ASB Securities Morning Brief for Monday, 13 April 2015
Monday, 13 April 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose, led by Pacific Edge after a report about its medical testing products was published in a prominent medical journal. Genesis Energy and MightyRiverPower fell as investors looked to book recent gains. The NZX 50 Index rose 0.186 points, or 0.003 percent, to 5847.356. Within the index stocks were mixed as 17 rose, 22 fell and 11 were unchanged. Turnover was $94.6 million... Read more

The New Zealand dollar rose to a record against the euro as Greece's looming debt payments, subdued economic data and quantitative easing by the European Central Bank weakened the common currency. The kiwi rose as high as 71.15 euro cents and traded at 70.89 cents at 5pm in Wellington from 70.10 cents late yesterday. It rose to 75.70 US cents from 75.51 cents.... Read more

Weak inflation dims prospects of surplus - English... Read more

The man who talked up New Zealand's "rock star" economy a year ago, HSCB Chief Economist Paul Bloxham, says it's still rocking despite lower dairy prices and increasing salary freezes. New Zealand's economy was the fastest growing in the 34-nation OECD last year... Read more

Poor take-up of long term mortgages. Homebuyers want 30-year mortgages, but are reluctant to sign up for longer-term fixed rate mortgage loans, new Reserve Bank figures show. While both the Bank of New Zealand and TSB are offering fixed interest rates for seven and 10 years respectively, Reserve Bank figures show mortgage loans fixed for five years or more account for just 0.02 per cent of the $200,154 million of home loans currently outstanding... Read more

As Auckland City corporates move on up to flash new glass high-rise towers nearer the waterfront, their dated, cast-off offices are being gratefully snapped up by people wanting to make them their homes. A growing number of city-fringe office blocks are being converted for new lives as luxury apartments.... Read more

Auckland deputy mayor Penny Hulse is calling for a cross-party accord on Auckland housing because “it’s too important to score political points on”... Read more

Finding the right KiwiSaver fund for you... Read more

MediaWorks is going into the live entertainment business. The radio and television company is expanding to become a promoter, bringing big name music shows, sporting events, exhibitions and stage shows to New Zealand. Initial promotions will include the Ice Age exhibition, an NFL ice hockey team and the Celtic Girls musical show... Read more

A Wellington city councillor has called for the government to set up a fund of half a billion dollars to help pay for earthquake strengthening of inner-city buildings. Iona Pannett says her heart goes out to the hundreds of apartment owners in central Wellington who are struggling to stay afloat as they face rising bills for repairs and insurance... Read more

NZ bank profits down slightly on record Sept quarter, margins still healthy... Read more

General insurance industry making its highest profits in nearly a decade. Customers of New Zealand general insurers are getting the least bang for their buck in at least a decade. Last year general insurers (not life and health) parted with the smallest portion of money they received through premiums, to pay for claims, since at least 2004 (when started collecting this data)... Read more

Auckland Council letter calls for halt on wharf extensions. Auckland's port has been told in no uncertain terms to stop work on two contentious wharf extensions until a year-long study on its operations can be completed. Ports of Auckland's council owner, Auckland Council Investments Ltd (ACIL), says it is "disappointed" with the port's level of engagement over its controversial expansion plans... Read more

Massey University is planning to spend more than $130 million in the next year to double the student capacity of its Albany campus and help create an innovation hub in Auckland. The bulk of the $130 million project will be taken up with the construction of a new science and innovation research centre, which would be one of the largest in New Zealand... Read more

Naming rights, leasing opportunities emerge at media company’s new HQ. In what is likely to be one of the biggest office leases of 2015, half the available space in Manson TCLM’s new 20,000sq m building at 151 Victoria St West in Auckland’s CBD has already been taken ahead of its completion... Read more

Smartphones store-owners' new friend? Could high-tech loyalty schemes designed in New Zealand help save the global retail industry? In the United States, where the retail industry was perhaps hit hardest by the global financial crisis and the trend towards internet shopping, desperate times have resulted in an appetite for innovative measures... Read more

Occupancy at Auckland hotels reached a record high in what has been described as a golden summer for tourism... Read more

