ASB Securities Morning Brief for Wednesday, 01 July 2015
Wednesday, 01 July 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose, led by Kathmandu Holdings after Briscoe Group flagged takeover plans. MightyRiverPower and Contact Energy advanced as investors bought defensive stocks. The S&P/NZX 50 Index rose 21.15 points, or 0.4%, to 5726.96. Within the index, 23 stocks rose, 15 fell and 12 were unchanged. Turnover was $198 million, with $58 million of that made up of Kathmandu shares... Read more

The New Zealand dollar fell as downbeat business confidence and soft building intentions stoked expectations for deeper interest rate cuts than previously thought, while the Greek debt impasse continued to sap investors' appetite for riskier assets. The kiwi fell to 68USc at 5pm in Wellington from 68.60USc at 8am and 68.33USc yesterday. The trade-weighted index declined to 71.13 from 71.69... Read more

New Zealand business confidence turned negative this month for the first time since the Christchurch earthquake in February 2011, led by a gloomy agriculture sector... Read more

Business confidence slumps in Canterbury and drops nationwide... Read more

Cricket World Cup boosted GDP. Co-hosting the Cricket World Cup boosted New Zealand's economy by $110 million, according to a new analysis... Read more

Negotiations for the Trans-Pacific Partnership will accelerate in July, with New Zealand officials working to stitch up a deal by the month's end, according to Trade Minister Tim Groser.... Read more

Economist: Why cracks in China are more worrying for NZ than Greek nightmare... Read more

Fall in Auckland building consents. Decline in new dwelling consents deals another blow to Auckland’s ongoing supply shortage... Read more

Nothing under $500,000 at Harcourts Auckland auctions... Read more

The first sizeable chunk of Pukekohe land potentially being rezoned from a Future Urban Zone to a Residential/Business/Light Industrial Zone under the Proposed Auckland Unitary Plan has been placed on the market for sale. The 4.3639 hectare site in Pukekohe’s Buckland Road - directly opposite Counties Racing Club and Pukekohe Park Raceway - is currently zoned for rural use... Read more

New “bright line” test rules clarified. Property traders and speculators, not landlords, are the target of the government’s proposed “bright line” test for tax on residential property sales.... Read more

Tiwai decision too close to call. Too close to call. That was the message coming through on Tuesday in regards to whether the owners of the Tiwai Point aluminium smelter would give notice of termination of its Meridian Energy power contract on Wednesday.... Read more

Fonterra goes on defensive in court over role in Eltham milk dumping... Read more

The Institute of Financial Advisers is taking part in "a landmark global study" to find out about consumers' attitudes to financial advice. It is taking part in a Financial Planning Standards Board (FPSB) survey which will be looking at the behaviors that motivate consumers to seek, and the barriers that prevent consumers from seeking, the advice of a financial planner... Read more

TeamTalk shares dropped 6.3 percent after the telecommunications company warned net profit will be hit by a revaluation of interest rate swaps and said it had reduced the size of its debt facility after extending the credit line for three years... Read more

Briscoes Group has bought a 19.9 per cent share in outdoor clothing retailer Kathmandu and is expected to launch a takeover bid for the whole business... Read more

Kathmandu shares soar on prospect of Rod Duke transferring some of his Briscoe 'magic'... Read more

Kathmandu investors warned to think carefully on Briscoes bid... Read more

Eastern Bay Energy Trust, the Bay of Plenty lines company, has declared its takeover of Horizon Energy unconditional after crossing the 90% threshold needed to mop up the remaining shares... Read more

Several Milford Asset Management funds are invested in beleaguered Australian law firm Slater & Gordon, whose share price dropped 25 percent yesterday after it said errors had been uncovered in the financial reporting of historical cash flow at its UK business... Read more

Blue Sky Meats, whose shares trade on the Unlisted platform, reported a 36% slide in annual profit, which it blamed on the underutilisation of its processing facilities. Net profit fell to $1.2 million in the year ended March 31, from $1.9 million a year earlier, the Southland-based company said in a statement. Blue Sky, which processes sheep, cattle, goats and deer, reported a 7.2% increase in revenue to $102.1 million... Read more

Auckland is receiving 30 per cent of a national land transport budget of $13.9 billion over the next three years. The Government's Transport Agency has this afternoon announced that the Super City - with about one third of the country's population - will receive $4.2 billion for state highways, local roads, public transport, walking, cycling and road policing... Read more

China Eastern Airlines has plans to build up to daily services on its Auckland-Shanghai service.... Read more

KordaMentha concludes receivership of Somers-Edgar's Orange Finance with $10M shortfall... Read more

Technology, more public R&D spend, 'enabling' policies needed to lift agricultural productivity: Rabobank. New Zealand needs to reverse a decline in public research and development spending, foster “enabling” policies and provide access to technology to boost productivity in the food and agribusiness sector, says a new Rabobank report. ... Read more

