ASB Securities Morning Brief for Thursday, 26 November 2015
Thursday, 26 November 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares fell, driving the NZX 50 Index down from a record high, as investors cashed in recent gains in a2 Milk Co, which was cut to 'underperform' by an analyst, and companies including Xero. The S&P/NZX 50 dropped 32.13 points, or 0.5 percent, to 6,069.14. Within the index, 29 stocks fell, 15 rose and six were unchanged. Turnover was $189 million... Read more

The New Zealand dollar gained as dairy futures indicated global dairy prices may have found a base, easing pressure on the Reserve Bank to cut interest rates in response to a slump in the country's biggest export. The kiwi rose to 65.78 US cents at 5pm in Wellington from 65.34 cents at 8am and 65.24 cents yesterday. The trade-weighted index advanced to 71.30 from 71.02 yesterday... Read more

Beef jerky, fresh berries, chocolate, beer and cider are areas of emerging growth in New Zealand's food and beverage exports. While dairy products, lamb, kiwifruit and apples remain strong export products for New Zealand, growth in different food and beverage areas has been highlighted in the industry's latest report... Read more

Retailers are hoping for an even better Christmas shopping season than last year's record-breaker, despite the ogre of rising unemployment. Shoppers spent a total of $16.25 billion between October and December last year. Retail NZ public affairs manager Greg Harford said sales this year were expected to hit at least $17.1b. Retailers' optimism was based partly on strong sales this year, which were up 5.7 per cent in the year to September.... Read more

The Government has sent a clear signal that arrangements put in place to ease the impact of the New Zealand Emissions Trading Scheme (ETS) on certain sectors during the Global Financial Crisis could be scrapped as early as next year... Read more

The Co-operative Bank has reduced its 3 year and 4 year mortgage rates to 4.75% and 4.89% respectively. These adjustments continue to keep all Co-op Bank fixed home loan rates below 5% mark. Chief Executive Bruce McLachlan said that the decision to lower the three and four year fixed mortgage rates is in response to more customers looking for low longer term rates, with many Co-operative Bank customers securing the 5 year rate at 4.99%... Read more

Tropical holiday mortgage incentive offer from Kiwibank 'very successful' in attracting business... Read more

Housing investors borrowed over half a billion dollars less in October than in the previous month... Read more

London house prices 'have nothing on Auckland'... Read more

Auckland builders desperate for workers. Auckland builders are recruiting foreigners to beat a desperate shortage of skilled labour which threatens to undermine house-building targets in the city's housing accord... Read more

New Zealand housing is over-valued and facing a downturn, warns a new report... Read more

First NZ analysts see 'increased risk of sharp correction'; suggest prices may fall by about 11% in next two-and-a-half years... Read more

New housing barely dents shortage. Auckland housing announcements keep coming but it is unlikely they will rectify the shortage... Read more

MBIE outlines preferred options for Financial Advisers Act overhaul... Read more

Commissions report gets no traction with MBIE. The contentious Melville Jessup Weaver report into insurance adviser remuneration structures might have been an expensive waste of money.... Read more

New group may replace FSC. Work is under way to form a new industry body that would represent life insurers who distribute product via advisers... Read more

RFA standards set to lift. An options paper that will guide the review of the Financial Advisers Act has been released. It seems virtually certain that RFAs can expect their regulatory obligations to increase - although a ban or restriction on commissions is not a "preferred option"... Read more

Fonterra targets doubling of China revenue within five years, Spierings says... Read more

Fonterra says 2016 forecast milk payout tied to recovery in dairy prices next year... Read more

Fonterra's board and top management faced a tetchy reception at yesterday's annual meeting in Waitoa from shareholders looking at the prospect of two straight years of low milk prices. The most animated discussion came around the remit aimed at cutting the size of the board from 13 to nine... Read more

At Fonterra's annual meeting Colin Armer and Greg Gent, both ex-directors, urged shareholders to vote in favour of Resolution 11 - cutting the co-op's number of directors from 13 to 9. Having a smaller board would make it "hard to be a passenger" and "those who are out of their depth" will leave, Mr Gent argued... Read more

Fonterra shareholders evenly split on shrinking board... Read more

A2 Milk cut to underperform at First NZ as brokerage awaits proof Australian success can be replicated... Read more

