ASB Securities Morning Brief for Thursday, 04 February 2016
Thursday, 04 February 2016

New Zealand Headlines

New Zealand Market Report; New Zealand shares fell as weaker commodity prices weighed on equities in countries dependent on exports of raw materials. Synlait Milk, A2 Milk, Kathmandu Holdings and Air New Zealand declined, while Precinct Properties rose. The S&P/NZX 50 Index dropped 46.7 points, or 0.8 percent, to 6133.38. Within the index, 34 stocks fell, nine rose and seven were unchanged. Turnover was $161 million... Read more

The New Zealand dollar gained against its Australian counterpart as data indicated a stronger labour market and after Reserve Bank governor Graeme Wheeler talked down the chances of another interest rate cut. The kiwi rose to 93.04 Australian cents at 5pm in Wellington from 92.14 cents yesterday. The local currency advanced to 65.37 US cents from 64.89 cents at 8am and 65.24 cents yesterday... Read more

Flexibility key to RBNZ policy. Responding to low inflation with immediate interest rate cuts is not the way to go, the Reserve Bank says... Read more

RBNZ’s Wheeler confronts OCR critics. Governor says will interpret 1-3% inflation target flexibly in defiant speech; says won’t be ‘mechanistic’ about cutting rates just because CPI inflation below 1-3% target; Auckland still a financial stability risk... Read more

Reserve Bank governor Graeme Wheeler says cutting rates 'not mechanical'... Read more

NZ new car sales hit record in January on demand for commercial vehicles... Read more

New Zealand unemployment unexpectedly fell to near a six-year low in the final three months of 2015 as people left a labour market flooded by strong migration and as employers took on more workers... Read more

Economists question sharp drop in NZ unemployment rate... Read more

Auckland loses ground. Ongoing house price strength in the regions sees Central Otago overtaking Auckland in the latest data. House prices in Central Otago are soaring as the region hit an average asking price of $861,723 in January 2016, according to the specialist property website... Read more

The Trans-Pacific Partnership agreement at a glance... Read more

Retirement Income policy a month-by-month approach. Retirement Commissioner Diane Maxwell says getting the public on side is the most important aspect of developing retirement income policy... Read more

A rural business analyst says it looks as though New Zealand has an over reliance on whole milk powder, as world dairy prices slump again but exports of high-value products like butter, cream and yoghurt from this country buck the trend... Read more

Key downplays dairy price slump. PM says 15% dairy price fall this year linked to lower oil prices, which helps consumers; says RBNZ will be monitoring dairy prices; says no need to exclude foreign land buying from TPP as NZ can still impose big taxes on buyers, but no plans to for now... Read more

Dark days for dairy farmers amid falling prices... Read more

Analysts have welcomed Fletcher Buildings' $315 million Higgins Group acquisition, lifting their valuations on the shares and earnings estimates for the Penrose-headquartered business... Read more

After rejigging its constitution, Harmoney Corp raised almost $8.8 million in a preference share issue. The constitution readjustment included halving the level of new money it has to raise before going public... Read more

Wynyard Group shareholders will vote on granting the board more freedom to issue shares in two weeks after a downturn in global markets took the sheen off its existing plans to raise capital. The Auckland-based company will hold a special general meeting where it will ask shareholders to ratify a placement in June last year, according to its notice of meeting... Read more

The Commerce Commission has given clearance for Rheem New Zealand Limited to acquire the business and assets of Peter Cocks (2010) Limited. Both Rheem and Peter Cocks are involved in the manufacture and supply of hot water heaters to plumbing and building merchants... Read more

Lyttelton Port of Christchurch (LPC) is officially opening a new $85 million wharf in a move that will double its container capacity over the next decade and brace it for future competition. Cashin Quay wharf 2, and an adjacent storage area for 1200 twenty-foot containers, were designed to handle a new generation of larger container vessels... Read more

Briscoe forecasts 18% profit lift in full-year profit... Read more

Investing with P2P. We've looked at the P2P from the perspective of borrowing - but how about if you want to invest? Less than two years ago there were none. Now there are four.... Read more

Internet service firms hard to contact and difficult to swap, Consumer NZ says... Read more

Two of New Zealand's biggest internet and mobile providers have been slammed in a customer satisfaction survey. Vodafone and Spark received the lowest ratings for overall satisfaction in a Consumer New Zealand survey of 8600 of its members views of their providers.... Read more

The new owner of Intagr8 is hoping to offer some relief to struggling customers after a merger with the NZ Technology Group. Intagr8 sold bundled telecommunications deals to about 2500 businesses, which received call credits to offset the cost of phone equipment rented through finance companies... Read more

