ASB Securities Morning Brief for Thursday, 08 October 2015
Thursday, 08 October 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares fell as investors looked to book recent gains in a volatile market. Tower led the benchmark index lower, followed by Freightways, MightyRiverPower and Steel & Tube Holdings. The S&P/NZX 50 Index fell 18.08 points, or 0.3 percent, to 5650.03. Within the index, 23 stocks fell, 22 rose and five were unchanged. Turnover was $120 million... Read more

The New Zealand dollar rose to a six-week high, extending gains after another increase in milk product prices at the latest GlobalDairyTrade auction, and higher commodity prices across the board. The kiwi climbed as high as 65.61 US cents, the highest since Aug. 25, trading at 65.88 cents at 5pm in Wellington from 65.41 cents at 8am and 64.99 cents yesterday. The trade-weighted index advanced to 71.17 from 70.51 yesterday... Read more

The Labour Party says it may defy the Trans Pacific Partnership's rules on property sales if it enters Government. Finance spokesman Grant Robertson said his party wanted to reserve the right to legislate in the best interests of New Zealanders... Read more

The number of Christchurch recruitment companies has hit a record high thanks to rebuild work, while the Government continues to monitor the treatment of migrant workers. Some within the industry worry that when that reconstruction work slows, recruitment or hire firms will struggle. But none of the bigger staff hire companies are admitting to any work slowdown yet, saying they have more temporary staff on their books than ever... Read more

TPP prevents future ban on foreign buying. MFAT says TPP effectively prevents future ban on foreign buying of property; TPP rules also apply to non-TPP countries such as China; TPP also doubles threshold for Overseas Investment Act rules; Labour worried... Read more

Rents on Auckland houses up $40 a week in the last year, Christchurch rents drop... Read more

Renting continues to outstrip home ownership growth... Read more

The NZ Superannuation Fund is actively seeking new domestic investment opportunities where it believes it has "hometown advantages" but chief executive Adrian Orr said they're difficult to find at the scale it needs... Read more

FMA keen on KiwiSaver engagement. KiwiSaver advice practices will always be a point of interest to the Financial Markets Authority, its director of markets oversight says.... Read more

Dairy product prices climbed in the latest GlobalDairyTrade auction, increasing for a fourth consecutive time after nearly six months of declines. The GDT average winning prices rallied 9.9 percent to US$2,834, the highest level since March, up from US$2,568 at the previous auction three weeks ago. Some 35,243 tonnes of product was sold, down from 36,050 tonnes of product three weeks ago... Read more

ANZ economists see 'further impetus' for milk price forecasts to move above $5; less urgency seen for further immediate RBNZ interest rate cuts... Read more

Kiwifuit Claim Urges Zespri To Back Growers. Following the landmark Trans-Pacific Partnership (TPP) signed this morning, only days before the High Court’s 9 October deadline for growers to sign up to the claim against the government for its alleged negligence behind the devastating introduction of Psa-v disease into New Zealand, The Kiwifruit Claim committee says it is more important than ever that Zespri advises its members to seriously consider joining the action to seek compensation... Read more

Alternate plan pushed for SFF. A group of Silver Fern Farms shareholders who oppose the company's proposed joint venture with Shanghai Maling Aquarius say their offer of a $90 million alternative capital raising proposal remains a live issue just days before the deal goes to the vote... Read more

ACC's 14.5% investment return beats benchmark as NZ, global bonds and equities outperform... Read more

Supermarket giant Foodstuffs has signed a deal to buy 21 liquor stores from national chain The Mill Retail Holdings.... Read more

Air New Zealand, the country's national carrier, said increased passenger demand will drive an 85 percent jump in first-half earnings before tax to $400 million. The forecast profit is up from $216 million achieved in the first half of last year and excludes any equity-accounted contribution from its stake in Virgin Australia. The airline's share price is trading up 3.4 percent to $2.58 today.... Read more

Air New Zealand boss says lessons learned, but disrupted flights 'inevitable' ... Read more

Air New Zealand boss Christopher Luxon says a huge opportunity exists to increase visitor arrivals from the United States, but misconceptions about this country need to be overcome. Speaking at the airline's annual meeting in Auckland yesterday, he said 30 million of 120 million US passport holders had New Zealand "on their bucket list" of places they wanted to visit... Read more

Jetstar to launch Cook Islands service next March... Read more

Jetstar flights will boost Cook Islands' Economy... Read more

Summerset lifts annual earnings guidance as sales jump 64% in third quarter... Read more

Retirement village operator Metlifecare has signed a conditional agreement for an undisclosed sum to buy land on Auckland's North Shore as part of its proposed $300 million village project. The Auckland-based company has bought a 3 hectare site, on McClymonts Road in Albany, marking its 17th village in the wider-Auckland region... Read more

