ASB Securities Morning Brief for Saturday, 28 March 2015
Saturday, 28 March 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose, paced by Fonterra Shareholders' Fund as the stock rebounded from a record low. Outside the benchmark index, Hallenstein Glassons advanced after reporting a 40 percent jump in first-half profit. The NZX 50 Index rose 21.08 points, or 0.4 percent, to 5854.248. Within the benchmark index, 22 stocks rose, 19 fell and nine were unchanged. Turnover was $106 million... Read more

The New Zealand dollar gained against its Australian counterpart on sliding prices for iron ore exported to China, that nation's biggest market, while traders await a speech by US Federal Reserve chair Janet Yellen on Friday in the US. The kiwi rose to 97.13 Australian cent as at 5pm in Wellington, from 96.98 cents yesterday. It was little changed at about 75.80 US cents... Read more

Concern over leaked TPP premature. Alarm at the provisions of a leaked draft of the investment chapter of the Trans-Pacific Partnership agreement is premature to say the least, says Stephen Jacobi, executive director of the New Zealand International Business Forum... Read more

Singaporean Govt's property-buying spree in NZ reaches $1.2b... Read more

Inflation target at 2% risks overheated economy, says BNZ... Read more

Property prices impact on S&P’s assessment of NZ banking sector. A plunge in property prices is a key risk factor for banks in New Zealand, according to a new report from Standard & Poor’s... Read more

The Timaru District Court has handed down a hefty fine to Harcourts Timaru for rental property safety failings – leaving an investor advocate to urge caution on the part of landlords.... Read more

Investors who want to trade equity options now have a local alternative. NZX equity options will launch on April 24. It follows the introduction of the NZX20 Index futures contracts in June last year. NZX will initially launch option contracts on ordinary shares in Fletcher Building, Spark NZ and Trade Me. Options on more stocks will follow.... Read more

New Zealand crossbred wool, which accounts for the majority of New Zealand's production, fell to a two month low at the South Island auction yesterday amid a stronger local currency and weaker buyer demand... Read more

Fonterra move hits prices. NZX dairy futures drop sharply in response to co-op’s plan to put more product up for auction... Read more

Fonterra has announced it will increase the amount of milk powder for sale on the GlobalDairyTrade platform, which is likely to depress prices at the next auction on April 1.... Read more

A South Taranaki organic farmer is welcoming Fonterra's decision to expand its organic milk business. The dairy giant has just announced it's committed to long-term development of its organic milk supply to meet rising demand... Read more

Wine industry says increased MPI fees would threaten exports. The Ministry of Primary Industries’ proposal to impose higher costs on the wine industry poses a major threat to the sector and in particular its export business, says Wanaka-based Principal Alistair King from Crowe Horwath... Read more

Hallenstein Glasson, the fast fashion clothing chain, lifted first half profit 40 percent, beating its guidance, as it clawed back market share in a competitive retail environment. Profit rose to $8.6 million in the six months ended Feb. 1, up from $6.2 million a year earlier, the Auckland based company said in a statement. Shares of the company advanced 5.3 percent to $3.40, and have gained 2.9 percent since the start of the year. ... Read more

Panasonic's shares jumped after the company forecast profit will climb 23 per cent next fiscal year to the highest since 2008 on demand for housing and car information and entertainment systems. The stock was trading 3.2 per cent higher yesterday at 1576 ($17.45)... Read more

The future of a new training bike has been put to a community vote on the crowdfunding platform Kickstarter. Main backer Philipp Schacht said the trainer was better than other stationary units because it used the chain of the bicycle to transfer power to the fan "for immediate, non-slip resistance". This allowed riders to improve their performance by simulating real-life bike motion... Read more

New Zealand Shippers Council Position on Auckland Ports planned reclamation works. The Council has over the last few weeks observed with some dismay the public debate that has been taking place regarding the Port of Auckland's proposed extension to it's Bledisloe Wharf facility... Read more

