014/15 rebate and dividend payment to get much-needed cash to farmers early. On 31 July, the co-operative will begin its distribution of an average $60 per tonne, seven weeks ahead of its normal payment schedule... Read more

Investors go through nine market cycles throughout their lifetime, Russell research shows... Read more

Virgin Australia has narrowed its full-year loss but will still have an impact on major shareholder Air New Zealand. The New Zealand airline holds a 25.9 per cent stake in Virgin and it is set to bear its share - $13 million - of the A$49 million ($53.5 million) loss the Australian carrier suffered over the past year... Read more

Green Cross declares 15c special dividend after reviewing capital structure... Read more

SkyCity Entertainment Group, the listed hotel and casino operator, will face a smaller than expected increase in operating costs after Australia's Northern Territory government completed its review of the state's gaming taxes. The Auckland-based company estimates a new 10-year community benefit levy will add an extra $1 million in operating costs to SkyCity, it said... Read more

Affinity Equity Partners, the pan-Asian private equity firm, has approached a number of investment banks as it looks to sell New Zealand's largest poultry business, Tegel Foods. Investment bankers have confirmed to BusinessDesk that Affinity is considering a trade sale or initial public offering of the Auckland based poultry business... Read more

Ike GPS, the laser measurement tool developer, is mulling a US listing but is first looking for a cornerstone shareholder from its major market. The US-based company told shareholders at today's annual meeting in Wellington that it's actively seeking US investors and didn’t rule out a possible secondary listing there... Read more

Ryman Healthcare, New Zealand's largest retirement village operator, plans to increase resident numbers by 70 per cent in the next five years in New Zealand and Australia as it also mulls an ASX listing.... Read more

Mainfreight throws weight behind KiwiRail, laments lack of national transport strategy. Mainfreight chairman Bruce Plested has criticised what he says is the government's lack of a national transport plan, throwing his support behind state-owned rail operator KiwiRail and calling it an integral part of the infrastructure... Read more

The specialist medical investor Abano Healthcare lifted underlying earnings 46 per cent and paid a fatter dividend, underpinned by its dental and audiology businesses. The Auckland-based company posted a net loss after minority interests of $1.3 million in the 12 months ended May 31, compared with a profit of $4.5 million a year earlier, it said... Read more

Coats Group, the company that grew out of diversified investor Guinness Peat Group, says the sale of its EMEA Crafts business to Aurelius Group will be completed tomorrow although the loss on sale won't be announced until its first-half results, due on August 3.... Read more

RFAs backing call for one law for all. The PAA wants one set of standards for all financial advisers - but it says it has the backing of its RFA members.... Read more

The man at the helm of the country's largest angel investor network says an overwhelming response to the organisation's annual intern take led him to wonder if there was a better way of nurturing the influx of aspiring entrepreneurs. Ice Angels chief executive Robbie Paul, 29, said he was overwhelmed by the quality and quantity of the response... Read more

SBS has appointed Dunedin-based lawyer Anne McLeod to its board of directors.... Read more

Meridian's poverty project up for awards. Meridian Energy has joined with children's charity KidsCan to raise awareness of child poverty in New Zealand and help to provide food, clothing and basic healthcare... Read more

The Champion Canterbury Business Awards 2015 have attracted a record 196 entries, 21 per cent more than the last record year of 2012. Last night 48 businesses were named finalists in the prestigious business awards that showcase the region's business talent, innovation and diversity... Read more

Concern about industry skill shortages in light of growth in construction activity. Certified Builders welcomes the latest National Construction Pipeline report which shows continued growth in demand for building and construction in New Zealand. While this is encouraging for the industry, a broader concern is the shortfall in skilled tradespeople and commensurate risks for building quality... Read more

At a press conference in Auckland, Colin Craig has announced defamation actions against Whaleoil blogger Cameron Slater, Taxpayers' Union executive director Jordan Williams and Conservative Party board member John Stringer. Mr Craig says he will seek $300,000 in damages against Mr Williams, $600,000 from Mr Stringer and $650,000 from Mr Slater – who he collectively labelled "the dirty politics brigade."... Read more