Foreign companies continue to buy up land in Marlborough for vineyard expansion.... Read more

Wellington Employers’ Chamber of Commerce welcomes the election of Chris Laidlaw as Greater Wellington Regional Chair.... Read more

Tower has extended chief executive David Hancock's contract by three months, keeping him on deck as the general insurer wraps up a number of business initiatives. Tower shares rose 0.5 percent to $2.17 and have gained 0.5 percent since the start of the year... Read more

Xero appoints Virgin Australia's Sankar Narayan as chief financial officer. Xero shares last traded at $18.05, and have gained 12% this year.... Read more

UDC gets new boss. ANZ's finance company has a new boss, after former CEO Tessa Price took up the role of Chief of Staff for ANZ Group chief executive Mike Smith... Read more

Earn $2000 for a handful of emails! Google launches Apps referral programme in NZ... Read more

The Commerce Commission is warning startups and small businesses to beware of an organisation called New Zealand Small Business Assistance Centre (NZSBAC) that is offering access to government grants at www.nzfundinggrants.org NZSBAC is not part of or connected to the New Zealand government, despite the website giving some people the impression that it is, the regulator says... Read more

New Zealand has a horrible history of ponzi schemers. In five of the last nine years, ponzi schemers have been banged up in jail as a result of their nefarious actions. Between 1991 to 2012, New Zealand had at least one active Ponzi schemer at work at all times, most under the old Securities Commission, which was ineffectual and was swept away to be replaced by the Financial Markets Authority (FMA)... Read more

Woman jailed over $166k McDonalds embezzlement... Read more

Former National Party candidate and Manukau city councillor Ken Yee has been struck off the roll of barristers and solicitors for misusing $600,000 of client funds. The NZ Lawyers and Conveyancers Disciplinary Tribunal says Mr Yee misused the money in two ways, resulting in misconduct clearly regarded as “disgraceful or dishonourable.”... Read more

Opinion - David Farrar: A solution to scalping?... Read more

Opinion - Greg Harris: Should NZ pay pay people to dob in the tax dodgers? There can be significant financial incentives to dob in individuals or companies suspected of dodging UK tax... Read more





Australian Headlines

Australian Market Report: Australian stocks bounced back from a shaky start in seesawing trade to close 0.67 percent higher Tuesday as bargain hunters moved in. The benchmark S&P/ASX200 index gained 36.5 points to end at 5,459.0, recovering from early falls that followed a 2.23 percent plunge on Monday as concern mounted about Greece's financial crisis... Read more

The Australian dollar has edged higher as traders practice extreme caution amid Greece's looming debt default and possible exit from the euro. The local currency was worth 76.71 US cents at 1700 AEST, up from 76.59 cents on Monday. It fell against the euro though, trading at 68.72 euro cents at 1700 AEST, down from 69.04 euro cents on Monday... Read more

Australian bond prices are weaker despite a move to safer investments as Greece edges closer to a debt default and possible exit from the euro zone... Read more

Oil, gas and childcare predicted to lead growth of Australian economy: report... Read more

Australian consumers appear to be standing aloof of the uncertainty in financial markets where global investors are fretting over a likely debt default in Greece. Consumer confidence in Australia jumped two per cent in the past week to an 18-month high, building on improving sentiment since the May budget... Read more

Joe Hockey signs up to massive Asian bank deal aimed at relieving fortunes of poor. Australia has become a founding member of the Asian Infrastructure Investment Bank, a Chinese initiative aimed at improving living standards for millions of people across the region... Read more

Property investor loans keep growing above APRA's 10pc limit. Lending to property investors is still motoring along above the 10 per cent growth ceiling the bank regulator APRA has demanded. Credit figures released by the Reserve Bank show that lending to property investors grew by 0.8 per cent in May and 10.4 per cent year-on-year... Read more

There is plenty of talk about a possible housing market apocalypse, but economists don't see it that way. They predict growth will slow, before prices stall rather than slump after a peak some time in the coming couple of years... Read more

Changes to aged care funding this week are set to give older Australians greater control of money spent to help keep them living at home. The new Consumer Directed Care program starts on July 1 and is expected to impact about 200,000 people. It removes spending decisions worth billions of dollars from home care providers and hands them to families, and follows government concerns that some providers were not doing what they should... Read more

WA lobbies for warships. WA plans to torpedo South Australia’s claim to being the nation’s warship building capital, with moves afoot to snare billions of dollars in Defence work from rust bucket States... Read more

Solar Boom Raises Doubts on Sale of Australia Power Assets. New South Wales state seeks to auction long-term lease on part of its electricity grid... Read more