The Labour Party has urged Talley's Group to resolve the five-month dispute between Affco and Wairoa meatworkers, saying it is causing severe financial hardship for the employees, their families and the local community... Read more

A total of $35 million in student debt was wiped in the last financial year because of death and bankruptcy. That was a jump of $11m on the previous year, and the Ministry of Education has put it down to an ageing population, inflation and faster processing times by Inland Revenue... Read more

The liquidators of David Ross' Ponzi scheme have netted $446,000 after settling with three investors who got money out of the Wellington fraudster's money-go-round before it collapsed. They have also launched legal action another two investors who refused to enter into "standstill" agreements with them... Read more

A woman who stole almost $800,000 from a top school is being chased by SkyCity for more than $1.2 million in "unexplained transactions" from when she worked at the company's Hamilton casino. The casino company has lodged a complaint with police about Tessa Grant, 40, who this year pleaded guilty to defrauding Waikato Diocesan School for Girls out of $795,000 to fund her high rolling lifestyle... Read more

Seagar's liquidators report not good reading for creditors... Read more

Opinion - George Friedman: George Friedman sees banking problems that need to be solved in Europe & Asia with the fear of loss of deposits 'stalking countries'... Read more

Australian Headlines

Australian Market Report: Australian shares followed international markets deep into the red today in its worst performance this year, after plunging oil prices increased concerns about global economic growth. At the 4.15pm (AEDT) official market close, the benchmark S&P/ASX200 index was down 116.5 points, or 2.33 per cent, at 4876.8, while the broader All Ordinaries index was off 113.2 points, or 2.24 per cent, at 4930.8.... Read more

The Australian dollar has dipped as investors favour its kiwi counterpart and tumbling global oil markets continue to spook traders. At 1700 AEDT on Wednesday, the local currency was trading at 70.21 US cents, down from 70.70 US cents on Tuesday.... Read more

Trade deficit of $3.5b in December, fourth worst on record... Read more

Malcolm Turnbull is facing calls from nervous coalition backbenchers to steer the tax debate away from the GST and onto state and federal tax cuts. The calls come as Labor leader Bill Shorten rejected a suggestion from former prime minister Paul Keating that a modest hike in the GST to specifically fund hospitals could be justified... Read more

netwealth tops list as most functional platform. netwealth, one of Australia’s largest privately owned wealth management groups, has been named as the highest rated investment platform in terms of overall functionality in Investment Trends’ 2015 Platform Report. This comes just months after netwealth was named as the winner of overall user satisfaction award in the Investment Trends 2015 Planner Technology report for the third year in a row.... Read more

Attorney-General George Brandis has poured cold water on crossbench calls for a national corruption body.... Read more

The company directors' lobby has lashed an industry sponsored review of boards in the non-profit super sector, led by former Reserve Bank boss Bernie Fraser, arguing it lacks independence, transparency and proper process... Read more

House price growth is expected to slow dramatically in the year ahead, with one of the big four banks slashing its predictions for all capital cities. National Australia Bank expects overall capital city house prices to rise by just one per cent in 2016, a downgrade from its previous forecast of 2.3 per cent... Read more

The first profit reporting season of the year has begun with some analysts predicting the lowest growth since the start of the global financial crisis nearly a decade ago. Four of Australia's five biggest companies are the big banks. They are a proxy for the health of the economy and also heavily exposed to the ailing resources sector... Read more

Tech giants lease up Sydney and Melbourne CBD... Read more

A decline in property investment and foreign buyer activity is expected to reduce house price growth to just 1 per cent over the next two years. National Australia Bank's latest residential property survey, taken in late 2015, shows sentiment and expectations amongst real estate market participants at +1... Read more

Building approvals soar, led by apartment rebound... Read more

The Perth apartment construction boom shows no signs of abating with developer Finbar trumpeting a development approval for its $50 million Harper Terrace project in South Perth... Read more

NAB survey tips WA house prices to fall... Read more

A company owned by controversial mining magnate Nathan Tinkler has come up with the money to buy a disused coal mine near Aberdeen, in the New South Wales Upper Hunter. Australian Pacific Coal has told the Australian Stock Exchange it has raised the needed finances to acquire an 83.33 per cent interest in the Dartbrook mine... Read more

Australia’s oil and gas sector is continuing to cop a hiding as oil prices fell more than 5 per cent overnight, sparking further credit fears... Read more

A controversial India-backed project to develop a huge coal mine near Australia's Great Barrier Reef was Tuesday one step closer to fruition after Queensland state authorities gave it environmental approval. Adani Enterprises' Carmichael coal mine, set to be one of the world's biggest, has faced numerous hurdles. The need for state and federal consent -- along with legal challenges by conservationists -- has stretched the approvals process to five years... Read more