A High Court decision has cleared the way for a liquidator to sue the directors and auditors of the main vehicle for Christchurch bankrupt David Henderson's property exploits. Accountancy firm PricewaterhouseCoopers (PwC) – the auditors of Property Ventures Ltd (PVL), which went into liquidation in July, 2010 owing about $70m – tried to stop the action by liquidator Robert Walker and other plaintiffs. It argued the proceedings, begun in 2012, were an abuse of process and against public policy... Read more

Opinion - Fran O'Sullivan: All options should be on the table at Fonterra. Inherent contradictions in structure will again test the board on ‘Black Friday’... Read more

New Zealand Herald Editorial: Landlord tax belies PM's housing claim... Read more

Opinion - Pattrick Smellie: Health and safety reform: it ain’t over till it’s over... Read more

Australian Headlines

Australian Market Report: Australian stocks pushed to catch up with gains in global equity markets today as stability appeared to return to hard-hit Chinese shares, encouraging a recovery in commodity prices. At the 4.15pm (AEST) official market close, the benchmark S & P/ASX200 was up 39.5 points, or 0.71 per cent, to 5624.2, while the broader All Ordinaries index rose 38.6 points, or 0.69 per cent, to 5609.6.... Read more

The Australian dollar is slightly higher today on the back of an improved performance by Asian and Australian stockmarkets. At 5pm, the local unit was trading at US73.21c, up from US73.15c yesterday. During the day it peaked at US73.51c, its highest level since Friday of last week. FxPro chief economist Simon Smith said market sentiment had improved for a second day, which had boosted the Aussie dollar... Read more

Prime Minister Tony Abbott will use a speech to the finance community to attack Labor for its opposition to his government's free trade agreement with China, describing it as "xenophobic short-term politics". Mr Abbott believes the FTA with Australia's number one trading partner is as vital to the country's long term prosperity as the floating of the Australian dollar and the deregulation of the banking sector in 1980s... Read more

AMP Bank has stopped lending to investors as mortgage brokers warn interest rate hikes for landlords could lock out first-time buyers but lead to further discounts for owner occupiers. AMP Bank has hiked rates on its existing loans to landlords by 47 basis points, the biggest and latest lift by a lender as the industry moves to arrest growth in investment lending... Read more

netwealth posts record year of growth & launches first private label managed account. Australia’s largest non-institutional platform, netwealth, has reported their largest year of growth on record increasing Funds Under Management (FUM) by $1.96b for the last Financial year, with current FUM at $7.6b, at the same time as announcing the launch of their first Private Label Managed Account with GPS Wealth... Read more

Wages are climbing at their slowest pace this century, yet few Australians seem concerned. Now the Bureau of Statistics has cast light on why. If the official wage increase figure of 2.3 per cent is low, it towers above the increase in the cost of living... Read more

Women's advocacy groups and the superannuation industry are backing ANZ's move to top up super contributions for some female staff, but say more needs to be done to address the gender financial gap. The banking giant will provide top-up superannuation contributions of $500 a year for female staff with less than $50,000 in their super funds in an attempt to reduce the gap in retirement savings between men and women... Read more

High frequency share trading, which favours “predatory strategies that queue jump institutional and retail investors”, is having a toxic effect on Australia financial markets, according to researchers at the University of Sydney Business School.... Read more

RNI NL has been granted a trading halt by the ASX pending details regarding an offer for the company's gold assets and the implication of this on its current entitlement issue... Read more

Oil and gas producer Beach Energy expects oil and gas production to fall in the 2016 financial year as the company cuts exploration drilling activity. The central Australia Cooper Basin producer said output would be lower than expected in full year 2016, forecasting a range of between 7.8 to 8.6 MMboe amid reduced drilling activity and a natural field decline. Shares in the company closed up one cent, or 1.1 per cent, at 92 cents.... Read more

Shares in Turkey-focused gold miner Alacer Gold have gained more than 6 per cent amid renewed takeover speculation. Alacer, which operates the Copler Gold mine in eastern Turkey, released its quarterly results this week, revealing production costs had fallen in its second quarter to $US20.8 million ($28.35 million), from $US22.6 million in the previous three months... Read more