'Godfather of NZ legal highs' plots crowd-funded comeback. Matt Bowden says he’s developing a safe legal high to be on the shelves in NZ in two to three years. The Stargate International co-founder, sometimes called "the godfather of NZ legal highs" because of his company's role releasing the first local party pill, says he plans to crowd-fund the millions needed to pay for safety testing the new product. He claims investors will get at least 30% return on investment.... Read more

New rules for natural health. Claims made about the benefits of natural health products such as vitamins will need to be backed by evidence under a new system. An industry body has hailed the move and says it will help the banning of products such as the "miracle" Ebola cure recently sold by a "health and healing" church... Read more

Sir Peter Williams QC was made Knight Companion of the NZ Order of Merit for services to the law on Saturday, in what was described as a moving ceremony. His investiture, first announced in the New Year Honours list, had been scheduled for May. Sir Peter has terminal cancer... Read more

Opinion - Jo Doolan: Better times are on the way for taxpayers... Read more

Opinion - Bernard Hickey: Door closes on Gen Rent: The proof is in the figures... Read more

Australian Headlines

Australian Market Report: THE Australian market looks set to open flat after Wall Street rose as the minutes from the Federal Reserve’s last policy meeting show a split on the timing of a US interest rate rise. At 0645 AEST on Thursday, the June share price index futures contract was up five points at 5,964... Read more

The Australian dollar has lost ground after the US currency rallied on the back of increased rate hike expectations and solid jobs data. The Aussie dollar was worth US76.86c at 4pm (AEST) today, down from US76.99c yesterday... Read more

Get used to high Kiwi dollar. Australians are going to have to get used to New Zealanders going on about how much better their economy is. Paul Bloxham, the HSBC economist who first called New Zealand a rock star economy, says the New Zealand dollar is going to be strong for some time because the NZ economy is strong.... Read more

RBA must use 'dwindling ammunition' to cut interest rate to 1.5%. The Reserve Bank of Australia will be forced to fire its "dwindling ammunition" and cut interest rates to 1.5 per cent within 18 months, according to the Royal Bank of Canada... Read more

The value of loans to housing investors has fallen for a second straight month, potentially giving the Reserve Bank room to cut rates without overheating the property market. The value of total housing finance fell 1.0 per cent in February, with a 3.4 per cent fall in approvals for investment housing, Australian Bureau of Statistics figures show... Read more

A change in the way the Commonwealth Grants Commission treats WA's iron ore royalty revenue will cost the State a whopping $664 million of GST next year if Federal Treasurer Joe Hockey follows its recommendations. In its GST methodology review released last week, the CGC has departed from its previous treatment of WA's royalties from iron ore "fines"... Read more

A growing number of voters say they would now support an increase in the rate of the GST, following a year in which the tax has been a simmering political issue. The latest Fairfax-Ipsos poll shows a steady rise in support among the general population for a GST hike, with more than one in three Australians now supporting an increase... Read more

Childcare rebates could be denied to anti-vaccination parents under new Federal Government laws... Read more

India trade a slow road. As Colin Barnett pumped the flesh from Mumbai to New Delhi this week, it was readily apparent that the new frontier of West Australian trade would take time, persistence and strategic planning to crack... Read more

Australia's manufacturing sector wants urgent action to address the "severe threat" to manufacturing posed by rising gas prices... Read more

The huge gap in gas supply for the LNG market in Queensland has evaporated, according to Australian Energy Market Operator. In its statement of opportunities the AEMO said the desperate need for gas into NSW has also disappeared as the national economy slowed, business closed and industry and consumers switched suppliers... Read more

BHP Billiton has refused to provide profit figures for its Singapore business, amid allegations it and Rio Tinto are shifting profits there to avoid tax. BHP and rival Rio Tinto have confirmed to a Senate inquiry they are being audited by the Australian Taxation Office over the use of Singapore marketing hubs to allegedly reduce their tax bills.... Read more

Industry shudders after Atlas shutdown... Read more

Atlas Iron's decision to suspend production highlights pressure in sector, analysts say. With low iron ore prices claiming their first significant Australian casualty, speculation has turned to which miners could be next. Atlas Iron yesterday announced it was progressively stopping production on all projects due to the commodity's low price, putting nearly 600 jobs in Western Australia in doubt... Read more

Red Mountain Mining managing director Jon Dugdale now has once again increased his indirect stake in the company through on-market purchases, and now holds 8 million shares. Dugdale acquired another 709,750 for $2,839. Red Mountain is trading up 33.3% intra-day to $0.004. In February, Dugdale bought 1 million shares for $3,650... Read more

