ASB Securities Morning Brief for Tuesday, 02 February 2016
Tuesday, 02 February 2016

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose, led by Kathmandu Holdings after the retailer reported stronger first-half sales on improved margins. Australia & New Zealand Banking Group advanced, while A2 Milk Co and Genesis Energy dropped. The S&P/NZX 50 Index increased 4.28 points, or 0.1 percent, to 6174.5. Within the index, 27 stocks rose, 13 fell and 10 were unchanged. Turnover was $99 million, as the Auckland Anniversary holiday meant trading was lighter than usual... Read more

The New Zealand dollar gained against its trans-Tasman counterpart after Chinese manufacturing gauges showed industrial production in the world's second biggest economy was still shrinking last month, and ahead of the Reserve Bank of Australia policy review tomorrow. The kiwi rose to 91.64 Australian cents at 5pm in Wellington from 91.28 cents on Friday in New York. The local currency traded at 64.75 US cents from 64.77 cents at 8am, and 64.69 cents last week... Read more

NZ migration at record high in 2015 as fewer depart for Australia, foreign students flood in... Read more

The number of visitors arriving in New Zealand continued to break records in December. The number of visitors arriving in New Zealand reached 444,900 in December, the highest-ever monthly figure. The biggest increase was in visitors from China, up 11,000 (43 per cent) from December 2014... Read more

Environment Minister Nick Smith and Housing New Zealand have joined legal proceedings in support of Auckland Council and Fletcher Building opposing a bid by community groups to only allow low-rise housing in a $1.2 billion housing redevelopmenton the disused site of the Three Kings quarry... Read more

New industry body proposed. Discussions are under way about a new professional body to represent insurers who distribute via independent financial advisers (IFAs).... Read more

Advisers told: Don't gamble on forex. Advisers are getting caught up in clients' hopes of making money trading forex and may be missing out on returns as a result, it has been claimed... Read more

Chartered Accountants research shows "massive under reporting" of business corruption... Read more

Synlait follows Open Country, Westland and Fonterra by advising a revised and sharply lower forecast milk payout for the current season. Synlait Milk has revised its forecast milk price for the 2015 / 2016 season from $5.00 per kgMS1 to $4.20 per kgMS... Read more

Fonterra governance review raises questions of foreign farmer shareholders, director skills... Read more

Apple exports are heading for a record $700 million bonanza by season's end, Pipfruit New Zealand says. Final crop estimates are in, showing a 5.5 per cent increase from last year to 19.5 million export cartons. Pipfruit NZ chief executive Alan Pollard said this should mean a jump in value from $630m last year to $700m for 2016... Read more

New Zealand honey exports soared 41 percent to a new record last year as the country benefited from demand for high-value manuka honey. The value of honey exports jumped to $285 million in 2015 from $202 million in 2014, according to the latest Statistics New Zealand data... Read more

The Marlborough wine industry is gaining prominence as a key player in New Zealand's export economy, with latest industry figures showing continued record growth. Statistics released by New Zealand Winegrowers last week showed total New Zealand wine exports for 2015 had reached a record $1.54 billion... Read more

Marlborough vineyard workers encouraged to report employment breaches... Read more

Snakk Media, which aggregates publishers' advertising space on mobile devices and matches it to advertiser demand, maintained above-target gross margins in the final three months of 2015, but warned they will probably weaken in the last quarter of its financial year... Read more

Sky TV boss John Fellet says broadcaster may be trying to do 'too much'. Sky Television has brushed off suggestions a fault with its Sky Go service shows it is losing its technical mojo. Some subscribers were left frustrated on Sunday after a fault with the Sky Go app prevented them watching three big sports events... Read more

Fletcher Building, which built the $170 million aquatic centre and stadium revamp for last year's Pacific Games in Port Moresby, says it has no issues with payments from the Papua New Guinea government and enjoys a good relationship with the tropical island nation... Read more

Wellington property magnates the Chow brothers are one step closer to listing their $200 million portfolio. John and Michael Chow received approval from the NZX on Friday for the reverse takeover of listed shell company RIS Group... Read more