Gulf Manganese Corporation is progressing its planned ferromanganese smelter in Timor with EBITDA of US$ 374.7 million, NPV of US$160.6 million and start-up capital investment of US$66 million staged over five years. The company is now in an ASX trading halt regarding a proposed capital raising.... Read more

The world’s largest private coal miner, Peabody Energy, will sack 300 of its Australian workers, slash more than $700 million from the value of its Australian coal assets and cut production.... Read more

Woodside Petroleum’s drive to cut its cost base is set to claim a further 30 jobs in its Perth head office following a sweeping review of finance and procurement functions... Read more

Cardno CFO Graham Yerbury takes job at Senex ahead of $150m loss... Read more

Axiom Mining strengthens board and management with key appointments... Read more

Rinehart offers guilty plea on report charges. Three of Gina Rinehart's privately held mining companies have offered to plead guilty to breaches of the Corporations Act stemming from failure to lodge annual financial reports between 2008 and 2012... Read more

Australian profile marketing firm Pureprofile has made a flat listing on the ASX, as it announced an oversubscribed capital raise of $12.1 million and international expansion plans. Shares in the company, which pays consumers to take part in surveys then sells the results, hit the boards at 54 cents when they started trading at 1100 AEST, before falling to 51 cents at 1238 AEST. That’s slightly better than the 50 cents investors paid during the company’s $12.1 million initial public offering of 24 million shares.... Read more

Shares in MedLab Clinical have surged after the nutritional pharmaceutical company announced it had won NSW government approval to conduct medicinal cannabis research. Medlab today said the Baird government had granted it a research licence for the use of cannabis for therapeutic purposes, such as pain relief... Read more

Australian farmers have more money stashed away in special savings accounts designed exclusively for farmers, more than $4.6 billion, than ever before. The cash reserves are an important buffer against drought, failed crops and other bad times. They are also a crucial savings base for farmers with plans to expand or invest in new infrastructure, machinery or stock... Read more

National Australia Bank will allocate $50 million over three years into a new ventures fund that will seek to tap into innovative ideas and capabilities around the world. NAB today said its new Ventures fund - part of its NAB Labs innovation function - would make investments in and enter into partnerships with "innovative" companies both in Australian and overseas... Read more

Programmed Maintenance Services expects the scale it gains through its takeover of Skilled Group will outweigh the impact of declining mining investment. Programmed shares were three cents lower at $2.42 at 1530 AEST... Read more

Virgin Australia is on the cusp of returning to profitability after lower fuel prices and improved market conditions saw it rein in its full year loss. The airline is yet to release its full year results, but figures included in its latest quarterly update show it made a net loss of $93.8 million in 2014/15, which is a $260 million improvement on last year's result. Virgin Australia shares were flat at 44.5 cents as of 1400 AEST.... Read more

Myer is dumping 100 brands to make way for new ones, including Calvin Klein White Label. The department store chain declined to name which labels it will be dropping but said the cull was happening across women's and men's apparel, children's wear, homewares and footwear... Read more

Omnichannel guru sought as retailer continues business review. Department store giant Myer has commenced a search for a chief digital and data officer to replace the vacant CIO role it created only 12 months ago.... Read more

Opinion - Greg Jericho: Start adjusting: lower growth might be the 'new normal'. Everyone from the public to the budget makers seem to be waiting for growth to return to pre-GFC levels, but what if that doesn't happen? It would take a lot of adjusting to live with this "new normal",... Read more

Opinion - Ian Verrander: Hockey needs to redo his growth numbers - pronto... Read more

International Headlines

North/South Americas Market Report: North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 2.39% while U.S.'s S&P 500 is up 0.63% and Mexico's IPC is up 0.51%... Read more

European Market Report: European markets finished broadly higher today with shares in London leading the region. The FTSE 100 is up 1.16% while France's CAC 40 is up 0.81% and Germany's DAX is up 0.34%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 3.44% and the Hang Seng rose 0.47%. The Nikkei 225 lost 0.13%... Read more

