ASB Securities Morning Brief for Wednesday, 20 May 2015
Wednesday, 20 May 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares fell, led by Spark NZ and paced by SkyCity Entertainment Group and Xero, before the March 31 earnings season. Infratil rose. The NZX 50 Index fell 15.548 points, or 0.3%, to 5757.162. Within the index, 23 stocks fell, 20 rose and seven were unchanged. Turnover was $114 million... Read more

The New Zealand dollar gained after the Reserve Bank's survey of inflation expectations showed firms raised their projections for consumer prices in the coming two years, ahead of the latest GlobalDairyTrade auction, which will provide a gauge on the health of the country's biggest export. The kiwi rose to 74.18 US cents at 5pm in Wellington from 73.73 cents at 8am, and little changed from 74.33 cents yesterday. The trade-weighted index was at 76.38 from 76.29 yesterday... Read more

New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher... Read more

Lower fuel costs drive down NZ producer input, output prices in first quarter... Read more

Healthy lifestyle property market: REINZ. More sales but slightly lower prices were recorded in the lifestyle property market in the three months to April, compared to the same time the year before. There were 11 more sales over the period – 1707 this year compared to 1696 the year before... Read more

Stats support John Key's house price claims under Labour... Read more

The Labour Party has come out swinging against National's property speculation tax changes, saying it's not enough to stop the average Auckland house price reaching $1m by 2017. Housing spokesman Phil Twyford said Quotable Value figures showed a 63 per cent increase in average house prices in Auckland since National came to power in November 2008... Read more

One in five homes in fast resale. Most Auckland properties sold within two years of purchase are "do-ups" being renovated by young couples working their way up the property ladder rather than investors, a mortgage broker says... Read more

ANZ says there could be a rush of property listings in the next four months and the Auckland housing market could be at a turning point... Read more

First homebuyers told not to get their hopes up with Budget... Read more

House price rises creating a generation of renters... Read more

Rural property prices defy dairy downturn but fewer listings. PGG Wrightson real estate general manager Peter Newbold says prices of farms on a per hectare basis remain as healthy as 12 months ago.... Read more

Westpac could join a mortgage-rate battle after Kiwibank and ANZ slashed their rates amid rising competition in the home-loan market. And there's more good news for borrowers, with a banking expert saying rates may track lower, possibly below 5 per cent.... Read more

Budget 2015: student loans – does the government dare to act?... Read more

Finance Minister Bill English says there will be no new initiatives to address poverty in tomorrow's Budget New Zealand - despite the Prime Minister suggesting otherwise last month... Read more

FSPR crackdown. The Financial Markets Authority has confirmed a number of offshore firms have been removed from the Financial Services Provider Register (FSPR).... Read more

Ministry needs to better understand disputes schemes: FSCL. If financial advisers think that disputes about their work are going to go away and the four external resolution schemes will disappear, then they are mistaken... Read more

NZ export log prices hit 3-year low; may start picking up as demand improves... Read more

Adverts give false reflection of farming - Fed Farmers dairy chairman... Read more

With tourism aiming to topple dairy as the nation's biggest export earner, a tourist industry group wants more thought given to where funding is spent rather than wanting more direct cash from the Budget.... Read more

Rubicon renews ANZ facilities, issues $US7m in notes to shareholder, board. Shares of Rubicon last traded at 31c, although they have fallen some 74% since their peak at $1.21 in March 2011... Read more

NZ Bus operating profits fell to $34.2 million in the March year, down 14 per cent from $40m in the previous year, as Wellington flatlined and Auckland passenger numbers moved up. Operating profits were down $5m because of some one off initiatives to lift productivity and some non-recurring costs from de-commission trolley bus contracts, according to NZ Bus parent company Infratil.... Read more

Infratil expects its 68 percent owned utility Trustpower to sell down its stake in the now completed Snowtown wind power project in South Australia to fund other emerging renewable energy opportunities in Australia, said Infratil chief executive Marko Bogoievski... Read more

Infratil signals cautious new investment approach, announces 2nd special dividend... Read more

Xero tops Forbes list of World's Most Innovative Growth Companies for second year in a row... Read more