Trilogy more than triples first-half profit; shares rise to record high.... Read more

The booming property market has meant a 6%+ increase in earnings for National Property Trust (NPT). In its 2016 interim results, the NZX-listed property company said it had a trading profit of $3.315 million for the six months to 30 September 2015. This was a 6.05% increase on the same period in 2014... Read more

Orion Health first-half loss widens in line with expectations as revenue climbs 26%, bolstered by weak kiwi. The stock last traded at $3.78, and have dropped 36 percent this year. ... Read more

Wilson Parking New Zealand, owned by Hong Kong's Kwok family, more than doubled annual profit as it reaped more revenue from an expanding security business. Net profit rose to $6 million in year ended June 30, from $2.7 million a year earlier, Auckland-based Wilson's annual report shows. Revenue jumped 62 per cent to $130.5 million, driven by sales from its recently acquired security business... Read more

Queenstown’s international visitor spend surges 25% in 2015... Read more

After canning its Queenstown service Kiwi Regional Airlines is now tossing up flights to Napier or Tauranga. Kiwi Regional Airlines chief executive Ewan Wilson said it would announce a new destination in its network in early December with flights due to begin in late February... Read more

The independent directors of King Country Energy are urging the company's 6000 independent shareholders to reject Trustpower's two-tier takeover offer, saying the whole offer should be pitched at $5 a share irrespective of uptake. Trustpower is pitching its offer at $4.78 per share for acceptances between 50.1% and 70.2% of KCE's shares, and at $5 per share if more than 70.2% accept, excluding any acceptances received from the King Country Electric Power Trust, which holds 19.98% of KCE's shares and has already indicated it will not be participating in the offer... Read more

Smartpay first half profit slumps 90%... Read more

ERoad driven by Australasian gains amid slow US growth... Read more

Hallenstein Glasson Holdings, the clothing retailer, said margins continued to erode in the first 16 weeks of the year in the face of "intense competition" and the impact of weaker Australian and New Zealand dollars. Hallenstein shares last traded at $3.79 and have gained 21 percent this year.... Read more

UDC Finance had an 11% gain in full-year profit that the finance company attributed to lending growth, including stronger motor vehicle credit. Profit rose to $57.1 million in the 12 months ended September 30, from $43 million a year earlier, the Auckland-based, ANZ Bank New Zealand-owned lender said in a statement. Revenue rose 6% to $122 million... Read more

Southern Cross tackles fraud. Southern Cross has launched a phone line for people to dob in those they suspect of insurance fraud, but it says it does not have any concerns about advisers... Read more

Green Cross Health, the primary healthcare group formerly known as PharmacyBrands, posted a 20% gain in first-half profit on increased returns from its Life Pharmacy and Unichem pharmacy chains and a contribution from its community health businesses. Profit was $8.3 million in the six months ended September 30, from $6.9 million a year earlier, the Auckland-based company said in a statement. Sales jumped 58% to $213 million and included a contribution from its newly acquired community health services... Read more

Air New Zealand chairman Tony Carter has been named the 2015 winner of the Shareholders Association's Beacon Award.... Read more

The Indian Government has approved the signing of a revised Air Services Agreement between India and New Zealand, according to a Government media release last week. India’s Cabinet Committee on Economic Affairs, headed by Prime Minister Narendra Modi, approved the signing on November 18 in the Indian capital New Delhi... Read more

Business and political leaders are singing the praises of Wellington Airport's proposed runway extension, but taxpayer funding is still very much up in the air – if the Government's tweets are anything to go by. Wellington Airport released more than 20 reports on Wednesday that outline its case for spending $300 million to add 354 metres of tarmac to the runway's southern end... Read more

Wellington Airport sees $2 billion net benefit in longer runway... Read more

New Zealand Windfarms says it is getting on top of the range of failures that have hampered operation of the Tararua Ranges windfarm near Palmerston North, which listed on the NZX four years ago and has reached a conditional settlement with its turbine supplier... Read more

Auckland mall space 'explodes' as new retailers demand more space... Read more

Locals unite to fight Unitec. Plans to turn a sprawling Auckland campus into suburban real estate are running into stiff local opposition. Home-owners near Unitec's 53ha Mt Albert/Pt Chevalier site have started fundraising to hire a traffic engineer and other experts to fight a $250 million project which could create 1400 new residences... Read more