Banks hire Cameron Partners to look at Paymark after potential buyer emerges... Read more

Ryman Healthcare has bought a third retirement village site in Melbourne, this time in the city's eastern suburbs. The 2.5 hectare site in Burwood East will cost $200 million to redevelop and house more than 400 residents... Read more

Kathmandu Holdings, the outdoor equipment chain that fended off a hostile takeover by Briscoe Group last year, lifted first-half profit 9.1 percent, on wider margins, and says it's on track to deliver annual profit of $30.2 million. The shares gained... Read more

Thousands of residential claims from Christchurch earthquakes still not settled... Read more

Brownlee plans to withdraw commercial zone near Christchurch airport. Land beside Canterbury earthquake cemetery site near Christchurch airport is set to stay in pony paddocks partly because of a nearby upgrade to a state highway. Canterbury Earthquake Recovery Minister, Gerry Brownlee, has proposed that 35 hectares off Russley Rd and Hawthornden Rd in Avonhead remain rural. The affected land is increasingly enclosed by houses or industrial business parks... Read more

Non-bank lender Liberty, which owns Mike Pero Mortgages, has appointed a new chief executive in New Zealand.... Read more

Christchurch Airport has appointed a new Marketing Manager. Sarah Carrick-Leslie will begin the new role for the gateway to the South Island on February 22, after more than five years as National Advertising Manager for PGG Wrightso... Read more

Jetstar's Australasian head says the air fare bonanza for New Zealanders is sustainable and will continue. Speaking after the launch of an expansion to its regional network, David Hall, Jetstar chief executive of Australia and New Zealand, said his airline's operating model and competition would keep fares low... Read more

Kiwi Regional Airlines and Auckland-based carrier Barrier Air have announced a new alliance. From February 8, Barrier Air will offer Auckland-Hamilton flights as Air New Zealand moves to drop the route... Read more

Hawaiki Cable has suffered another disappointment in its bid to build a new $500 million communications cable to New Zealand. But chief executive Remi Galasso says he won't throw in the towel. Hawaiki Cable was holding talks with New York private equity firm Stonepeak International Partners which could have provided the remaining $150m it needed for its trans-Pacific cable... Read more

The crowdfunding to raise $2 million for a beach at the top of the South Island has reached more than $700,000 worth of pledges after a week. The registered owner is Wellington businessman Michael Spackman, but he could not be contacted to offer his response... Read more

Sportswear clothing brand Line 7 is to about to relaunch the sailing clothes that made it famous. Originally a Kiwi company, Line 7's latest owner is Australian-based textiles firm Charles Parsons Group, which bought the company out of receivership in 2009. It continued to produce Line 7 clothes for casual, farming and other uses but did not own the "marine licence" until October last year... Read more

The Sydney Morning Herald has labelled Rod Drury "Netflix's most prominent pirate". The latest instalment of the Fairfax paper's "CBD" column notes (as NBR did last week) that the Xero boss has made a couple of social media comments on Netflix's crackdown against unblockers (low-cost services that let New Zealanders, and others, access the usually geo-blocked Netflix US and other offshore services that typically boast a lot more content that local streaming video-on-demand efforts)... Read more

Eftpos network restored after glitch in some parts of the country... Read more

Opinion - Gareth Vaughan: Plugging the anti-money laundering loophole should be the key plank of combating misuse of the financial service providers register... Read more

Opinion - Jenesa Jeram: 'Economic growth is in fact still good for the poor'. You may have heard last week that 62 individuals have the same wealth as the bottom half of humanity. That is, there are 62 people with the combined total wealth as the poorest 3.6 billion people in the world. As far as headline-grabbing statistics go, the numbers sure are staggering. The numbers are also woefully flawed. ... Read more

Opinion - Roger J Kerr: Roger J Kerr says high and rising inflation favour borrowers over savers and that is not what the economy needs... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket closed higher on Monday amid broad-based buying with sharp gains in healthcare stocks offsetting a mild sell-off in the dairy sector. At the 4.15pm (AEDT) official market close, the benchmark S&P/ASX200 index was up 38.1 points, or 0.76 per cent, at 5043.6, while the broader All Ordinaries index rose 37.7 points, or 0.75 per cent, to 5094.3.... Read more