The State Government will move to introduce legislation to save about 600 jobs in Mt Isa by allowing the ageing smelter owned by Glencore to continue to operate. Under current legislative arrangements, the smelter operates under a temporary licence, known as Transitional Environmental Program, and would close next year... Read more

Cassini Resources granted halt pending study update... Read more

Telstra and NBN Co have settled a pricing dispute worth $200 million out of court after pulling out of scheduled court hearings this week.... Read more

Etherstack has won a competitive tender process to supply tactical communications equipment to the Australian Federal Police.... Read more

JustKapital Litigation Partners has been granted a trading halt by the ASX, with its shares placed in pre-open.... Read more

Time zone shift favoured by business in South Australia but opposed by some west coast residents. South Australians are debating whether to shift the state to the eastern time zone, move it back 30 minutes for a time zone halfway between east and west, or do nothing and stay 30 minutes behind eastern time. A period for public feedback has ended and the SA Government is considering more than 2,500 submissions... Read more

Opinion - Callum Pickering: Housing's momentum is starting to stutter... Read more

Opinion - Michael West: Microsoft HQ's Bill Sample shows Senate inquiry where the power lies... Read more

International Headlines

U.S. Market Report: U.S. stocks rose Friday, notching their second weekly gain in a row, as General Electric Co.’s plans to exit most of its lending operations buoyed the Dow industrials and S&P 500. Though stocks climbed higher during the week, volume and volatility was muted across the stock market. The Dow and the S&P 500 haven’t had a daily 1% move so far this month, and equity-trading volumes have been below average in recent sessions.... Read more

North/South Americas Market Report: North and South American markets finished mixed as of the most recent closing prices. The Bovespa gained 0.76% and the S&P 500 rose 0.52%. The IPC lost 0.07%... Read more

European Market Report: European markets finished broadly higher on Friday with shares in Germany leading the region. The DAX is up 1.71% while London's FTSE 100 is up 1.05% and France's CAC 40 is up 0.60%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 1.94% and the Hang Seng rose 1.20%. The Nikkei 225 lost 0.15%... Read more

Gold bugs might have their day in 2016. Judging by the gloomy commentary and headlines, there isn’t much cause to recommend gold as an investment option in the near term--a far cry from 2013 when some analysts had boldly predicted that gold would trade at $2,000. That exuberance hasn’t been justified, so far. Gold for June delivery GCM5 was looking to snap a three-day losing streak on Friday and was up marginally $5.50, or 0.5%, to $1,199.30 an ounce in Friday trade, after falling $9.50 and settling at $1,193.60 an ounce on Thursday.... Read more

U.S. Pump Prices Fall With Refiners Running at Decade High. Retail gasoline prices declined for a second time since a March peak in the Lundberg Survey as U.S. refineries ran at the highest seasonal rates in a decade... Read more

Saudi Arabia is struggling to maintain its share of the global oil market in a contest that pits the world's largest crude exporter against traditional allies in the U.S. and Persian Gulf... Read more

These Will Be the World's 20 Largest Economies in 2030. Get ready for a new economic order. In the world 15 years from now, the U.S. will be far less dominant, several emerging markets will catapult into prominence, and some of the largest European economies will be slipping behind... Read more

Citi Economist Says It Might Be Time to Abolish Cash. Would this save the world economy?... Read more

The gamble on Tesla’s gigafactory in the Nevada desert... Read more

GE to sell bulk of finance unit, return up to $90 billion to investors.... Read more

Despite Federal Regulation, C.E.O.-Worker Pay Gap Data Remains Hidden. Investors who take the time to wade through corporate reports on what their top executives are paid are all too familiar with the problem of information overload.... Read more

When Indian Prime Minister Narendra Modi visits Canada next week on the last leg of a trip that also includes stops in France and Germany, he will be looking to court investment and advance prospects of a free trade deal.... Read more

UPS to invest $1.06 billion in Europe: Wirtschaftswoche... Read more

Even if it survives the next three months teetering on the brink of bankruptcy, Greece may have blown its best chance of a long-term debt deal by alienating its euro zone partners when it most needed their support. Prime Minister Alexis Tsipras' leftist-led government has so thoroughly shattered creditors' trust that solutions which might have been on offer a few weeks ago now seem out of reach... Read more