Matt Bowden's Stargate Operations owes more than $1.4m to creditors... Read more

Animal rights activists will demonstrate outside the Environment Court in Auckland tomorrow morning to protest the establishment of a caged hen operation at Pukekohe. Craddock Farms is taking an Environment Court appeal which will be heard at the Federal Court hearing rooms... Read more

A former Financial Markets Authority analyst who allegedly forged his academic record is now accused of providing a forged employment contract with Fonterra to rent a downtown Auckland apartment. At least nine further charges have been laid against Benjamin Anthony Kiro, who spent last night in custody... Read more

The Employment Relations Authority (ERA) has ordered Taste of Egypt Ltd to pay more than $91,000 for employment law breaches and arrears owed to workers employed in their Nelson restaurant. The Ministry of Business, Innovation and Employment’s Labour Inspectorate brought the case before the ERA after receiving a complaint from a member of the public concerned about the treatment of staff and their work conditions... Read more

Opinion - Terry Baucher: Terry Baucher is surprised by recent IRD behaviour, suggests debate and Parliament legislating is appropriate for some of it... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket has dipped amid rising tensions in the Middle East, with broadbased declines slightly offset by a buoyant energy sector. At the 4.15pm (AEDT) official market close, the benchmark S & P/ASX200 index was down 32.7 points, or 0.63 per cent, at 5193.7, while the broader All Ordinaries index had fallen 31.8 points, or 0.6 per cent, at 5245.2.... Read more

The Australian dollar has risen on a weaker US dollar and on the back of the Reserve Bank governor’s hints that there may not be another rate cut in 2015. At 4pm (AEDT), the local unit was trading at US72.65 cents, up from US72.02 cents yesterday... Read more

The Australian dollar has hit a one-month high supported by strong commodity prices and a stable interest rate outlook. At 5pm (AEDT) on Wednesday, the local unit was trading at US72.72 cents, up from 72.02 cents on Tuesday... Read more

Shoppers likely to fork out $35 billion in the lead-up to Christmas... Read more

Stevens Says `Chill Out' on Rates as Australia Bows to Slowdown... Read more

Housing construction has hit an all-time high, a sign that the sector will soon become the biggest driver of economic growth in Australia. The value of residential work done during the September quarter rose two per cent to a record $15.5 billion thanks to a boom in apartments, the Australian Bureau of Statistics found... Read more

The People's Bank of China has named the first group of foreign central banks to be allowed to trade in the country's foreign exchange market. The group includes the Hong Kong Monetary Authority, the Reserve Bank of Australia and the National Bank of Hungary, the PBOC said in a statement on its website. The International Bank for Reconstruction and Development, the International Development Association, the World Bank Group Trust Fund and GIC Private are also being allowed to trade in the market, China's central bank said... Read more

Prime Minister Malcolm Turnbull has warned states and territories that meaningful reform on health and education funding will require their full and genuine involvement on both structural and funding issues. Speaking to business leaders, he said all Australia's governments needed to work together to get their own houses in order... Read more

A former investment banker turned climate change adviser says the world risks building trillions of dollars worth of uneconomic fossil fuel projects over the next 10 years because of measures to limit global warming. Research analyst Mark Fulton is the lead author of a report by London based environmental think tank Carbon Tracker, which has warned there are $US2.2 trillion in potentially unviable coal, gas and oil projects around the globe... Read more

Iron ore dives to near-decade low... Read more

Elemental Minerals has been granted additional time by the ASX to outline details of a material recapitalisation of the company. Elemental said that it is anticipated an announcement updating the market will be made on or before 27 November 2015... Read more

Gina Rinehart’s Hancock Prospecting paid out $162 million in dividends last financial year, and has flagged the payment of up to $324 million from its $3.4 billion cash pile. The financial results of Mrs Rinehart’s flagship family mining company show it made an after-tax profit of $633 million on revenue of $2 billion from its half-share of the Rio Tinto-operated Hope Downs mine, as well as from royalties on Rio’s other Pilbara mines... Read more

Phoenix Gold has now appointed Aaron Colleran as a non-executive director.... Read more

