ASB Securities Morning Brief for Thursday, 21 May 2015
Thursday, 21 May 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares were mixed, Fonterra Shareholders Fund fell after dairy prices fell overnight. Spark New Zealand declined as one major broker ranked the stock as 'under-perform,' while Chorus rose. The NZX 50 Index edged down 1.375 points, or 0.02%, to 5755.787. Within the index, 18 stocks fell, 18 rose and 14 were unchanged. Turnover was $130 million... Read more

The New Zealand dollar fell as investor optimism about the strength of the US economy, ahead of minutes to the last Federal Open Market Committee meeting, underpins the greenback. The kiwi traded at 73.58 US cents at 5pm in Wellington from 73.35 cents at the start of the day and from 74.20 cents yesterday. The trade-weighted index declined to 76.19 from 76.39 yesterday... Read more

The Local Government Funding Agency, New Zealand councils' lender, now boasts the country's second longest bond term, as the sector moves to a 30 year infrastructure planning regime... Read more

A rising tide of "underemployment" is creating a new social underclass, say the Greens in accusing the Government of "massaging" unemployment figures. Since 2013 March Quarter, the number of people classified as underemployed had risen from 82,400 to 103,600 in the same quarter in 2015. ... Read more

First homebuyers told not to get their hopes up with Budget... Read more

Nearly one in five Auckland homes are sold within two years of being purchased, the Government has been told by officials. But it is not known how many of those are investment properties that would be subject to a new "bright-line" tax on capital gain. Prime Minister John Key announced the new tax on Sunday which aims to crack down on speculators who are turning a quick buck on the back of rising house prices... Read more

Budget 2015: Housing, capital gains tax on wishlist. Development of physical infrastructure has topped a business wishlist for today's Budget, according to a snap poll of EY clients.... Read more

Tenants are paying $25 more per week in April 2015 than they were in April last year, according to new Trade Me Property data... Read more

Residential rents have risen by 6.3 per cent in the year to April to a record-equalling median of $420 a week, a report says. Head of Trade Me Property Nigel Jeffries said the rise equated to tenants paying $25 more a week in April 2015 than they did a year ago, or $1300 a year... Read more

Wellington City Council forced to write off thousands of dollars in rental debt... Read more

Govt to sell 430 ha of Auckland land for housing... Read more

Minister to attend APEC trade meeting in the Philippines. Trade Minister Tim Groser will depart tonight for Boracay, Philippines to represent the New Zealand Government at the annual Asia-Pacific Economic Cooperation (APEC) meeting of Ministers Responsible for Trade (MRT) on 22-24 May... Read more

Dairy prices fall for fifth consecutive auction. Dairy prices on Fonterra's GlobalDairyTrade auction have fallen 2.2 per cent in the latest sale.... Read more

Federated Farmers on the TPP. Agricultural and Agri-Food Producers Call for an Ambitious, Fair, and Comprehensive Agreement through the Trans-Pacific Partnership... Read more

Goodman Property Trust, which has teamed up with Singapore government owned GIC to develop the Auckland Viaduct Quarter, lifted annual earnings 5.4 percent as it reaped higher rental revenue while clamping down on costs... Read more

A crowdfunding offer is a way for interested investors to take a share of New Zealand Income Guarantee (NZIG) without having to stump up a $50,000 minimum investment, its chief executive says... Read more

Colin McKenzie has stepped down as managing director and chief executive of Cavalier Corp ahead of asset write downs that will result in a full-year loss for the carpet maker. The Auckland-based company named chief financial officer Paul Alston as interim chief executive with immediate effect, and said McKenzie will work out his notice doing certain projects for the board... Read more

Christchurch tech firm Jade Software is pushing ahead of schedule in its plans for profitability, cutting losses by two thirds last year. The firm released its annual results for 2014 on Thursday , showing revenue was up 13 per cent to $30 million, and net loss before tax was down to $974,000 from $3.5 million in 2013... Read more

TruScreen to raise up to $4 mln to fund Chinese expansion... Read more

Prime Minister says Christchurch convention centre costs "prohibitive". Costs for a Christchurch Convention Centre have blown out meaning budget pruning work is needed, Prime Minister John Key says... Read more

Toyota Announces Executive Changes. Spencer Morris has been appointed the General Manager of Product Planning, adding to his existing role as General Manager of Customer Services at Toyota New Zealand... Read more

Vodafone NZ's annual revenue dips as competition mounts... Read more

APN's NZME sees future in paywalls, growth in share of digital sales... Read more