Euro zone officials shocked by Greece's stance: Germany's FAS paper... Read more

Greek finance ministry hits back at German newspaper report... Read more

UK economy poised to welcome deflation for first time since 1960. Falling energy costs and a supermarket price war may force the inflation rate below zero for the first time in more than five decades... Read more

U.K. Prime Minister David Cameron pledged to raise the inheritance-tax threshold for couples to 1 million pounds ($1.5 million) as he seeks to break the opinion-poll deadlock between his Conservatives and the Labour Party less than a month before general elections... Read more

Pound Falls to Five-Year Low as Volatility Jumps Before Election... Read more

General election chaos could trigger 'Lehman moment' for pound. Experts warn that pound could fall to as low as $1.35 against the dollar over the coming weeks, as traders brace themselves for "messy outcome" after May's general election... Read more

BDI industry group sees German growth of 2 percent in 2015... Read more

Julius Baer has not held talks with larger rival Credit Suisse about merging, the Swiss private bank's chief executive said in comments made in the weekly Schweiz am Sonntag. "There have been no such talks," Boris Collardi, head of Zurich-based Julius Baer, was quoted as saying when asked whether the two banks had discussed a tie-up... Read more

Volkswagen sees tensions amid leadership clash. Divisions have emerged in the leadership of German car giant Volkswagen after chairman Ferdinand Piech gave an interview criticising chief executive Martin Winterkorn. Mr Piech told German news magazine Der Spiegel that he had "distanced" himself from Mr Winterkorn, who was widely tipped as the firm's next chairman... Read more

Israeli Drone Maker Has $6 Billion Backlog and a Red-Hot Stock. U.S. military spending may be flat, but that’s not proving to be much of a problem for Israeli defense company Elbit Systems Ltd. That’s because the company, while long dependent on the U.S. for much of its sales, has been shifting its focus to faster growing markets in Asia and Latin America... Read more

Russian Prime Minister Dmitry Medvedev signed agreements on expanding cooperation in industry, railway construction, agriculture and tourism during his recent visit to Thailand.... Read more

The Russians are calling it a miracle. The ruble has been on fire, gaining over 20% against the dollar and 35% against the euro in the last three months.... Read more

Russian KamAZ and Sollers are ready to increase vehicle assembly production in Vietnam, but so far they are hindered by high duties on automobile parts and finished products, which reach 70 percent on certain vehicle categories. Despite this, Russian companies have recently developed an interest in auto production in Vietnam as a launch pad for export to other countries in the region... Read more

China's two biggest insurers are funding the majority of a $500 million commercial real estate project in the United States, a person with knowledge of the deal said, in the latest offshore property investment by China's cash-rich financial institutions. China Life Insurance Co Ltd and Ping An Insurance Group Co of China Ltd have partnered New York developer Tishman Speyer Properties LP in a deal that will see each party invest about $167 million in the first phase redevelopment of Boston's Pier 4, the person said... Read more

China-led AIIB will be lean, clean and green - official... Read more

Modi’s ‘Make in India’ Gets $2 Billion Vote of Confidence From Airbus. On Saturday, Indian Prime Minister Narendra Modi paid a visit to Airbus Group's facilities in Toulouse, France. He was greeted with a vote of support, from the aerospace company’s CEO, for his Make in India initiative to build up manufacturing in the South Asian country... Read more

Opinion - Heather Stewart: Pitt’s rule for non-doms is only one tax that belongs in the dustbin of history. As Labour and Tories argue over repealing legislation passed in 1799, other outdated forms of taxation need to be made clear, simple and fair... Read more

Analysis - Mark Lobel: Amid fears of more bubble trouble, who'd buy in Dubai? Homebuyers in Dubai can choose from an apartment block with interiors encrusted in shiny crystals or multimillion-dollar villas on a man-made island. Is investing in these desert dwellings like playing on quicksand or has the city-state learnt the lessons of its 2008 property crash when it nearly went bust?... Read more

Opinion/Analysis - Noah Smith: How bigotry costs the US economy... Read more

Opinion - William Watts: Here’s how Iran could prevent a rebound in oil prices. Don’t expect fellow OPEC members to cede market share: analyst... Read more

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