Atlantic Ltd has struck an agreement with its major shareholder to buy the group’s mothballed Windimurra vanadium mine in WA’s Midwest from insolvency practitioners, a year after the project was put into administration... Read more

Shares in Carnavale Resources soared after it announced a $1.6 million raising, priced at a premium to its last traded price... Read more

Clydesdale Bank shares have risen on their London market debut, with investors welcoming the float following its last-minute delay. By midday, National Australia Bank’s UK spin-off had lifted to 188.75 pence ($3.87) per share from its IPO price of 180p ($3.69), paring gains slightly from an intra-day high of 189p... Read more

Commonwealth Bank is expected to unveil another record first-half profit next week when it becomes the first of the big four to report results since last year's out-of-cycle mortgage rate hikes... Read more

Indian enterprise software provider Ramco is looking carve out a share of the human capital management market in Australia, hoping that its emphasis on ease of use and responsive design helps it steal market share from the likes of SAP and Oracle... Read more

How the failure of Masters could help Bunnings succeed in the UK... Read more

Ansell has slashed its profit expectations by almost 10 per cent, blaming poor economic conditions for discouraging its customers from buying its protective equipment. The $3 billion company is well known for its condoms, but makes the majority of its earnings from supply gloves and other protection to industries such as oil and gas, manufacturing and healthcare... Read more

Biotech TBG Diagnostics has had a positive start to trading on the share market after changing the nature of its business and raising funds. TBG, formerly Progen Pharmaceuticals, now focuses on providing in-vitro diagnostic products - tools used to diagnose and detect diseases or infection in a controlled environment... Read more

Cheap fruit leaving a sour taste in farmers’ mouths. As Coles and Woolworths battle it out for their market share and the price of fresh produce gets cheaper and cheaper, consumers are cheering. But if you knew the true value of that piece of fruit, would you pay more?... Read more

LWP Technologies management is expanding its investment support for the company on the heels of more lab work demonstrating the commercial potential of LWP scalable proppant technology for the oil and gas industry. LWP chairman Siegfried Konig has purchased 3.3 million shares on market at A$0.006 per share... Read more

A West Perth-based medical marijuana company has leased part of a US crop so it has skin in the game when it seeks cultivation licences in California... Read more

Westfield ditches SMS feature over privacy issues... Read more

Government healthcare reviews and rhetoric about wasted spending and pointless treatments have spooked doctors and their patients, who are shying away from hospital procedures and crimping growth for private hospitals. The slowing growth in surgeries, as shown by Medicare data, has been confirmed by three of the biggest non-profit private hospital operators and is set to fuel investor concerns about listed companies Ramsay Health Care and Healthscope... Read more

One of the US Navy warships built by Austal struggled to defend itself against small boats in trials and has been deemed “unreliable” by the Pentagon’s chief weapons tester. The annual report of the Office of the Director, Operational Test and Evaluation, said the flaws were evident when littoral combat ship USS Coronado engaged with small swarms of fast attack boats... Read more

Outrage as govt suggests fibre carriers 'may' cut corners. The federal government has accused parts of the new housing industry and the mostly fibre-based telcos that service it of being tempted to roll out substandard infrastructure to save money... Read more

Opinion - Malcolm Maiden: Malcolm Turnbull was right, the way to fix the tax system is to broaden it... Read more

International Headlines

U.S. Market Report: U.S. stocks retreated as the bear market in financial shares deepened amid a litany of global growth concerns. Crude rallied past $31 a barrel in New York, while the dollar plunged to a three-month low versus the euro after disappointing services data. The Standard & Poor’s 500 Index headed for its first three-day slide in four weeks as bank shares plunged 2.6 percent. Equities briefly pared declines after earlier sinking with the dollar after data showed services industries expanded at the slowest pace in nearly two years. Banks dragged European equities to a third day of declines. Crude rallied more than 6 percent after its biggest two-day plunge in seven years... Read more

North/South Americas Market Report: North and South American markets are mixed today. The Bovespa is up 2.08% while the IPC gains 0.29%. The S&P 500 is off 0.90%... Read more

European Market Report: European markets finished sharply lower today with shares in Germany leading the region. The DAX is down 1.53% while London's FTSE 100 is off 1.43% and France's CAC 40 is lower by 1.33%... Read more

Asian Market Report: Asian markets finished broadly lower today with shares in Japan leading the region. The Nikkei 225 is down 3.15% while Hong Kong's Hang Seng is off 2.34% and China's Shanghai Composite is lower by 0.38%... Read more