West Auckland's Te Whanau O Waipareira Trust is bidding to enter the city's overheated housing market - and wants the Government to make land available, so it can build at affordable prices. The trust is bidding for two large blocks of state land in Moire Rd in Massey, and is also negotiating a possible role in a commercial deal to build apartments on top of The Warehouse in Newmarket... Read more

Any surprise research & development measures in today's Budget will likely be geared towards business, says one expert. It is probable that the Government's main act for R&D today will be the already announced $80 million increase for Callaghan Innovation's grants programme... Read more

Christchurch businesses want help with research and development in Budget 2015... Read more

NZ broadband 'doing ok'. New Zealand's internet speeds are in the middle of the pack, but could benefit from a greater uptake of the ultra fast-broadband (UFB) initiative, an industry commentator says. Telecommunications Users' Association of NZ (TUANZ) chief executive Craig Young said New Zealand was "doing ok" on the world stage... Read more

Plenty of positive action is underway to help local businesses and promote economic development, the Dunedin City Council says. Local Government New Zealand (LGNZ) today released the results of its inaugural Local Government Survey, carried out from June to September last year, which asked the public and businesses about their perceptions of city, district and regional councils across New Zealand... Read more

Poll shows local government has a reputation problem... Read more

A revitalised $274-million rail plan to shift tourists faster between Queenstown and Milford Sound has been mooted. A proposal by MSLR to build a 15-kilometre vehicular drive-on-drive-off electric railway, passing through a 13.5km tunnel between Milford Sound and Queenstown, has been included in the submissions for the Queenstown Lakes District Council 10-year plan... Read more

Philippine Airlines will launch services to Auckland from Manila later this year. It will be the first time the airline has ever operated in New Zealand... Read more

Consumer NZ ramps up campaign to get Qantas's Jetstar to drop pre-ticked booking forms... Read more

Jetstar say they are not alone in using an "opt-out" pricing regime on their booking website after the company came under fire from Consumer New Zealand over the practice... Read more

Bankrupt developer David Henderson has attacked a decision that stopped him travelling abroad and made him the subject of a border alert. Henderson, 60, who is representing himself in an appeal against the decision at a hearing in the High Court at Christchurch, began an application to travel abroad in June last year. Bankrupts must obtain permission from the Official Assignee before going overseas... Read more

A soldier whose life was thrown into turmoil when a telecommunications company wrongly referred him to debt collectors has won a long-running battle. The Human Rights Review Tribunal has ordered Orcon to pay $25,000 to Brett James Taylor and train its staff about the company's privacy obligations... Read more

Opinion - Fran O'Sullivan: Cashed-up housing horse is long gone. Tax package too late to curb foreign appetite for local market... Read more

Opinion - David Chaston: Does it make sense to you? Low rates allow low repayments. So do longer terms. But neither seem rational. Irrational expectations of long term capital gains keep the structure together... Read more

Opinion - Daniel Hoggard: Dairy industry critics need to tell both sides. Several weeks ago, we had academic paper that was published in a minor American journal that basically stated the cost of the dairy industry to New Zealand equalled what it was worth. So that it was a zero sum game... Read more

New Zealand Herald Editorial: Government must present path to surplus... Read more

Opinion - Chris Keall: Giant German lying in the way of any Banks run for mayor... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket pared earlier losses to close flat but steep falls in mining and energy stocks prevented the bourse from moving into positive territory. At the 4.15pm (AEST) official market close, the benchmark S&P/ASX200 index was down 5.2 points, or 0.09 per cent, at 5610.3, while the broader All Ordinaries index had fallen 5.4 points, or 0.1 per cent, at 5614.... Read more

The Australian dollar was weaker today amid a widening view the RBA isn’t yet done cutting interest rates, while strength in the US dollar and weaker commodity prices also weighed it down. At 5.02pm (AEST), the Australian dollar was trading at US78.94c, compared with US79.73c at the same time yesterday... Read more

Consumer confidence has shot up to its highest level in months, getting a big hand from the May federal budget and the Reserve Bank’s latest interest rate cut. The Westpac/Melbourne Institute index showed consumer sentiment rose by 6.4 per cent in May to 102.4 points, above 100 points for the first time since February, indicating there are more optimists about the economy than pessimists... Read more

Bowen prepared for a super election. Federal Labor has thrown down the gauntlet to the Abbott government over superannuation, vowing to take its crackdown on tax concessions for high-income retirees to the next election... Read more

Wool prices rise 15pc in two months, giving Australian industry much needed boost... Read more

GrainCorp's $500m project spree to ward off the weather. GrainCorp managing director Mark Palmquist said the grain giant's $500 million of growth projects will provide earnings stability in drought years and allow GrainCorp to tap into major global growth trends... Read more

