ASB Securities Morning Brief for Friday, 24 July 2015
Friday, 24 July 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares fell from a record as investors looked to pocket recent gains after some were disappointed by a smaller interest rate cut than expected. Contact Energy and Meridian Energy fell. The S&P/NZX50 Index fell 26.45 points, or 0.4%, to 5901.3. Within the index, 29 stocks fell, 15 rose and six were unchanged. Turnover was $107 million... Read more

The New Zealand dollar rose after the Reserve Bank cut the official cash rate by a quarter point and called for a weaker currency, while dropping a reference to criteria justifying intervention. The kiwi rose to 66.28USc at 5pm in Wellington from 65.78USc immediately before the release, and 66.16USc yesterday. The trade-weighted index advanced to 70.49 from 70.20 yesterday... Read more

RBNZ cuts OCR, signals 'softer' economic outlook... Read more

Exporters happy with kiwi dollar moves. Manufacturers are welcoming a Reserve Bank cut to the official cash rate and more favourable export conditions than even a few months ago. A lower official cash rate (OCR) can help lower the New Zealand dollar helping the export manufacturers be more competitive... Read more

Little surprise followed the Reserve Bank’s OCR cut this morning - and further cuts are now generally expected to come this year. In a move that was widely forecast, the Reserve Bank cut the OCR by 25 basis points to 3.0% this morning... Read more

Pundits predict OCR fall to 2.5% by end of year... Read more

Why the Reserve Bank cut the OCR today. Reserve Bank governor Graeme Wheeler explains why the Official Cash Rate was cut today... Read more

Some major banks quick to pass on RBNZ's 25-basis point cut to official interest rates... Read more

A Christchurch inner city block of earthquake damaged unit titled apartments is being sold by auction on August 27 'as is where is.' This reflects a growing trend among body corporates, according to Courtney Doig and Paul Vining of Colliers International... Read more

Auckland rents up 7.6% in last year... Read more

Waikato rent prices $8000 lower than Auckland's... Read more

A new website which reveals the properties with the best access to ultra-fast broadband is likely to be a crucial tool in the real estate market, Communications Minister Amy Adams says... Read more

Auckland plan may allow more dwellings on some sections... Read more

The Labour Party is giving conditional support for the controversial Trans-Pacific Partnership, with party leader Andrew Little saying Labour is "pro-free trade" but will only support TPP if it contains "key protections" for New Zealanders. “Labour supports free trade," he said. "However, we will not support a TPP agreement that undermines New Zealand’s sovereignty."... Read more

Light regulation in the New Zealand dairy industry has insulated the wider economy from the sharp decline in prices for the country's largest export commodity, according to minister of finance Bill English.... Read more

North Canterbury farmers get reprieve on intensification limits... Read more

New Zealand’s falling dollar made the biggest difference to KiwiSaver members’ account balances over the most recent quarter, research firm Morningstar says... Read more

Comvita, the maker of health products based on manuka honey, has forecast a 35 percent gain in annual earnings and has signalled the exit of its chief executive Brett Hewlett at its annual shareholders meeting. Comvita shares rose 4.4 percent to a record $4.75. That’s 80 cents above its one-for-five rights issue off price of $3.55 per-share last December... Read more

Livestock Improvement Corp, a farmer cooperative that sells bull semen and manages a dairy genetics database, posted its third straight drop in annual profit as lower milk prices weighed on demand for its services and it spent more on technology and infrastructure to be able to deliver new products to farmers... Read more

Briscoe Group's takeover push for outdoor equipment and clothing retailer Kathmandu is gaining momentum. Briscoe managing director Rod Duke said the formal offer documents would be mailed today and Kathmandu shareholders could expect to receive them on Monday. Kathmandu shares closed up 1c yesterday at $1.75. Briscoe shares closed unchanged at $2.80... Read more

PGG Wrightson, the rural services firm controlled by China's Agria Corp, has agreed to buy the assets of Australian seed business Grainland Moree for an undisclosed amount. Shares in Christchurch-based PGG Wrightson rose 2.1 percent to 47.5 cents and have gained 1.1 percent since the start of the year.... Read more