Australian mining companies say they are becoming increasingly aware of hackers trying to gain access to their sensitive information, with some executives now taking extra precautions when doing business in China... Read more

LNG production is about to boom and give the economy a much needed $7.5 billion boost. The Department of Industry quarterly report released on Tuesday painted a subdued picture for most of Australia’s resource industry but LNG, mostly from Queensland, would cushion the impact of further losses from coal and iron ore.... Read more

Latin Resources raising up to $3M from entitlement issue... Read more

Aziana Limited closes in on US$2M sale of bauxite project... Read more

Shares in Strike Resources surged after Perth corporate raider Farooq Khan launched an $8 million bid for the former Peru-focused iron ore play Strike Resources. Mr Khan’s Bentley Capital says it intends to make a conditional, off-market cash bid for Strike, valuing the company at 5.5 cents a share. News of the offer sent Strike shares up 1.2 cents, or 32.43 per cent, to 4.9 cents at the close... Read more

Helix Resources has received a $470,000 tax rebate under the Federal Government’s Research and Development Tax Incentive Scheme... Read more

Kimberley Diamonds is expected to close its Ellendale diamond mine in the Kimberley and make mine workers redundant as part of a major restructure. Shares in the company last changed hands for 12 cents.... Read more

Adani's Carmichael Mine is unbankable says Queensland Treasury... Read more

Potash West appoints non-executive director... Read more

Lasalle Investment Management has acquired Big Top Market Fresh shopping centre on the Sunshine Coast. It is understood the Maroochydore shopping centre, owned by the Reed Property Group and the Kahlbetzer family, was bought for about $85 million and it will be placed in the LaSalle Australia Core Plus Fund... Read more

Slater & Gordon head hits the phones to quell investor panic. Slater & Gordon managing director Andrew Grech has hit the phones to reassure investors and analysts that the company's accounts are in order, after it shocked the market by admitting an accounting error in its cash flow statements and confirming it was the subject of an investigation from the Australian Securities and Investment Commission... Read more

ZipTel is banking on the appeal of cricketing great Brett Lee to raise the profile of its international calling app around the world. Brett Lee will be the brand ambassador for the company’s Zipt App across cricket-loving countries including Australia, India, Bangladesh, West Indies, Pakistan and South Africa. ZipTel shares were up 5.5 cents, or 7.69 per cent, to 77 cents at 3.05pm.... Read more

NBN lumped with new data sharing rules despite opposition... Read more

Taxi booking app goCatch is setting its sights on snaring corporate clients from traditional networks, with global advisory firm Ernst & Young already on board... Read more

Victoria's Labor government has cancelled plans to outsource the functions of the state's IT shared services provider CenITex following recommendations of an internal review into the state's delivery of internal services... Read more

The board of Australia Post has approved management's decision to outsource around 108 end user computing positions to Fujitsu. The organisation's plans to offload the functions of the end user computing and enterprise technology services teams to an external provider were first revealed in September last year... Read more

Billionaire Chinese internet entrepreneur Richard Liu is in talks with a global dairy company to buy a strategic stake in takeover target a2 Milk. The founder of JD.com, China's second-biggest online retailer behind Jack Ma's Alibaba, is in Australia... Read more

Coles has paid back $12 million to about 100 Australian suppliers after a review found the supermarket's buyers were "threatening" and "aggressive", former Victorian Premier Jeff Kennett says. Mr Kennett was appointed by Coles and the Australian Competition and Consumer Commission (ACCC) last year to conduct an independent review into the relationship between the supermarket giant and about 220 suppliers... Read more

Opinion - Callam Pickering: Weak business credit hints at a hard road ahead... Read more

Opinion - Michael West: Australia is getting played for a mug with tax dodging. PayPal is no pal of the Australian Tax Office. Like its sister company eBay, the electronic payments provider seems hell bent on making as little in the way of profit in this country as it possibly can... Read more

Opinion/Analysis - James Kirby: Greece: will it cost you money? (video only)... Read more





International Headlines

U.S. Market Report: U.S. stocks pared modest opening gains and were trading near the flat on Tuesday, a day after a brutal selloff erased year-to-date gains for the main indexes. The S&P 500 and Dow were on track to post monthly and quarterly losses, snapping a nine-quarter winning streak.... Read more

North/South Americas Market report: North and South American markets are mixed today. The S&P 500 is up 0.60% while the IPC gains 0.32%. The Bovespa is off 1.99%... Read more

European Market Report: European markets finished sharply lower today with shares in France leading the region. The CAC 40 is down 1.63% while London's FTSE 100 is off 1.50% and Germany's DAX is lower by 1.25%... Read more

Asian Market Report: Asian markets finished broadly higher today with shares in China leading the region. The Shanghai Composite is up 5.53% while Hong Kong's Hang Seng is up 1.09% and Japan's Nikkei 225 is up 0.63%... Read more