The Australian dollar is lower ahead of the Reserve Bank’s interest rate decision after dipping on weak Chinese manufacturing data. At 5pm (AEDT) on Monday, the local unit was trading at US70.77c, down from US71.25c on Friday.... Read more

Inflation picking up on rising import costs, but interest rates to stay on hold... Read more

Australia's manufacturing industry has clocked up the longest period of expansion in more than five years, thanks to the weaker Australian dollar. The Australian Industry Group performance of manufacturing index remains above the 50 level separating expansion from contraction despite falling marginally in January, by 0.4 points, to 51.5... Read more

Silver lining to business gloom: D&B. Australian businesses remain pessimistic about their bottom line for 2016, but there may be a silver lining to their gloomy outlook. A "persistent lack of conviction" pervades most sectors with businesses expecting lower sales, profits and sales in the June quarter than the March quarter of 2016, according to the latest Dun & Bradstreet business expectations survey... Read more

Melbourne property prices have passed Sydney as the nation's fastest growing, although they still lagged well behind in terms of absolute cost... Read more

House prices across Perth have started the year in the red but it’s better news for people owning a unit... Read more

Jay Weatherill, already at odds with federal Labor counterparts over a GST hike, has now taken a swipe at the treasurer for not telling the truth about Australia's revenue problem. The South Australian premier says Scott Morrison is perpetrating the same deceit on the Australian people as his predecessor Joe Hockey... Read more

Federal Opposition Leader Bill Shorten has seized on a new opinion poll to counter internal pressure for him to support an increase in the Goods and Services Tax (GST). The Newspoll of more than 1,800 voters, published in today's Australian newspaper, found 54 per cent of respondents were against a higher GST... Read more

Petrol prices have hit a one-year low as the rout in global oil prices flows through to the bowser. Drivers are also benefitting from a fall in retailers' profit margins, after fuel companies came under fire late last year for charging record margins even as oil prices tumbled... Read more

The fate of the collapsed Ellendale diamond mine faces a bizarre twist, with the Department of Mines and Petroleum seeking a ruling from the Mining Warden on whether its underlying tenements still exist... Read more

Emerald Resources is gearing up to reveal details in relation to an earn in to a gold project.... Read more

Palmer companies prop up party. Companies associated with Clive Palmer poured $9.6 million into his political party, as part of a $179 million windfall for all political parties last year.... Read more

Viking Mines has banked a very handy US$2 million as part of the sale proceeds for its Akoase gold project in Ghana. Transfer of the licenses to the buyer of the West African project will commence and the $2 million proceeds are non-refundable... Read more

Carnavale Resources is heading to market with a capital raising, and the ASX has granted the company a trading halt to prepare.... Read more

Steelmaker POSCO has revealed the iron price needed for Roy Hill to break even... Read more

Shares in Saracen Mineral Holdings were firmer after the company announced commissioning of its $65 million, 2.5mtpa Thunderbox gold processing plant ahead of schedule. Shares in Saracen were up three cents, or 4.17 per cent, to 75 cents at the close.... Read more

Renaissance Minerals to reveal joint venture, raising... Read more

Woodside this morning tried to hose down investor concern of any fallout from a six-month construction delay at the $US29 billion Wheatstone LNG project, its most important growth project, declaring gas supply contracts could be met... Read more

Sundance Resources gets ready to raise... Read more

Waratah Resources shares in halt to raise funds for technology business... Read more

National Australia Bank’s plan to spin-off its UK unit has been giving the go-ahead by the Victorian Supreme Court after shareholders approved the move at a meeting in Melbourne last week... Read more

Woolworths has faced a directions hearing in the Federal Court today over claims it squeezed millions from suppliers to plug a gap in its own profits. The competition watchdog has accused Woolies of unconscionable conduct over a scheme which sought to obtain as much as $60 million in payments it had no right to from a group of 821 ‘Tier B’ suppliers... Read more