Intueri Education Group, New Zealand's largest private training college, has agreed to buy the New Zealand Institute of Sport for $19.3 million to give it significant scale in the sports and complementary health sectors... Read more

Air NZ and unions collaborate on high performance engagement... Read more

Community-owned electricity networks at major risk from new technology, says English... Read more

City of sales: Cash-strapped council reviews key assets. Stake in Auckland Airport and Ports of Auckland could be on chopping block despite earning $391 million in dividends as ‘everything on table’ in wide-ranging audit... Read more

The government doesn't want to spend any more money or stay any longer in the build of New Zealand's ultra-fast broadband network for fear it might "stuff it", says Finance Minister Bill English. The government wants to extend the UFB programme to 80 percent of the nation's population from its original 75 percent target and has also expressed a desire to extend the rural initiative and improve mobile coverage as well... Read more

Advisers doing no-commission deals. Roughly 3% of risk advisers in New Zealand are operating on a no-commission basis, it has been claimed.... Read more

The role of the country's national film office and international screen business marketing agency, Film New Zealand, will be taken over by the New Zealand Film Commission, Economic Development Minister Steven Joyce and Arts, Culture and Heritage Minister Maggie Barry announced today... Read more

Film Auckland Supports the Combined NZFC and FNZA... Read more

No guarantee Serco's Mt Eden contract will be renewed, Minister says... Read more

Convicted fraudster Alex Swney was declared bankrupt today.... Read more

Building materials manufacturer and supplier Carter Holt Harvey has failed on four out of five counts to have court action taken against it over leaky school buildings thrown out. The Court of Appeal issued its decision today on CHH's appeal against the High Court decision of Justice Raynor Asher that the Ministry of Education's claim on behalf of some 1,400 schools and as many as 5,000 individual school buildings should be allowed to go to trial... Read more

The Serious Fraud Office has laid 39 Crimes Act and Serious Fraud Office Act charges against Mark Lawrence Ivil in the Tauranga District Court relating to $4.28 million he obtained in a period spanning 1990 to 2014.... Read more

Another Global Homes company has gone into liquidation, just as it was to complete a $4 million sale to Housing New Zealand (HNZ). Global Developments Waltham Road Ltd has been building a complex of 12 units for HNZ at 60 Waltham Rd. The company was forced into liquidation on Wednesday by Inland Revenue over tax debts. It was to hand over the complex next week... Read more

Opinion - Joseph Adinolfi: This is the most bizarre move in currencies this week... Read more

Opinion - Ryan Greenaway-McGrevy & Ananish Chaudhuri: Auckland house price crisis - we name the guilty party. There has been a lot of discussion about whether surnames can tell us about the extent of overseas Chinese investment in the Auckland housing market. But forget about the Chens, Wangs and Lis. If you need a surname to attribute Auckland's incipient housing bubble to, it is Deng... Read more

Opinion - Eric Crampton: Auckland's property has hit defcon Homer - we now have a 'crisitunity'. City risks missing the biggest opportunity of the past decade... Read more

Opinion - Brian Fallow: Graeme Wheeler has struck the right note... Read more

Australian Headlines

Australian Market Report: Slumping mining stocks have held back the Australian sharemarket from gaining in today’s session, as weak trade in commodities markets hit the resources sectors. At the 4.15pm (AEST) official market close, the benchmark S&P/ASX200 was down 24.3 points, or 0.43 per cent, to 5590.3, while the broader All Ordinaries index retreated 22.2 points, or 0.4 per cent, to 5581.3.... Read more

The Australian dollar was lower today as concerns over commodity prices such as gold took some steam out of the currency. The Australian dollar was trading at US73.74c at 4.55pm, down from US74.26c late yesterday. Overnight, gold dropped 1.1 per cent to $US1092 an ounce, while oil fell 3.4 per cent to $US49.13 a barrel. Copper, down 1.9 per cent, was also near a six-year low... Read more

Business confidence has jumped to its highest level since September last year, with sentiment improving across all sectors except for mining. National Australia Bank's business survey, released Thursday, rose four points in the June quarter to plus four - its best result since the third quarter of 2014. Business conditions were also better, ticking up one point to four index points... Read more