Oil prices were mixed in Asia Tuesday amid expectations Greece would miss a key debt repayment later in the day and edge closer to a eurozone exit, analysts said. US benchmark West Texas Intermediate (WTI) for August delivery fell four cents to $58.29 while Brent crude for August gained 10 cents to $62.11 in afternoon trade. WTI sank $1.30 and Brent lost $1.25 Monday... Read more

Gold futures on Tuesday marked a loss for the first half of the year as speculation that Greece and its creditors could strike a last-minute deal and strength in the U.S. dollar helped send the metal’s prices lower for the session. Gold for August delivery on Comex fell $7.20, or 0.6%, to settle at $1,171.80 an ounce. On Tuesday, prices tapped a low of $1,165.40 — a level prices haven’t settled at since mid-March... Read more

U.S. consumer confidence increased solidly in June, with households upbeat about the labor market, supporting views the economy was back on firmer footing after wobbling at the start of the year... Read more

The next Greece may be in the U.S. When Chicago Public Schools announced on June 24 that it would borrow $1 billion to make a $600 million-plus pension payment due June 30 an eerie feeling spread across bond investors and taxpayers alike. It was the same feeling that gripped investors when Moody’s Investors Service downgraded Chicago’s credit rating to junk based almost entirely on the city’s pension problems... Read more

The Obama administration on Tuesday unveiled details of a long-awaited proposal that would make nearly 5 million more U.S. workers eligible for overtime pay, but many businesses say it would force them to cut hours and wages... Read more

Puerto Rico poses bigger threat to U.S. investors than Greece. As U.S. investors have been panicking over a potential Greek collapse, Puerto Rico’s governor Sunday announced that the small U.S. territory cannot pay its roughly $72 billion in debt. Less than 24 hours later, Gov. Alejandro Garcia Padilla proposed a plan to seek a restructuring of the island’s debt, suggesting that the island is virtually insolvent... Read more

Puerto Rico wants to be able to declare bankruptcy... Read more

Republican Christie launches 2016 bid, promises straight talk... Read more

The University of Phoenix is shrinking in every way possible. It has lost students, employees and campuses at a breathtaking pace, and it's making much less money than it once did. The for-profit institution has shed about half of its students over the past five years, and the university has fired 900 employees since September. That works out to over 3 workers laid off every day... Read more

Bill Gross is worried about liquidity and a ‘run on the shadow banks’... Read more

Shares of Fitbit Inc. rose Tuesday, following two days of losses, after RBC Capital Markets initiated coverage of the stock with an outperform rating and a price target of $45... Read more

Greece could be biggest national default in history... Read more

Alexis Tsipras could quit as Greek prime minister if the country votes for a bailout proposal he rejected. European leaders made clear they could yet save Greece from economic chaos, but there would need to be a political earthquake in Athens first... Read more

German Chancellor Angela Merkel ruled out new negotiations with Greece until after it votes on a proposal from creditors, leaving virtually no hope left to avert a midnight default despite a plea from Athens for a last-minute bailout extension... Read more

Eurozone inflation slows to 0.2% in June... Read more

UK's economic growth revised up... Read more

A preliminary agreement to lease more than 100,000 hectares of farmland to a Chinese company has sparked heated debates in Russia. While some say the deal is a good agricultural investment in an economically depressed region, others express fears of Chinese expansion into Russia. Experts say the project has both pros and cons... Read more

Asian and Australian companies to invest in Russian Far East. The Russian authorities have set up three territories of accelerated development (TAD) in the country’s Far East, which provide a special tax regime for businesses. The government plans to launch nine such TADs. Asian and Australian investors, such as Samsung, Baomi Bitumina and JGC have expressed interest in these zones... Read more

Chinese media see international bank as diplomatic coup. The creation of the Chinese-led Asian Infrastructure Investment Bank is a bigger coup for Beijing than its hosting of the 2008 Olympics, state-run media said Tuesday after 50 countries signed its legal framework... Read more

Suzuki’s 85-Year-Old CEO Yields Some Powers to Son. Osamu Suzuki lays groundwork for family succession by giving COO post to son... Read more

Shares in Sony plunged 8.25 percent Tuesday on dilution fears after the Japanese electronics giant announced plans to raise $3.6 billion through stock and bond sales. The stock closed at 3,461.5 yen on the Tokyo Stock Exchange, down 8.25 percent from the previous day, while the benchmark index ended up 0.63 percent... Read more

How a Greek Exit From the Euro Would Affect India... Read more

An Indian court said Tuesday that Nestlé could export batches of Maggi 2-Minute Noodles made in India, but still could not sell them in the country. Sales of the wildly-popular snack were blocked across India this month after regulators said they found elevated levels of lead in some samples, an allegation the company denies... Read more

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