Deputy Prime Minister Warren Truss has locked horns directly with the Maritime Union over moves to loosen rules for wages and conditions on ships travelling in Australian waters.... Read more

The price of iron ore has retreated for the seventh consecutive session after news of further weak data out of China. At the end of the latest session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at a fresh two-week low of $US57.80 a tonne, down 1 per cent from its prior close of $US58.40 a tonne. The losing streak is the worst since a two-week slump in late-March into early-April that led the commodity to a 10-year low of $US46.70... Read more

Australia could miss out on 2nd LNG boom... Read more

BHP Billiton will pay a $US25 million ($A31.7m) fine to settle a long-running SEC anti-graft and corruption investigation into its sponsorship of the 2008 Beijing Olympics, and alleged payments for a Cambodian exploration project... Read more

Caeneus Minerals is preparing to reveal details of an acquisition. The ASX has granted the company a trading halt, with its shares placed in pre-open... Read more

Vimy Resources is seeking to raise $30 million to fund it through to financing of its Mulga Rock uranium project... Read more

Poseidon Nickel selling Silver Swan underground rights to Caeneus Minerals... Read more

Metallum Limited has been granted a trading halt by the ASX, pending details of a capital raising... Read more

General Electric Co is starting a process to sell its $US5 billion Australia commercial-lending operation, according to people familiar with the situation, dismantling another key piece of GE Capital in Asia... Read more

Charter Hall is raising $225 million via a fully-underwritten institutional placement at $4.78, a 2.8% discount to Wednesday’s closing price. The deal is being handled by Macquarie and UBS... Read more

Telstra reveals large-scale security breach at Pacnet... Read more

Breach could hurt Asia drive. Australia's leading cyber-spies have joined the hunt for hackers who broke into Telstra's Asian subsidiary Pacnet in an attack affecting thousands of customers including The Australian Federal Police, Department of Foreign Affairs and Trade and other government agencies.... Read more

Amasyim aiming to raise $300m ahead of its ASX debut ... Read more

Goyder angered by 'nonsense' talk. Wesfarmers managing director Richard Goyder has defended a fall in the conglomerate's return on equity since buying Coles, hitting out at "nonsense" commentary on the subject. Wesfarmers shares were off 28 cents to $43.43 at the close... Read more

Plans for a $450 million overhaul of the Westfield Innaloo shopping centre that will see it nearly double in size and add a second storey and a new cinema complex have been unveiled today... Read more

Supermarket heavyweight Coles says private-label products are key territory in its battle to innovate and cut the cost of the weekly shop. Managing director John Durkan has told investors in parent group Wesfarmers that the strategy for Coles-brand products would see the ranges tailored to customer demand.... Read more

The Sultan of Johor has emerged as an unlikely player in plans to restore Dalkeith’s historic Sunset Hospital after paying $8.5 million for a small part of the site. Proceeds from the sale of the block of prime riverside real estate to Sultan Ibrahim Ismail of Johor will be used by the State Government to restore the wider heritage-listed site... Read more

NAB appoints UNSW law professor to advise customers on complaints... Read more

Corruption inquiry hears of Ultranet’s chequered beginnings. Manager raised concerns about $1m Oracle contribution... Read more

BBY clients consider legal action against ASX, ASIC over potential million-dollar losses. Irate clients of the collapsed broker BBY are blaming the ASX and ASIC for the loss of potentially millions of dollars and are considering legal action.... Read more

Newcastle Jets' A-League licence cancelled after Nathan Tinkler places club in voluntary administration... Read more

Opinion - Adam Carr: Bonds send value signal for equities... Read more

Opinion - Elizabeth Knight: Iron ore: opposition makes possible inquiry the Captain's choice... Read more

International Headlines

U.S. Market Report: US stocks fell in early trade with investors expected to remain cautious ahead of the minutes from the latest Federal Reserve meeting. After closing at a record high on Tuesday, the Dow Jones fell 29.79 points to 18,282.60. The S&P 500 dropped 4.01 points to 2,123.82, while the Nasdaq index was down 9.12 points at 5,060.92.... Read more

North/South Americas Market Report: North and South American markets are mixed. The S&P 500 is higher by 0.24%, while the Bovespa is leading the IPC lower. They are down 0.52% and 0.10% respectively... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The CAC 40 gained 0.31% and the FTSE 100 rose 0.17%. The DAX lost 0.04%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 0.85% and the Shanghai Composite rose 0.65%. The Hang Seng lost 0.40%... Read more