ANZ raises investor home loan rates 0.27 percentage points... Read more

Macquarie Group has given a strong assurance it will look to raise equity for potential acquisitions, as it adopts more bullish guidance for 2016 putting the company well on its way to return to record profits... Read more

Bill Shorten will lock Labor into taking an emissions trading scheme to the 2016 election when he opens his party's national conference on Friday. The Melbourne conference comes as Mr Shorten is also likely to prevail in his bid for Labor to support boat turn-backs to tackle people-smuggling... Read more

Sydney's average house price has soared through the $1 million mark for the first time... Read more

Clean TeQ Holdings is gearing up to raise capital, with the ASX granting the company a trading halt to prepare... Read more

LNG will take over from iron ore as the main driver of Australia’s exports and will reach $50 billion in value by 2020, an ANZ report says. But the growth is setting up the market for a “dramatic shake-up’’, with prices rising to a point where they will shave up to 20 per cent from the profits of heavy commercial users... Read more

Australia's Fortescue iron ore exports jump 10% despite price slump... Read more

Queensland-focused explorer Hammer Metals has been granted a trading halt by the ASX pending details of a capital raising... Read more

Genesis Minerals raises funds for gold drilling in Western Australia... Read more

BHP Billiton spin-off South32 has tapped Macquarie Capital and Morgan Stanley as defence advisors as rumours of takeover interest continue to simmer, the Financial Times reports... Read more

Construction and contract mining giant CIMIC sees significant opportunities for its mining services operations in the Americas. It also expects to meet its full year profit forecasts. The company's reported net profit of $257.2 million for the six months to June 30 was down 12 per cent on the $291.3 million in the previous year... Read more

The growing public angst about the health effects of sugar is having a major impact on Australia's big soft-drink makers, who are scrambling for alternatives to attract consumers looking to make life a little less sweet. The trend means big bottlers like Coca-Cola Amatil and Pepsi/Schweppes are under pressure to step up investment in healthier beverages as consumers turn their backs on sugary soft drinks... Read more

Telco rivals slam government intervention in Telstra price decision... Read more

Woolworths (South Africa) has confirmed that selling two of its four Sydney and Melbourne CBD David Jones sites is an option to fund the renovation of the remaining two. David Jones has twin stores in the CBDs of both Sydney and Melbourne and, before being bought out by South Africa's Woolworths last year, the department store's management had engaged consultants to look at options to maximise value from the locations, split over four property titles... Read more

Huawei commits to training 100 Aussie students a year. New $30m Sydney training hub to spearhead local expansion... Read more

Cloud services company Decimal Software has signed an agreement to provide advice and compliance solutions to Centrepoint Alliance, one of Australia’s largest non-institutionally owned financial services organisations... Read more

Shares in Fleetwood Corporation surged after the company announced it would had secured $62.2 million from the sale of its Osprey Key Worker Village in Port Hedland and would use the funds to pay off company debt. The WA Housing Authority commissioned Fleetwood to build the 295-dwelling village in July 2012... Read more

Iconic Australian retailer Billabong has its fingers crossed that a new omni-channel platform based on NetSuite technology will allow it to overcome the challenge of disparate data and siloed processes and gain a single view of the customer... Read more

Animals Australia alleges sheep were sold in Kuwaiti market outside approved supply chain... Read more

ASIC slams 'defensive and legalistic' bankers at rate-rigging inquiry. It has the potential to be one of the biggest scandals in Australian financial markets. The investigation into possible rigging of Australia's benchmark interest rates has been going on since 2012, and has seen ANZ suspend seven of its traders... Read more

Opinion/Analysis - Elizabeth Knight: Can Macquarie's millionaires factory make billions?... Read more

Opinion - Warwick Smith: Four tax policies Australian house prices rest on. The issues of tax and house prices are colliding in new ways ahead of the release of the government’s options paper on tax reform later this year... Read more

Opinion/Analysis - video only: Andrew White and David Rogers: Has Macquarie Group found its ceiling?... Read more

Opinion - Andrew Hughes: Mick Fanning's sponsors fail by being noticed after shark attack... Read more