Woolworths’ foray into gourmet food emporiums on the north shore appears to have failed. The supermarket giant is closing more than half of its Thomas Dux stores across NSW, with trading ceasing at Lane Cove on February 29 and Crows Nest in April... Read more

Coles dumps Bega Cheese as supplier of its own brand cheese products for Devondale Murray Goulburn... Read more

Shares in OTOC surged after the company announced a big first-half profit upgrade. The surveying, planning and infrastructure company said this morning it expected to post first-half EBITDA of more than $8 million... Read more

Kathmandu has reaffirmed its annual profit forecast following a healthy lift in sales during the key Christmas and new year trading season. The outdoor clothing and equipment chain has released solid sales growth for the half year... Read more

The ACT government has opted for a CIMIC-led consortium over a Downer EDI alternative to build and operate a new light rail system, known as Capital Metro. CIMIC companies Pacific Partnerships and CPB Contractors are part of the Canberra Metro consortium, with the parent saying revenue to the group would be finalised at “contract execution expected in coming months”... Read more

NBN given new migration rules for service class zero premises... Read more

VDM Group has hired BGC Contracting manager Sam Diep as its new chief executive. Mr Diep replaces Dongyi Hua, who will stand down as managing director to assume a part-time role with the company as an executive director... Read more

Macquarie Group hunts for a data boss. Financial services giant Macquarie Group is looking to hire a chief data officer to help establish group-wide data management standards... Read more

Sussan Ley's attack on health premiums favours big funds, threatens non-profits... Read more

The appointment of Kate Carnell as Australia’s first Small Business and Family Enterprise Ombudsman is great news. Well done to the relevant Minister, Kelly O’Dwyer. The Council of Small Business Association of Australia (COSBOA) has been calling for an ombudsman for the sector since 1977 when the association was first formed. It seems that patience eventually pays off and Kate Carnell is a great selection as the very first person in the position... Read more

A new report explores the benefits of Uber. Australians can save 800,000 hours a year just by catching an Uber instead of a taxi... Read more

Russian oligarch Vladimir Iorich's investment house Pala Investments has had $116 million worth of Australian shares frozen at the request of the Australian Taxation Office's Project Wickenby team. Swiss-based Pala Investments, which in 2013 grabbed headlines in Australia after accusing former NSW premier Nick Greiner of bid-rigging while he was chairman of Bradken Resources, is in the sights of the ATO over a $34 million disputed tax bill... Read more

Opinion - Michael Pascoe: The RBA cut we're still waiting for... Read more

Opinion - Robert Carling: The problem with tax swaps. Mike Baird wasn’t to know, but reports of the latest version of his plan for a 15 per cent GST coincided with the release of a Newspoll showing a majority opposed to such a GST increase, even if accompanied by offsetting income tax cuts... Read more

International Headlines

U.S. Market Report: U.S. stocks retreated, joining a selloff in risk assets from commodities to global equities after data showing worsening Chinese manufacturing rekindled concern that a slowdown there will spread. The Standard & Poor’s 500 Index retreated after its biggest one-day gain in four months. European shares ended lower after paring losses of more than 1 percent, while emerging-market equities were little changed... Read more

North/South Americas Market Report: North and South American markets are mixed. The IPC is higher by 2.92%, while the S&P 500 is leading the Bovespa lower. They are down 0.63% and 0.56% respectively... Read more

European Market Report: European markets finished lower today with shares in France leading the region. The CAC 40 is down 0.56% while Germany's DAX is off 0.41% and London's FTSE 100 is lower by 0.39%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 1.98%, while the Shanghai Composite led the Hang Seng lower. They fell 1.78% and 0.45% respectively... Read more

Gold climbs toward a 3-month high... Read more

U.S. factory activity edges up; momentum remains weak... Read more

Ouch. 93% of investors lost money in January... Read more

U.S. consumers are cautious about spending their windfall from cheap gasoline and are saving more, according to a Reuters/Ipsos poll and official data, suggesting low oil prices are less of a boon for the U.S. economy than in the past. Commerce Department data shows that the crude's 70 percent drop since mid-2014 cut households' annual spending on gasoline and other energy products by $115 billion, equivalent to roughly 0.5 percent of gross domestic product... Read more