Viaduct zoning battle draws big guns. Top property experts lead fight against council’s Unitary Plan proposal.... Read more

Wynyard Precinct Holdings, a joint venture between Goodman Property Trust and Singapore government owned GIC, has agreed to buy an office tower in Auckland's Wynyard Quarter from Fletcher Building for $86.2 million. Goodman Property shares fell 0.4 percent to $1.185 and have gained 23 percent in the past 12 months... Read more

Innovation needed to halt grim future for Hastings retailers. Stores going out of business and others relocating to new premises outside of the central business district, along with a general lack of interest in main street retailing has seen Hastings city retail occupancy continue to drop over the past year.... Read more

Failed Feltex case costs litigation funders $3.1M in costs, before disbursements... Read more

Cat food linked to slavery ring. Kiwi cat owners who buy their moggies Fancy Feast or Iams branded food may have unwittingly supported a slavery ring in Southeast Asia. An AP investigation this week revealed slaves had been forced to work in the fishing industry under brutal conditions including beatings and imprisonment ... Read more

The former director and owner of a media placement agency, The Media Counsel, has been found guilty of fraud charges relating to $1.8 million in payments to media suppliers and client invoices. Glenda Mary Wynyard, 49, has been found guilty in the Auckland District Court today of 11 out of 13 Crimes Act charges laid by the Serious Fraud Office... Read more

IRD targets Trade Me members. Inland Revenue flexing its legal muscle to trawl through private information on companies’ customers in hunt for tax evaders.... Read more

Opinion - Gareth Morgan: Why farmers should oppose dairy conversions... Read more

Opinion - Mike O'Donnell: Trigger-happy GST critics miss bullseye.... Read more

Opinion - Brian Gaynor: Our small NZX and why liquidity matters... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket shrugged off geopolitical worries to close higher, recovering some of the previous session’s losses when the bourse posted its biggest one-day fall in more than three months. At the 4.15pm (AEDT) official market close, the benchmark S&P/ASX200 index was up 40.8 points, or 0.69 per cent, to 5,919.9, while the broader All Ordinaries index added 39.2 points, or 0.67 per cent, to 5,888.9.... Read more

The Australian dollar slipped as uncertainty over the timing of US central bank interest rate hikes drove “puzzling” market moves. At 4pm (AEDT), the local currency was trading at US78.05, down from US78.18 cents yesterday. At noon today, the dollar had reached as high as US78.29 cents.... Read more

Economist Steen Jakobsen calls on RBA to dull razor to avoid bursting housing bubble... Read more

Australian business links with Indonesia threatened by Bali Nine row... Read more

Is buying a property within your self-managed super fund a good idea?... Read more

Superannuation balances above $2.5m in firing line. Pressure is mounting on the government to change the rules that allow wealthy people with millions of dollars in superannuation savings to access their money in tax-free lump sums. The tax white paper, to be released on Monday, is expected to put the issue squarely on the agenda, as debate already rages about other changes to super rules proposed by the financial system inquiry... Read more

Australia’s banks, the world’s most profitable, have stared down Treasurer Joe Hockey by failing to cut interest rates on credit cards.... Read more

Aussie shoppers are stuck in their ways. Australians are a very loyal bunch, with 60 per cent rarely venturing beyond 10 different stores and online shops.... Read more

Forget the pollsters, what about the billions of dollars tied up in NSW Government bonds? As one of the two Australian states that has held the AAA-credit rating following the global financial crisis – Victoria being the other – NSW government debt is highly sought after by fixed interest fund managers.... Read more

New research from Oxford University has named Australia's most polluting coal-fired power stations and warns of the risks they pose to the economy and the environment.... Read more

The Australian iron ore industry is poised for a major shake-up as the global glut worsens and margins continue to tighten. The nation's biggest iron ore miners, Rio Tinto and BHP Billiton, are still making money and expanding production, but questions remain about the viability of their heavily indebted rivals Fortescue Metals Group and Gina Rinehart's Roy Hill project... Read more