Russia ready to meet OPEC's key players... Read more

Market now predicts ZERO Fed hikes in 2016... Read more

U.S. auto sales fared better than expected in January as the industry continued to benefit from low gasoline prices, easy credit and moderate economic growth, major automakers said on Tuesday. Sales were down 0.3 percent at 1.15 million vehicles, Autodata Corp said, better than the expected decline of between 0.5 percent to 5 percent forecast by analysts polled by Reuters before Tuesday... Read more

General Motors reported the best profit margin in its 107-year history in 2015, just six years after the company was saved by a federal bailout. The nation's largest automaker benefited from strong car sales in both the United States and China, where it now sells more cars than it does at home... Read more

Elon Musk has bigger problems than "super rude" customers and exploding SpaceX rockets. Tesla's stock has crashed and burned too. Tesla stock is down more than 25% so far this year. It hit its lowest level since February 2014 on Wednesday... Read more

US car giant Ford has announced plans to cut jobs and save $200m (£138m) a year in Europe. The carmaker said it was launching a voluntary redundancy programme and improving manufacturing efficiencies... Read more

Yahoo Inc said on Tuesday it would consider "strategic alternatives" for its core Internet business and cut about 15 percent of its workforce, even as it continues with its plan to revamp the business and spin it off. The announcement is the strongest sign yet that the board and Chief Executive Marissa Mayer may be willing to sell the struggling Internet business - essentially websites, email and online search - under growing pressure from impatient shareholders... Read more

Yahoo! Inc. Chief Executive Officer Marissa Mayer’s latest flip-flop may be her last. Mayer long argued that with the right amount of adjustments -- product improvements here, cost cuts or acquisitions there -- she could put the company back on a path to growth. She unveiled the latest turnaround effort Tuesday, saying she’ll cut about 15 percent of the Web portal’s staff, shutter some offices and units and exit product lines... Read more

Documents show profit-seeking behind price hikes at Turing, Valeant. A decision by Turing Pharmaceuticals to increase profits by raising the price of a lifesaving drug by 5,000 percent drove some patient co-pays up to $16,000, according to excerpts of documents that congressional committee members made public on Tuesday... Read more

Ansell flags fall in FY earnings... Read more

Meritor Inc. fell to its lowest price in almost three years after the maker of parts for commercial and military trucks said that the dollar’s strength damped sales during its most recent quarter. Revenue in its fiscal first quarter ended Dec. 31 fell 8 percent to $809 million, missing the $845 million average of eight analyst estimates compiled by Bloomberg... Read more

The UK's dominant services sector maintained its growth in January, according to the latest PMI survey. The Markit/CIPS index put the sector at 55.6 last month, barely changed from December's reading on 55.5. Any figure above 50 suggests that output in the sector is expanding... Read more

Europe's system of open borders is on the brink of collapse, a crisis that would deal a hefty blow to the region's still fragile economy. The return of border checks and passport controls could cost Europe as much as 100 billion euros ($110 billion) over a decade, a new study has found... Read more

Lloyds Banking Group to cut 1,755 jobs and close 29 branches Bank is looking to lower costs as it prepares for privatisation, despite George Osborne delaying sale of remaining shares to public... Read more

UK-based artificial intelligence firm SwiftKey has been acquired by Microsoft, the company has confirmed. The Financial Times reports the deal is worth $250m (£174m). SwiftKey is known for its predictive keyboard, which can be found installed on millions of smartphone devices... Read more

Universal Credit leaves working families worse off, IFS says... Read more

German Note Yield Drops Below Minus 0.5% as Rally Gathers Pace... Read more

Sterling forward inflation swaps, a gauge of price expectations, have given up most of 2015’s gains as the slowdown in China and a continued slump in oil prices are adding to disinflationary pressures... Read more

HSBC's Asia Bet Pays Off in Fee Windfall as ChemChina's Adviser... Read more

LVMH's shares rose 4.5% on Wednesday after it posted record sales last year despite weakness in China, although profits were less than expected. The world's biggest luxury goods group said sales rose 16% in 2015 to €35.67bn (£27bn). Like-for-like sales rose 6%. The company owns a host of the world's most famous brands, including Louis Vuitton and Christian Dior... Read more

China is buying foreign firms at a record rate... Read more

A giant Chinese chemical company is betting the farm on agriculture. State-owned ChemChina said Wednesday it has offered a whopping $43 billion for the Swiss company Syngenta, a huge global supplier of pesticides and seeds.... Read more

SUVs rev up at Delhi auto show despite pollution crackdown... Read more

India's accelerating growth revs up car sales... Read more

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