Fletcher seeks rezoning for quarry land. An application by New Zealand's biggest listed company to have its 15.2ha Three Kings Quarry rezoned for about 1500 residences is before independent planning commissioners in Auckland this week. Fletcher Residential, a division of Fletcher Building, has applied to change the zoning of the quarry land on Mt Eden Rd so it can go ahead with a high-density development which involves neighbouring public land.... Read more

China's tourism market, which is officially expected to be worth over $2.6 billion to New Zealand by 2021, is growing into an increasingly diversified business with package tours increasingly shunned in favour of independent travel, say delegates to New Zealand's Trenz annual tourism conference in Rotorua... Read more

Wellington Airport will see up to $100 million of investment in the coming year and while a new hotel is likely too, it is not certain yet. The airport is also considering a 300 metre runway extension which may cost more than $300m, with a resource consent application possible next year. But first up is a $60m terminal extension which should be finished by 2016.... Read more

Auckland Airport has teamed up with TripIt to introduce an app that will help visitors move through the airport... Read more

Vodafone is taking a proactive approach to developing future technology talent with a new twist on its apprenticeship programme. The company will be offering eight full scholarships for a technology-based Level 5 or 6 Diploma or Certificate to school leavers who have completed their NCEA Level 2 with Maths, English and a Science subject. The selected students will be sponsored for two years of full time study, which will include at least one day a week ‘on the job’ at Vodafone... Read more

Spark staff outnumber its protesters. Spark chief executive Simon Moutter says he is encouraged by the public's response to its campaign to cut copper broadband costs, denying it had failed to create a groundswell. Just under 3000 people have submitted their name and email address to a campaign website, Read more

NZ workers more likely than Aussies to take pay cut for chance at bonuses... Read more

Business NZ boss Phil O'Reilly to leave at the end of year... Read more

Trust Management Property Team wins RICS award... Read more

The Financial Markets Authority says it is looking into New Zealanders who help foreign firms sign up on a local register of financial services providers and even act as directors, giving the entities a veneer of respectability they can cash in on overseas... Read more

Rod Petricevic is now the only failed finance company boss still in jail, despite the former Bridgecorp chief receiving a lighter sentence than two other disgraced directors... Read more

A former Rockforte Finance director has been released from prison less than 18 months into his sentence. Nigel O'Leary, 58, was convicted and sentenced to four years’ jail after pleading guilty to nine charges in late October 2013, which led to investors losing $3.8 million... Read more

'A bad day for justice': Kim Dotcom takes to Twitter to deny John Banks' accusations. Kim Dotcom has criticised yesterday's Court of Appeal decision acquitting John Banks of knowingly filing a false electoral return. Mr Dotcom claimed two donations of $25,000 each were discussed during a lunch at his Coatesville mansion... Read more

Crown appeals Dotcom's asset release... Read more

The Serious Fraud Office has charged a former border immigration officer and his accomplice with corruption and bribery over accepting $26,500 in bribes to help people with immigration. Meng Yam Lim, also known as Peter Lim, appeared before the Auckland District Court today, charged with four counts of corruption and bribery, while Kooi Leng Pan has been charged with four counts as party to the same offences, the white collar crime fighter said in a statement... Read more

Opinion - David Hargreaves: Auckland's mystery housing market... Read more

Australian Headlines

Australian Market Report: Australian stocks closed lower for a second day as resource and consumer stocks weakened and an earlier rally after Reserve Bank meeting minutes were released ran out of steam. At the 4.15pm (AEST) official market close, the benchmark S&P/ASX200 index was 43.7 points, or 0.77 per cent, lower at 5615.5, while the broader All Ordinaries index slipped 40.6 points, or 0.72 per cent, to 5619.4.... Read more

The Australian dollar was little changed today despite the RBA declaring it continues to have a bias to lower interest rates over time. In the minutes of its May 5 policy meeting, when it cut its cash rate target to a record low 2 per cent, the bank noted that it hadn’t provided markets with forward-looking policy guidance at the time of the cut. But it added that this wouldn’t limit its ability to adjust policy again at future meetings. At 5pm (AEST), the Australian dollar was trading at US79.97c, compared with US80.12c at the same time yesterday.... Read more

Consumers shopping, but it's not because of the budget... Read more

The Reserve Bank remains open to further interest rate cuts, despite concerns about booming house prices in Sydney and Melbourne... Read more