Chevron is selling down its entire 50 per cent interest in Caltex Australia in what is the largest block trade in Australian history. Shares are being sold via a bookbuild priced at $34.20 carried out after market in a deal fully underwritten by Goldman Sachs. Caltex shares have closed at $37.88 and the deal represents a discount of at least 9 per cent.... Read more

Can Palmer's empire strike back? Clive Palmer's business empire is feeling the pinch with a drop in iron ore prices and this week's $3 billion writedown of his prized asset, the Sino Iron project in Western Australia. Mr Palmer's Chinese partner and mine operator CITIC announced in Hong Kong on Tuesday a larger-than-expected "impairment" against the troubled Pilbara project... Read more

Triton Minerals managing director Brad Boyle has increased his interest in the company by 100,000 shares through the exercise of 100,000 unlisted options at $0.10 each. Shares in TON are currently trading at $0.36... Read more

Rio cuts into M&A team: report... Read more

Fortescue CEO Nev Power backs Andrew Forrest's call for production cap; Baosteel critical. Fortescue is standing by its idea for a cap on iron ore production, despite serious criticism from major customers and an investigation by Australia's competition watchdog.... Read more

Gina Rinehart says other countries will supply iron ore if Australia cuts back. Gina Rinehart has rejected a suggestion from the chairman of Fortescue Metals Andrew Forrest that big mining companies should collude to cap iron ore production... Read more

Forte Energy has unveiled the acquisition of a majority stake in the Olympic Domain project, close to Australia’s mega-mining projects... Read more

EnergyAustralia has been fined $1 million for the second time in a year over its aggressive salespeople.... Read more

Admedus Limited non-executive director exercises options... Read more

Vodafone Australia has signed long-term managed services partner Nokia Networks to continue running the telco's network operations for four more years. Nokia Networks has provided managed services for VHA since 2006. It also supplied the telco with a 3G network in 2004... Read more

Seven media mogul Kerry Stokes takes on new industry battles. As he enters his 75th year, has "the man from nowhere" lost his golden touch?... Read more

Medical device company dorsaVi has made it’s the first sale of its ViMove Live Assessment and Monitoring applications into the public health system in England and Northern Ireland... Read more

Skydive the Beach's founder believes social media is making the young and the very old want to jump out of a plane. Chief executive Anthony Boucaut has seen his tandem skydiving company reach for the sky with a spectacular share market debut, which saw its value surge by $10 million within the first 10 minutes of listing on Friday.... Read more

Optus has admitted to three data breaches affecting more than 300,000 customers and promised the Australian Privacy Commissioner it will complete an independent review of its IT security systems and implement any recommendations... Read more

GoCatch accuses Uber X of tax evasion... Read more

Second CommBank IT exec charged in bribery scandal... Read more

Opinion - Alan Kohler: Assistant Treasurer Josh Frydenberg seems keen to change the financial planning regulations, which would hopefully move the industry away from sales and more to actually helping clients, writes Alan Kohler... Read more

International Headlines

U.S. Market Report: U.S. stocks were flat on Friday, with the S&P 500 on track for its worst week since late January, ahead of a speech by Federal Reserve Chair Janet Yellen that could create a volatile close on Wall Street. Healthcare stocks helped buoy indexes with biotech stocks .NBI bounced 1.8 percent higher after suffering a 7-percent drop in the prior four sessions, while energy .SPNY was the worst performing S&P sector as crude prices resumed their decline.... Read more

North/South Americas Market Report: North and South American markets are mixed. The S&P 500 is higher by 0.30%, while the Bovespa is leading the IPC lower. They are down 3.61% and 0.16% respectively... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The CAC 40 gained 0.55% and the DAX rose 0.21%. The FTSE 100 lost 0.58%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 0.24%, while the Nikkei 225 led the Hang Seng lower. They fell 0.95% and 0.04% respectively... Read more