Oil prices rebounded in Asia Wednesday following steep losses in the previous session, but analysts said gains were capped by a strong dollar and persistent concerns about a global supply glut. US benchmark West Texas Intermediate (WTI) for July climbed 53 cents to $58.52 while Brent crude for July delivery gained 61 cents to $64.63 in afternoon trade.... Read more

A June rate hike is ‘unlikely,’ Fed minutes suggest... Read more

5 big banks pay $5.4 billion for rigging currencies. U.S. regulators hit five global banks with $5.4 billion in penalties Wednesday for trying to rig foreign currency markets in their favor. Citigroup, Barclays, JP Morgan Chase, and Royal Bank of Scotland were fined more than $2.5 billion by the U.S. after pleading guilty to conspiring to manipulate the price of dollars and euros... Read more

Fasten your seat belts and stow your tray tables, investors. The major airline stocks hit a big pocket of turbulence Wednesday. Shares of Southwest, American, United, Delta, JetBlue and Spirit were all down between 6% and 8%. An airline ETF that debuted last month, U.S. Global Jets, fell nearly 5%... Read more

Anthropologie got off to a weak start in 2015. Its parent company, Urban Outfitters, reported this week that the chain delivered a “disappointing” first quarter, in large part due to a simple misstep: The line-up of dresses in its stores this spring were just not that appealing... Read more

L.A. to raise minimum wage sharply to $15 an hour... Read more

Benjamin Lawsky to Step Down as New York’s Top Financial Regulator... Read more

US retail giant Target has reported a 52% increase in quarterly earnings to $635m (£409m), helped by a boost from online sales. The results, which beat forecasts, were also helped by strong sales of clothing and children's products... Read more

A second Bernard Madoff employee avoided prison for his role in the con man’s $17.5 billion Ponzi scheme after helping prosecutors convict former colleagues who took their chances at trial... Read more

Moody's sees 'high likelihood' of capital controls in Greece... Read more

ECB Said to Raise Greek Bank Emergency Cash by 200 Million Euros... Read more

Millions of commuters have been hit by delays in Germany after Deutsche Bahn's train drivers went on strike again. Two in three long-distance trains and hundreds of commuter services have been cancelled from Wednesday morning... Read more

Belgian prosecutors investigate alleged intimidation of Uber drivers... Read more

The High Court has turned down an application to vary the £5m bail conditions imposed on Navinder Sarao, the trader accused of helping cause the stock market "flash crash". The decision means Mr Sarao will remain in custody while fighting his extradition to the United States... Read more

Fraudster Edward Davenport sells mansion to settle £13m court orders. Convicted ‘lord’, who mastermind Gresham Ltd scam, is thought to have raised £25m from sale of London property featured in The King’s Speech... Read more

High Street retail giant Marks and Spencer has reported its first rise in annual profits for four years, saying it has made "good progress". Underlying profit before tax rose 6.1% to £661.2m for the year to 28 March, better than analysts' forecasts... Read more

Vietnam invests almost $1 billion in Russia in Q1 2015... Read more

Russia said it will take Ukraine to court if the government in Kiev fails to make its next coupon payment after passing a law allowing it to stop servicing its debt. “In June, a $75 million payment is due,” Finance Minister Anton Siluanov told reporters in Moscow on Wednesday. “We’ll see, if they miss the payment, we will use our right to go to court.”... Read more

Eastern gate: The feasibility of Vladivostok as a free port. Talk of Russia opening its ‘eastern gate’ has been heard for a long time, but no breakthroughs in this direction were observed until recently. The project of a ‘free port’ can be viable only if it is focused on the needs of the regional economy... Read more

Chinese Solar Maker Plunges, Losing Nearly $19 Billion in 24 Minutes... Read more

Here's the good news: Japan's economy is posting strong growth. But the bad news? Economists are warning there's slower expansion ahead for Asia's second-largest economy. Gross domestic product grew by an annualized 2.4% in the three months ended March, Japan's Cabinet Office said Monday. The figures were better than what most experts were expecting, and stronger than last quarter's growth... Read more

Ideological mountain to climb for China-India business... Read more

Narendra Modi on What India Can Learn From South Korea... Read more

Analysis - Marks & Spencer: what the analysts say. The retailer has delivered its first profit increase since 2011 and promises to return £150m to shareholders via a buyback. Here’s what the experts think... Read more

Opinion - Ian King: Here’s Why Apple Would Be Wise to Stay Out of the TV Business. The economics of making a television aren't like those of smartphones and computers... Read more

Analysis - Steve Goldstein: Here’s how ‘the cartel’ rigged the currency market... Read more

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