US telecommunications company D&S Communications has paid $3 million for the assets of Mako Networks from the failed network security company’s receivers.... Read more

More than 460 customers have used Asteron Life’s new online LifeSnap tool in its first month of operation.... Read more

FSCL takes issue with ISO name. Financial Services Complaints Ltd (FSCL) is not ruling out taking legal action over the Insurance and Savings Ombudsman’s name change.... Read more

Joe Pullos joins AHL entertainment... Read more

Synergy appoints former Sovereign man. Synergy, the new class DIMS offer from FANZ and Consillium has appointed a business development manager to work with advisers.... Read more

New E tu union seeks relevance in changing labour market... Read more

The Commerce Commission has formally warned Consolidated Alloys N.Z. for cartel-like behaviour after the Australian owned manufacturer used a settlement over a patent dispute to try and restrict roofing products available in New Zealand... Read more

Huka Lodge owner Alex van Heeren will get the chance to explain the extent to which he has any control over two entities in the land-locked microstate of Liechtenstein where he transferred all of his assets. This follows van Heeren's former business partner arguing that the Dutch businessman should have his financial affairs probed before a judge at the High Court in Auckland... Read more

The Commerce Commission has completed the distribution of $25.5 million to complainants and rural charities after reaching settlements with banks who had marketed interest rate swap products to farmers. The commission says nearly $20 million in cash has been paid to eligible customers while $1.9 million was offset by the banks against debts some complainants owed to them... Read more

A troubled Hamilton building company has seen millions of dollars of its land put up for sale – but it won't get the money. Hamilton housing company New Settler Homes, directed by Lijun Zhang, is understood to have borrowed a significant sum of money from Aucklander Xiaozhen Liu... Read more

Wellington meat processors Taylor Preston has been fined $72,500 and ordered to pay $8000 to a cleaner who got her fingers caught in a conveyor. The victim had tried to remove a piece of debris off a conveyor during the night time cleaning process. She had reached into the machine while it was on to remove a piece of meat and her fingers were momentarily trapped... Read more

The liquidation of a Wellington property management company has been terminated after its director settled its debts. On Tuesday, a lawyer for Craig Relph, the sole director of Portfolio Property Management appeared at the summary judgment, bankruptcy and company liquidations proceedings at the High Court in Wellington... Read more

Opinion - Pattrick Smellie: Tax system playing catch-up with globalisation... Read more

New Zealand Herald Editorial: TPP trade pact off to a solid start... Read more

The Dominion Post Editorial: TPP a modest deal for New Zealand - with costs. So the great Pacific trade deal is inked, if not quite made public, or, indeed, made truly final – a big ratification fight still looms in the United States. The rhetoric is wild; Professor Jane Kelsey calls the Trans Pacific Partnership a "travesty of democracy", while the exporters' lobby says not signing would have returned this country to "Fortress New Zealand"... Read more

Australian Headlines

Australian Market Report: Resurgent resources stocks have pulled the Australian sharemarket to a third straight higher close, as investors continue to pile into the oversold energy and mining sector. It was a volatile day of trade on the local exchange, with the market swinging between positive and negative territory before finishing decisively higher. At the 4.15pm (AEDT) official market close, the benchmark S & P/ASX200 index was up 30.5 points, or 0.59 per cent, to 5197.9, while the broader All Ordinaries had gained 29.4 points, or 0.57 per cent, to 5228.4.... Read more

Strong commodity prices have helped the Australian dollar extend the rally it started on Tuesday with better-than-expected economic commentary from the Reserve Bank of Australia (RBA). At 1.30am (AEDT) on Thursday, the currency was trading at US72.19c, up from US71.85c on Wednesday... Read more

Slowdowns across some of Asia's key economies are likely to curtail Australia's own economic growth in 2016, a major investment bank predicts. JP Morgan has cut its GDP forecasts for Australia in response to more sobering growth assessments for some of its major trading partners including China, Japan and Singapore... Read more

Prime Minister Malcolm Turnbull has put his own tech spin on his predecessor's call for Australians to "have a go".... Read more

Australia's banks are urging the government not to impose more red tape and taxes as part of its long-awaited response to the financial services inquiry. The government was handed the inquiry's report by former Commonwealth Bank boss David Murray in November 2014... Read more

Average rents skyrocket in Sydney... Read more

Property makes rich Aust families richer... Read more

Chinese and Hong Kong tourists could become Australia's top tourist group in less than a year, surpassing New Zealand, if current growth trends continue. The low Australian dollar, our proximity to Asia and an unquenchable appetite for Aussie products are all fuelling ticket sales Down Under, CommSec says... Read more

High Peak Royalties has been granted a trading halt by the ASX this morning, pending details of a material agreement... Read more