Oil down as Iran deal eyed; U.S. crude in for best week in four years. Benchmark Brent oil and U.S. crude were down about 3 percent in New York because of reduced threats to Middle East oil facilities and traffic from the Saudi-led air strikes in Yemen. Brent showed a $1.60 decline at $57.59 a barrel by 1:14 p.m. EDT (1714 GMT). U.S. crude slid $1.65 to $49.78.... Read more

Oil prices fell in Asia Friday, cutting short a recent rally as investors weighed the potential for disruptions in Middle East supplies caused by the Yemen crisis and a global crude glut, analysts said. US benchmark West Texas Intermediate for May delivery fell $1.02 to $50.41 and Brent crude for May eased 95 cents to $58.24 in afternoon trade... Read more

After oil-price collapse, North Dakota no longer has lowest unemployment rate... Read more

Gold logs first fall in 8 sessions... Read more

U.S. consumer sentiment falls in March but above forecasts... Read more

The U.S. economy’s tepid performance last quarter — a 2.2 percent annual growth rate, the government said Friday — was typical of the economic rebound that began in the summer of 2009... Read more

Federal Reserve Vice Chairman Stanley Fischer on Friday suggested that hedge funds deserve greater scrutiny from federal regulators. In a speech in Frankfurt, Germany, Fischer said that there was a clear trend toward reduced vulnerabilities in the nonbank financial sector in the U.S., but that hedge funds were an exception... Read more

Chair Janet Yellen said she expects the Federal Reserve to raise interest rates this year, and that subsequent increases will be gradual without following a predictable path... Read more

Senate passes Republican budget with deep safety net cuts. The Senate passed a Republican-authored budget plan early on Friday that seeks $5.1 trillion in domestic spending cuts over 10 years while boosting military funding.... Read more

Goldman Sachs became the top commodities bank last year, overtaking rival JP Morgan, a consultancy said on Friday.... Read more

Google and Johnson & Johnson partner up for hi-tech surgery... Read more

Ford Motor Co Chief Executive Officer Mark Fields made $18.6 million in salary and other compensation last year, below the $23.2 million that predecessor Alan Mulally received in 2013, the company said on Friday. Last year's compensation for Fields, 54, was for half the year as CEO and half as chief operating officer. For 2013, he made $10.2 million as COO. Ford shares closed on Thursday at $16.01, compared with $15.25 a year ago.... Read more

The founder and former chief executive of American Apparel Inc Dov Charney, plans to file a lawsuit claiming $40 million in damages for breaches of his employment contract, and more lawsuits are planned, his attorney said on Friday. The company's shares were down 2.8 percent at 69 cents in late morning trading on Friday... Read more

Willie Nelson, the country singer-songwriter (and well-known consumer of cannabis), has revealed plans to launch a branded chain of marijuana dispensaries and related products, including signature strains of pot. Dubbed “Willie’s Reserve,” the brand is expected to start formulating plans in the next year. Nelson spokesman Michael Bowman told The Daily Beast that the operation is going to “be something that’s reflective of (Nelson’s) passion” for cannabis. At a time when legalized marijuana is already a $2.2 billion business, Nelson is far from the first celebrity to eye the branded cannabis model. Last year, the family of reggae legend Bob Marley announced plans to create a line of pot products, including “heirloom Jamaican cannabis.”... Read more

Canadian mobile phone firm Blackberry has posted better-than-expected fourth-quarter earnings, but its revenues showed a larger-than-expected drop. It reported net profit of $28m (£18.8m), against a loss of $148m a year earlier... Read more

Central banks call for lower capital requirements on top-quality pooled debt. Bonds based on high-quality loans should benefit from lower capital requirements to kick-start the market in Europe, the Bank of England and European Central Bank (ECB) said on Friday.... Read more