The Window to Buy Stocks Has Shut for Now: JPMorgan... Read more

Twitter surges on yet another takeover rumour. Does Twitter's only hope lie with a #takeover? Wall Street seems to think so. The stock surged nearly 10% Monday following a report on tech news site The Information suggesting that venture capitalist Marc Andreessen -- a prolific tweeter -- may want to team up with private equity firm Silver Lake on a deal to buy Twitter... Read more

Shares of Lumber Liquidators Inc. soared 10% in midday trade Monday, after the wood-flooring company was sentenced for importing illegal wood. The stock has now run up 22% since Jan. 19, when it closed at the lowest level seen since March 25, 2009, but was still down 77% over the past year... Read more

Sanofi, One of Least Efficient Drugmakers, May Cut Jobs: Chart... Read more

More Dark Pool Investigations Under Way, Says New York's Top Cop. Additional actions are likely against private trading venues run by some of Wall Street’s biggest banks, the nation’s top securities regulator and New York state’s attorney general said today as they announced record settlements with two global banks over their so-called dark pools... Read more

Rolls-Royce has announced a $2.7bn (£1.9bn) order to manufacture and service Boeing 787 Dreamliner engines for the airline, Norwegian. It will provide its Trent 1000 engines for 19 new Dreamliners... Read more

UK manufacturing achieves growth but exports fall... Read more

Barclays and Credit Suisse have agreed to pay tens of millions of dollars each to settle charges that their so called "dark pool" trading platforms gave unfair advantage to high-speed traders who used them. The settlement was reached with New York Attorney General Eric Schneiderman and the Securities and Exchange Commission. Barclays agreed to pay $70 million, which Schneiderman said is the largest penalty ever levied on a dark pool operator... Read more

Premier Oil's shares nearly doubled in value on Monday after trading was restarted following a suspension triggered by a major North Sea deal. Premier had suspended its shares on 13 January after agreeing to buy E.On's North Sea assets for a net $120m (£84m) plus working capital adjustments... Read more

Chemist chain Boots has announced that it is cutting between 300 and 350 jobs in the UK. The cuts will fall among assistant store managers in its larger stores... Read more

French car giant Renault opened its first car factory in China on Monday, the last major manufacturer to set up a plant in the country as it looks to tap into the world's biggest auto market. The factory in Wuhan, a carmaking hub in the central province of Hubei, is a joint venture with Chinese manufacturer Dongfeng and will be able to produce 150,000 vehicles a year at full capacity... Read more

Russian ruble, Turkish lira decline as tensions escalate... Read more

President Vladimir Putin said that only investors based in Russia can buy stakes in state companies that may be privatized. Buyers won’t be able to finance deals with loans from state-run banks, Putin said at a Kremlin meeting on Monday to discuss privatization with the heads of state companies including Rosneft OJSC, VTB Bank PJSC, Aeroflot PJSC, Alrosa PAO, Bashneft PAO and Russian Railways JSC... Read more

Chinese authorities have arrested more than 20 suspects who are accused of involvement in a massive Ponzi scheme that allegedly swindled hundreds of thousands people out of billions of dollars. The arrests reported Monday by state media relate to E-zubao, a peer-to-peer lending platform that promised investors attractive returns of as much as 15% when it launched a year and a half ago... Read more

Toyota to halt Japan production for a week after blast at supplier... Read more

India Still Has Big Corruption Problems, Says Transparency International... Read more

The explosive spread of Zika virus across the Americas could turn out to be a major speed bump for Tata Motors. The Indian automaker will this week unveil its latest hatchback -- the Zica -- a name that calls to mind the mosquito-borne virus that has rocketed to the top of the global public health agenda... Read more

Another day, another oil producer in trouble. Nigeria is considering asking the World Bank, the African Development Bank and other international organizations for help to plug a hole in this year's budget created by the collapse in crude oil prices. The government said it is looking to borrow as much as $9 billion to fund its cash-starved economy... Read more

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