Greenland Minerals and Energy granted ASX trading halt... Read more

Azure Minerals follows up stellar silver hits in Mexico... Read more

Consolidated Zinc has confirmed the presence of extremely high-grade zinc and lead at its Plomosas project in Mexico, with preliminary assaying finding more 30% zinc in eight samples... Read more

Embattled miner and commodities trader Glencore Plc on Wednesday called on delegates meeting for a global climate summit later this year to adopt a policy that recognizes coal as an important energy source. "We need global policy that acknowledges the global energy reality that fossil fuels including coal will continue to be used," Glencore head of global coal assets Peter Freyberg said in prepared remarks for a speech in Australia... Read more

Western Areas has pushed back nearly $32.6 million in proposed capital expenditure by a year in response to weak nickel prices. However the nickel miner insisted the deferral would not affect its production guidance or costs... Read more

Rail giant Aurizon set to slash 800 jobs as resources downturn forces cost cuts by $310 million... Read more

Shares in Saracen Mineral Holdings were higher after the company gave an upbeat assessment of its September quarter. The gold miner reported production of 38,140 ounces and said it held $44.9 million in cash and bullion at the end of the quarter, unchanged from the end of June. Saracen shares were up 1.5 cents, or 2.83 per cent, to 54.5 cents at the close.... Read more

MRL Corporation is heading to market with a capital raising, and the ASX this morning has granted the company a trading halt to prepare.... Read more

One of the founders of Australian tech giant Atlassian has scotched claims that a debut on American sharemarkets would hurt the local tech sector. Co-founder Mike Cannon-Brookes said that criticism of the company's reported IPO on Wall St was "total bullshit" and that a listing would instead benefit the local scene... Read more

Ford Australia will source vehicle parts from 63 suppliers after it switches from car manufacturing to engineering and design... Read more

Supermarkets slash private label prices to drive sales. Coles and Woolworths have both slashed private-label prices to drive sales and convert more shoppers to their home-brand products. Woolworths took the scalpel to its premium private-label range in the three months to the end of September, said Deutsche Bank research, slicing 9 per cent off prices which Coles cut by 7 per cent in the same period... Read more

Axis Capital Holdings Ltd said it would wind down its Australian reinsurance operations and cut its workforce by about 100 positions as it pushes to make itself more profitable. The specialty insurer said it would take a charge of about $US51 million in the third quarter, but that it also expects cost savings of about $US30 million on a run-rate basis. Axis said it would continue to serve Australia through other platforms... Read more

US travel giant Expedia will look to stem an ongoing decline in bookings at its local subsidiary Wotif with the launch this week of the first major brand campaign in years on television, radio, outdoor and through digital channels. Expedia bought Wotif for $703 million last year and until now has been focused on merging Wotif onto its own technology platform, in a move that has led to the Expedia and Wotif brand websites having little differentiation... Read more

Volkswagen, Audi say 90,000 Australia vehicles had emissions cheating software... Read more

Pushing the boundaries of innovation, Gold Coast business Evolve Skateboards has netted a global distribution of 30 countries and a flurry of awards in three years. The Small Business winner at yesterday’s Premier of Queensland’s Export Awards, Evolve Skateboards joined an impressive list of Queensland businesses, led by Exporter of the Year Packer Leather... Read more

Senate inquiry examines Perth Freight Link. A resident fearful of losing her home under the controversial $1.76 billion Perth Freight Link project has wept while making her submission to a senate inquiry... Read more

IOOF slapped with class action after Fairfax Media revelations. Maurice Blackburn is preparing a shareholder class action against embattled financial services firm IOOF for breaches of continuous disclosure laws and misleading and deceptive conduct... Read more

No advantage naming evaders: taxman... Read more

Opinion - Michael West: TPP: 'She's a beauty, mate!' Really?... Read more

Opinion - Malcolm Maiden: Australian dollar rally a dead cat bounce, so slump will continue... Read more

Opinion - Stephen Long: A recession might not be imminent, but it is overdue... Read more

Analysis - Remy Davison: Debunking the TPP myths. Eight years in total of protracted negotiations. Twelve countries. The largest multi-continental trade agreement since APEC in 1989. The Trans-Pacific Partnership is complete. Almost... Read more

International Headlines

U.S. Market Report: Wall Street turned negative in late morning trading on Wednesday as tech stocks, led by Apple, fell and a rally in crude oil prices was checked... Read more

North/South Americas Market Report: North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 7.73% while U.S.'s S&P 500 is up 0.56% and Mexico's IPC is up 0.40%... Read more

European Market Report: European markets finished higher today with shares in Germany leading the region. The DAX is up 0.68% while London's FTSE 100 is up 0.16% and France's CAC 40 is up 0.14%... Read more