Cove Resources shares fly on tech acquisition... Read more

Woolworths shareholders look for green shoots at AGM... Read more

The trans-Tasman retailer behind The Athlete's Foot and Dr Martens has made a strong start to the financial year, thanks to a strong performance by the recently acquired Accent Group. RCG Corporation bought Accent in May, handing it control of the Platypus Shoes brand and making it the distributor of seven international brands including Vans, Skechers, Dr Martens and Timberland... Read more

Online sportswear retailer SurfStitch has splashed out $23.7 million on buying global water board sports distributor Surf Hardware International. Surf Hardware owns four popular global brands - FCS, Gorilla, Hydro and Softech - and is a market leader in the Asia-Pacific, US, Europe and Japan... Read more

Shares in poker machines supplier Ainsworth Game Technology have fallen almost nine per cent after news the company's top developer and strategist has resigned. Shares in Ainsworth Game Technology were 25 cents, or 9.5 per cent, lower at $2.39 at 1215 AEDT.... Read more

Egg fight intensifies over what consumers expect when buying free range. The battle to convince politicians of what shoppers truly expect when they buy free range eggs has intensified, with consumer and industry groups attempting to quash each other's research... Read more

One of WA’s biggest home builders, ABN Group, is cutting jobs across its businesses in the State as the flagging economy drags on the housing industry. ABN managing director Dale Alcock last night declined to provide details about the number of the redundancies but said they were in the low single digits in percentage terms... Read more

Lack of port facilities may put brakes on Carnival cruise line's growth in Australia... Read more

Australian Agricultural Company's shift away from live exports and toward packaged meat has helped the company to a first half profit for the first time in eight years. AACo made a net profit of $50 million for the six months to September 30, compared to a $13.59 million loss for the prior corresponding period. AACo shares closed 3.5 cents higher at $1.505.... Read more

Cancer drug development company Prescient Therapeutics has raised A$1 million via a share placement, bringing the company’s total cash raising this month to almost $2 million. The share placement – which follows quickly on a share purchase plan generating $927,421 – was completed at a price of A$0.054 per share... Read more

The National Rugby League is poised to announce a historic rights agreement with Fox Sports, with the News Corp-owned pay-television broadcaster believed to have acquired the rights to the crucial Saturday night game from the free-to-air rights holder Nine Entertainment Co for around $175 million as part of the five-year deal... Read more

NBN considering overbuilding dodgy $800m Optus cable... Read more

Corporate chairman Michael Chaney says there needs to be more women coming through senior management to produce enough eligible company directors... Read more

Gaming company Aristocrat Leisure expects its key North American market to perform strongly after coming up trumps with a full-year profit of $186.4 million. Aristocrat swung back into the black in fiscal 2015 thanks to the strong performance of its North American Video Gaming Technologies acquisition in October 2014... Read more

NSW power asset privatisation: Consortium wins bid for TransGrid electricity 'poles and wires' lease... Read more

New Myer Hobart store to open... Read more

Commonwealth Bank of Australia will refund $80 million after failing to give interest rate discounts, fee waivers and other benefits to customers of its Wealth Package. Australia's largest bank will make payments to more than 200,000 customers who missed out on the benefits, dating back in some cases as far as 2008... Read more

Online Vocational Education and Training course providers have signed up hundreds of vulnerable Territorians using misleading comments, leaving people in huge debt, the NT consumer watchdog says. NT Consumer Affairs Commissioner Gary Clements said hundreds of low-income, non-English speaking and Indigenous Territorians had been targeted over the past financial year... Read more

Opinion - John Daley & Brendan Coates: The truth about catch-up super contributions... Read more

International Headlines

U.S. Market Report: U.S. stocks fluctuated in light trading as signs that Russia won’t escalate tensions in the Middle East halted a rally in crude. European investors looked past the geopolitical tension to focus on the prospects for additional stimulus in the region. The Standard & Poor’s 500 Index traded in a tight range for a third day, as energy shares declined after crude tumbled to $42 a barrel in New York... Read more

North/South Americas Market Report: North and South American markets are mixed. The S&P 500 is higher by 0.15%, while the Bovespa is leading the IPC lower. They are down 2.10% and 0.38% respectively... Read more