Royal Bank of Scotland (RBS) has sold Coutts International, the overseas arm of the private bank, to Switzerland's Union Bancaire Privee (UBP). A spokesperson for Coutts International said both parties had agreed not to disclose the price of the deal. The bank has been owned by RBS since 2000, managing assets of more than $30bn (£20.2bn)... Read more

The chief executive of the troubled Co-operative Bank is being handed a potential £5m pay deal, sparking a row as he prepares to axe more jobs and close another swath of branches... Read more

Varoufakis resignation rumor denied by Greek Ministry of Finance... Read more

British retailer Marks & Spencer is expected to report an improving trend for its non-food business as it starts to put its online distribution problems behind it, despite a drop in sales for the 15th quarter in a row. Marc Bolland, CEO since 2010, has spent billions of pounds addressing decades of under-investment at M&S, overseeing the redesign of products, stores, logistics and its website. But a new clothing team he set up in 2012 has so far failed to deliver a sustained increase in sales... Read more

UK house prices rose by 0.1% in March, according to the latest figures from Nationwide building society, but in some parts of the country prices are lower than at the start of the year... Read more

Andorra will create a 'bad bank' to group the assets of Banca Privada d'Andorra linked to illicit activity, it said late on Thursday, as the principality battles to rebuild the reputation of its banking system... Read more

Brazil's economy grew 0.1% in 2014... Read more

Petroleo Brasileiro SA, the state-controlled company at the center of Brazil’s biggest corruption scandal, agreed to sell oil and natural gas fields in southern Argentina to billionaire Eduardo Eurnekian’s Corporacion America, two people with knowledge of the deal said... Read more

Brazilian police arrest another executive in Petrobras probe... Read more

Israel is to stop withholding tax revenues collected on behalf of the Palestinian Authority (PA), a move that has crippled the Palestinian economy. Prime Minister Benjamin Netanyahu said the "deteriorating situation in the Middle East" and rise of extremists required him to "act responsibly"... Read more

Samsonite International, the world's biggest luggage maker, attributed its record China sales last year to the company's wide range of brands aimed at travelers with varying budgets and tastes. Its next target: tourists at airports... Read more

French oil company Total is to receive $15 billion in Chinese credit to contribute to the financing of a $27-billion LNG plant on Russia’s Yamal Peninsula in cooperation with the Russian natural gas producer Novatek. This is the first time that Beijing has issued credit on such a large scale... Read more

China's securities regulator said on Friday it would let mainland mutual funds invest in Hong Kong shares via the Shanghai-Hong Kong Stock Connect. The move may gave some support to the cross-border trading scheme, which has seen dwindling interest from investors... Read more

China's big banks double their write-offs. Faced with growing numbers of bad loans, China's biggest banks are ramping up efforts to get rid of them.... Read more

Japanese inflation stalled in February with a key measure of prices flat for the first time in nearly two years, data showed Friday, weighed by a plunge in oil rates and tepid consumer spending. The dismal figures come after Bank of Japan chief Haruhiko Kuroda acknowledged this month that dragging the country out of years of deflation was proving to be "very challenging", and he warned that inflation may temporarily fall to zero... Read more

Ford Makes a Billion-Dollar Bet India Can Become an Auto-Export Powerhouse. Ford Motor Co. on Thursday opened a new factory in western India, more than doubling its capacity in the country as it makes a billion-dollar bet that Indian exports can power its push to sell more affordable vehicles around the world.... Read more

Analysis - Drew Harwell: Why investors like AOL co-founder Steve Case are betting big on food... Read more

Analysis - Jan Strupczewski: Neither Grexit, nor Grexident. Euro and 'drachma' in parallel? Greece is unlikely to exit the euro, either intentionally or accidentally. But it might be forced to introduce an alternative means of payment, in parallel to the euro, to pay some domestic bills if a reform-for-cash deal with its creditors is not secured soon, several euro zone officials said... Read more

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