Asian Market Report: Asian markets finished broadly higher today with shares in Hong Kong leading the region. The Hang Seng is up 3.13% while Japan's Nikkei 225 is up 0.75% and China's Shanghai Composite is up 0.48%... Read more

Oil seesaws; struggles to extend rally after U.S. crude build. Brent, the global crude benchmark, was up 25 cents at $52.17 a barrel by 12:22 p.m. EDT (1622 GMT). At its session high, Brent was up more than $1, and then it turned negative before edging slightly higher. The West Texas Intermediate (WTI) benchmark for U.S. crude was down 5 cents to $48.48 a barrel. It had also been up more than $1 at its session high... Read more

Fed faces 'tough call' on rates: Bernanke... Read more

Pepsi is getting hit hard in Venezuela. On Tuesday, Pepsi reported a massive $1.4 billion charge for its business in Venezuela, citing the country's uncertain currency, economy and political outlook... Read more

Ratings agency Moody's Investors Service upheld the United States' triple-A credit rating and stable outlook on Wednesday, but it noted potential longer-term threats to the rating... Read more

JPMorgan buys more mortgages from other lenders as market shrinks... Read more

The New York Times is seeking to more than double its digital subscribers by the end of the decade, according to a new strategy memo shared with employees on Wednesday... Read more

Constellation Brands Inc's quarterly profit handily beat analysts' estimates and the company raised its full-year adjusted profit forecast for the second time, driven by higher sales of beers under its Corona and Modelo brands. The company's shares rose 3.8 percent to $136.25 in premarket trading on Wednesday.... Read more

The U.S. Federal Trade Commission is likely to delay a decision on approving Staples Inc's $6.3 billion takeover of rival Office Depot Inc, the Wall Street Journal reported on Wednesday... Read more

Monsanto slashing 2,600 jobs, buying back shares as sales fall... Read more

Fiat Chrysler, U.S. union UAW at table as strike looms... Read more

SABMiller, the world's second largest brewer, has promptly rejected an improved offer from bigger rival Anheuser-Busch InBev, saying on Wednesday that its 68 billion-pound ($104 billion) valuation was insufficient. Earlier Belgium-based AB InBev said it was willing to pay 42.15 pounds in cash per SABMiller share, having already made two prior offers at 38 and 40 pounds, the increase made possible if its two biggest shareholders accept a lower value share-and-cash alternative offer... Read more

Profits have soared since the global financial crisis at the five biggest U.S. banks with market-making dealing operations, New York Federal Reserve economists said in an article released on Wednesday. From 2009 to 2014, the combined net income of J.P. Morgan, Citigroup, Bank of America, Goldman Sachs and Morgan Stanley annually averaged $41.73 billion, up from annual average of $25.08 billion from 2002 to 2008, they said... Read more

Bombardier shares sink as Airbus talks fail, focus turns to funding woes. Shares in Bombardier, which ended the day 15 percent higher on Tuesday following the Reuters report, were down 14 percent at C$1.52 on Wednesday.... Read more

VW has appointed former finance chief Hans Dieter Poetsch as its new chairman, following a board meeting to discuss the emissions scandal. Mr Poetsch said it would be "some time" before the carmaker could uncover the details of the emissions test cheating... Read more

Volkswagen plays down hopes of quick answers over emissions cheating... Read more

Volkswagen says diesel recall to run through 2016... Read more

Troubled supermarket Tesco has announced another big fall in profits as it struggles to turn its business around. Underlying profits for the first half of its financial year were £354m, 55% down on the same period last year, when it made £779m... Read more

Finnish network equipment maker Nokia said on Wednesday its executives would dominate the new leadership team once it completes its proposed acquisition of Alcatel-Lucent. Chief Financial Officer Timo Ihamuotila will stay in his job and altogether 10 out of a total 13 members in the planned group leadership team come from Nokia... Read more

Rio 2016 organizers clamp down on costs amid Brazil recession... Read more

Saudi prince now owns 5% of Twitter... Read more

Yum Brands Inc's all-important China division took a hit this summer as businesses there pulled back on parties and events at its upscale Pizza Hut Casual Dining chain amid volatility in financial markets and cooling economic growth.... Read more

Investors soured on Yum Brands stock after the company said Tuesday it's not likely to hit its earnings goal for 2015. The company's stock dropped 17% Tuesday evening, triggered by a lackluster earnings report and news that it's recovery in China is slower than expected... Read more

The Bank of Japan held fire on expanding its already huge stimulus programme Wednesday, despite mounting pressure on policymakers in the face of sluggish growth and stagnant prices. The decision, after a two-day meeting, follows a string of disappointing data that have raised questions about the effectiveness of Prime Minister Shinzo Abe's drive to kickstart the economy, which contracted in the second quarter of the year... Read more

AirAsia's potential management-led buyout faces headwinds... Read more

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