International Headlines

North/South Americas Market Report: North and South American markets are mixed. The IPC is higher by 0.12%, while the Bovespa is leading the S&P 500 lower. They are down 2.21% and 0.36% respectively... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The CAC 40 gained 0.08%, while the FTSE 100 led the DAX lower. They fell 0.18% and 0.07% respectively... Read more

Asian Market Report: Asian markets finished broadly higher today with shares in China leading the region. The Shanghai Composite is up 2.43% while Hong Kong's Hang Seng is up 0.46% and Japan's Nikkei 225 is up 0.44%... Read more

Oil prices were mixed in Asia Thursday, with WTI stuck below $50 a barrel after a rise in US stockpiles added to concerns over a supply glut, analysts said. The US Department of Energy on Wednesday said the country's commercial crude stockpiles rose 2.5 million barrels last week, while supplies at the closely watched Cushing, Oklahoma, hub were up 800,000 barrels... Read more

Supply glut tips oil futures under $49... Read more

Gold is in its worst slump since 1996. So much for predictions that gold would spike to $2,000 an ounce. The yellow metal is in a deep slump. It's down more than 40% from its 2011 peak and crashing back toward $1,000. ... Read more

House price moves around the world. Most of the world's residential real estate markets are powering ahead, but prices in China and Japan are falling. Hover over the map to see how prices are performing where you live.... Read more

U.S. jobless claims lowest since 1973; leading index rises... Read more

There won't be a federal-government shutdown this year, and Congress will work on a temporary spending measure in September, once lawmakers return from their summer recess, House Speaker John Boehner, said Thursday... Read more

New York moves to almost double fast-food workers' minimum wage to $US15 an hour... Read more

US car giant General Motors has reported second quarter profits that have more than trebled to $1.1bn (£720m), driven by North American Chevrolet sales and continued strength in China. Net income rose to $1.117bn from $278m a year ago, when the firm took a big charge relating to recall costs. Its shares rose more than 7% in early trading on the New York Stock Exchange... Read more

Is Caterpillar’s lowered sales outlook really about a strong dollar? Maybe Caterpillar Inc. should stop blaming a stronger U.S. dollar for its woes, and start applauding it. The maker of construction and mining equipment on Thursday cut its full-year sales outlook to about $49 billion from the $50 billion estimate it first provided in January, and reiterated in April. Caterpillar’s stock a component of the Dow Jones Industrial Average tumbled 3.5% in afternoon trade, putting it on course to close at the lowest price since Oct. 7, 2011.... Read more

U.S. health insurer Anthem Inc is close to finalizing negotiations to acquire peer Cigna Inc and could announce a roughly $48 billion deal as early as this week, two people familiar with the matter said on Wednesday... Read more

McDonald's sales plunge. CEO calls results 'disappointing'... Read more

Laws passed, Greece to open bailout talks as recession pushes goals further... Read more

Europe opens antitrust probe into Hollywood studios and Sky TV... Read more

British publisher Pearson is selling its salmon-pink flagship business newspaper, the Financial Times, to Japanese digital media group Nikkei.... Read more

Ferrari is revving its engine ahead of its planned New York stock market debut. Parent company Fiat Chrysler Automobiles announced Thursday it will spin-off the luxury car manufacturer and list shares on the New York Stock Exchange.... Read more

Denmark-Germany undersea Fehmarn tunnel gets go-ahead... Read more

Russia's largest truck producer KamAZ is actively looking for opportunities to enter the Chinese market, company representatives told the Russian media... Read more

Mobile phone chip maker Qualcomm Inc. is far closer to separating into two companies after it bowed to pressure from an activist investor Wednesday, acceding to nearly all demands with plans for a sweeping restructuring and business review. Qualcomm said Wednesday it would cut $1.4 billion in costs, including 15% of its workforce, add three new directors to its board and review its business, all with approval of activist investor Jana Partners LLC... Read more

Hyundai Motor Q2 earnings down 23.8 percent on-year... Read more

The International Monetary Fund on Thursday warned Japan not to rely too heavily on monetary policy, expressing frustration over slow progress in Prime Minister Shinzo Abe's structural overhaul... Read more

Samsung remained the top global smartphone vendor in the second quarter despite slowing sales, while Apple and Chinese manufacturers boosted market share, a survey shows... Read more

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