European Market Report: European markets finished broadly higher today with shares in Germany leading the region. The DAX is up 2.15% while France's CAC 40 is up 1.51% and London's FTSE 100 is up 0.51%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 0.88%, while the Hang Seng led the Nikkei 225 lower. They fell 0.40% and 0.39% respectively... Read more

After defending the interests of oil-exporting nations for five decades, OPEC has made a surprising choice with its newest member: a country that consumes about twice as much crude as it pumps. Indonesia will rejoin the Organization of Petroleum Exporting Countries as its 13th nation next month, almost seven years after suspending its membership... Read more

Iran gears up for big return to world oil markets... Read more

The yen and euro got a boost Wednesday as the Turkish downing of a Russian fighter jet sent investors into safer assets on fears about the broader implications of the incident. Global financial markets were rattled by the shooting on the Syrian border, with European bourses tumbling and oil prices surging on supply fears... Read more

U.S. consumer spending barely rose in October as households took advantage of rising incomes to boost savings to their highest level in nearly three years, pointing to moderate economic growth in the fourth quarter... Read more

U.S. jobless claims fall more than expected... Read more

The Federal Reserve’s benchmark U.S. interest rate could rise twice as much as Wall Street expects in 2016. So says the prominent investment bank Goldman Sachs. The central bank is widely expected to raise the short-term fed funds in December, marking the first increase in almost a decade. But bond-market futures suggest rates will only rise an additional 50 basis points in 2016... Read more

Junk bond yields are soaring — and the Fed hasn’t raised rates yet... Read more

It may be game over for daily fantasy sports in New York if a judge agrees with state Attorney General Eric Schneiderman and blocks the two biggest sites from operating in one of their biggest markets. Lawyers for FanDuel Inc. and DraftKings Inc. are now arguing in state court that they should be allowed to keep the games running in the state... Read more

Deere & Co. shares surged 6% in premarket trade Wednesday, after the company blew past profit and sales estimates for its fiscal fourth quarter, as cost cuts helped offset weakness in global markets for farm and construction equipment... Read more

Apple has purchased the company behind motion-capture technology used in the latest Star Wars film. Faceshift, a Zurich based start-up, specialises in software that allows 3D animated characters to mimic the facial expressions of an actor... Read more

US ratings agency Standard and Poor's says a budding eurozone recovery is gathering steam thanks to consumers loosening their purse strings. In a report entitled "Hangin' In There Despite Weak Foreign Demand", it said domestic demand had emerged as a main driver for growth, offsetting export weakness... Read more

Ukraine closes airspace to all Russian planes... Read more

The world's biggest oil and gas companies risk losing $2.2tn (£1.5tn) by overestimating future demand for fossil fuels, a report suggests. By underestimating both legislation to cut the use of dirty fuels and the development of clean energy, these firms are investing in assets that may prove worthless, says Carbon Tracker. Shell, Exxon Mobil and BP are among those most a risk, it says... Read more

BTG Pactual CEO Esteves Arrested In Brazil's Graft Probe, Police Say... Read more

Abengoa SA’s bonds and stock tumbled to records after the embattled renewable-energy company said it was seeking preliminary protection from creditors following the breakdown of talks with a new investor... Read more

ECB Warns Asia Risks Rising as Fed Liftoff Tests Stability... Read more

Xiaomi's $45 Billion Valuation Seen `Unfeasible' as Growth Cools... Read more

Toyota recalls 1.6m more cars over defective airbags... Read more

Singapore is expected to add an average of 37,600 millionaires a year through 2020. That's an estimated total of 188,000 millionaires over the next five years, or an 18% growth rate -- faster than the 16% Hong Kong will see, according to WealthInsight. It also means one in 30 Singaporeans will be a millionaire by then... Read more

Sony PlayStation 4 sales surge to over 30 million... Read more

All In: Why Nikesh Arora Bet $483 Million on SoftBank's Future... Read more

If China Killed Commodity Super Cycle, Fed Is About to Bury It... Read more

Opinion - Douglas MacMillan: Yahoo CEO Marissa Mayer faces morale challenge... Read more

Opinion - Adnan Z. Amin and Fatih Birol: World at tipping point for renewable energy... Read more

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