Oil prices were down in Asia Wednesday as investors awaited the result of a US central bank meeting and a closely-watched report on crude inventories in the world's biggest economy. Worries over the Chinese economy after a rout in the country's stock market and a global crude oversupply were also keeping buyers at bay, analysts said. US benchmark West Texas Intermediate for September delivery fell 14 cents to $47.84 and Brent crude for September gave up 13 cents to $53.17 a barrel in afternoon trade.... Read more

Some U.S. senators want to start oil war with Iran... Read more

Fed Indicates It Is Close to Raising Interest Rates as Labor Market Tightens... Read more

Twitter's shares plunge as honesty fails to pay off. Twitter's openness about the difficulty it is having attracting new users has failed to pay off with investors. In shareholders' first chance to react to Tuesday night's results, the stock plunged more than 13% to $31.58 in early trading, wiping an estimated $3bn off the microblogging firm's value.... Read more

Alexis Tsipras vows not to be 'blackmailed' by Syriza rebels as threat of snap election looms. Prime minister says he is ready to dissolve his disunited government as the IMF urges him to take control of the country's controversial reforms... Read more

Smoking is not cool. But cigarette stocks are hot.... Read more

Disneyland Paris is facing a pricing probe following accusations that UK and German customers are being frozen out of certain price promotions. The Financial Times said people in the UK were paying 15% more for one day tickets. The European Commission told the BBC that it had "received a number of complaints" from customers... Read more

Libor-style scandals could happen again as banks are failing to reform, says FCA. No bank or brokerage has taken enough action to enforce good behaviour, the Financial Conduct Authority says... Read more

Barclays profits climb as investment bank makes surprise lurch to health. The bank says pre-tax profits rose to £3.1bn in the six months to the end of June... Read more

VW reports profit rise but warns of 'challenges' ahead... Read more

Lending to UK homebuyers increased in June by the largest amount in seven years and new mortgage approvals rose, signs that activity in the housing market is picking up... Read more

British drugmaker GlaxoSmithKline has posted slumping quarterly earnings, hit partly by lower profit margins for vaccines acquired under an asset swap deal with Swiss peer Novartis. Earnings after taxation tumbled 77 per cent in the three months to June, compared with a year earlier, GSK said in a results statement. Turnover grew 7 per cent... Read more

The road ahead for Thai-Russian trade relations. Economic ties between the countries have been on the upswing for a while. There is already an agreement for Russia to supply Sukhoi Superjet-100 (SSJ-100) civil aircraft, while KamAZ has successfully entered the Southeast Asian market. Thai business are involved in major agricultural projects in Russia. However, bilateral trade still lags behind potential... Read more

Russia tries to halt rouble slide as economic crisis returns to haunt Vladimir Putin. Russia’s central bank halts daily purchases of foreign currency after the rouble hits 60 to the dollar... Read more

Vladivostok may get a diamond exchange... Read more

Chinese shares end three-day losing streak... Read more

China has a major bubble problem. Buy property! No, wait -- buy stocks! OK, back to property! China has a problem: Its citizens are among the best savers in the world, but they don't have enough places to stick their money -- a reality that's contributing to the formation of asset bubbles... Read more

Japanese video game giant Nintendo beat expectations to swing to a net profit in its fiscal first quarter of this year. Its net profit was 8.28bn yen ($67m; £43m) in the three months to June as sales in the quarter rose over 20%. That compares to a net loss of 9.9bn yen in the same period a year ago... Read more

Toshiba's interim CEO to take 90% pay cut... Read more

GIFT, the Indian Smart City That Would Cost $23,500 a Person... Read more

The Counterview: Why Britain Doesn’t Owe India Reparations. A video of Shashi Tharoor’s arguments during a recent Oxford Union debate on whether Britain owes reparations to its former colonies has gripped India in the past few days... Read more

Opinion/Analysis - Nafis Alam: Shadow play: how China's unregulated banks feed its boom and bust economy... Read more

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