Australia hasn't experienced an economic recession since the year Disney first released Beauty and the Beast. The Land Down Under has bragging rights as the only advanced economy not to record a recession since 1991, according to International Monetary Fund data... Read more

Bank regulation to favour owner-occupiers could mean cheaper home loans... Read more

As fears grow of a bubble in Sydney's soaring housing market, one economist says there are already signs demand for residential property is starting to wane. UBS Australia chief economist Scott Haslem says Sydney's record high auction clearing rates and the rapid price growth in the past three years meant the market could be considered to be in a bubble... Read more

Fast-food giant McDonald’s is facing criticism over allegations it uses “aggressive strategies” to slash its global tax bill, with its Australian tax payments potentially being shaved by almost half a billion dollars as a result. The report, Golden Dodges: How McDonald’s Avoids Paying it Fair Share of Tax, was released overnight by a coalition of global trade unions and alleges the fast-food giant uses its franchising model to generate most of its revenue through royalty payments with these payments then siphoned into offshore tax subsidiaries... Read more

Prime Minister Tony Abbott distances himself from proposed iron ore inquiry days after backing calls... Read more

Barnett cool on iron ore inquiry. Colin Barnett has revealed Federal Treasurer Joe Hockey telephoned him about the prospect of a parliamentary inquiry into the iron ore industry last week and the Premier told him he “didn’t think it was a good idea”... Read more

The latest streak of red sessions in iron ore is starting to cause many to question the sustainability of the recent rally above $US60 a tonne, with the commodity falling further below that mark in offshore trade. At the end of the latest session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at a new two-week low of $US58.40 a tonne, down 1 per cent from its prior close of $US59.00 a tonne... Read more

The federal government body responsible for monitoring the scaled-back renewable energy target scheme believes it's possible to reach the new 2020 goal. However, Industry Minister Ian Macfarlane is concerned the sector could fall short of producing enough clean energy to meet the bipartisan target of 33,000 gigawatt hours... Read more

BHP Billiton spin-off South32 has retained the momentum from its second session on the ASX in offshore markets, with its stock in London and Johannesburg surging on positive analyst comments. South32 endured a rough debut on the ASX as it retreated from an open of $2.13 a share to $2.05 by Monday's close, which was at the lower end of the range in which it was tipped to trade... Read more

Anglo-Australian mining giant Rio Tinto and Mongolia agreed a multi-billion-dollar expansion of a vast copper and gold mine, officials said Tuesday, ending a two-year dispute as Ulan Bator seeks to restore its foreign investor appeal... Read more

Vimy Resources to outline capital raising... Read more

Andrew Forrest has accused global iron ore giants BHP Billiton and Rio Tinto of pressuring the federal government to change its tune on a parliamentary inquiry into the commodity. But if the government won't act, independent senator Nick Xenophon has signalled he will not only seek a Senate inquiry in June but bring forward his own legislation to change competition rules in the mining sector... Read more

Chevron warns on Aust LNG sector... Read more

Buxton Resources granted pre-open status by ASX... Read more

Metals X has backed Aziana’s reinvention as a tech play by underwriting the company's plan to fund a reverse takeover of BrainChip. The former explorer is seeking to raise $4 million to affect a backdoor listing of BrainChip, which is developing technology that aims to mimic the processes of the human brain... Read more

Australian agribusiness Ruralco has posted a record interim profit, as its live exports business buoys the group in the face of tough drought conditions. Ruralco posted a net profit after tax for the six months to March 31 of $10.5 million — more than double the same period last year, when the group recorded a net profit of $5.1m... Read more

Agribusiness Ruralco has more than doubled its half year profit and expects growth to continue if weather conditions prove favourable. Revenue from each of the company's divisions - which include live export, water services and rural supplies - was higher than a year ago, despite some challenging weather, Ruralco said. Ruralco shares were up 30 cents, or 8.57 per cent, at $3.80.... Read more

Graincorp is expanding its malt production in the US north west to capitalise on a craft beer boom. The capacity of the company's Great Western Malting facility in Idaho will be increased by 120,000 tonnes to an annual output of 220,000 tonnes by mid-2017, at a cost of $US75 million ($A93.86 million)... Read more

Suncorp reacts to APRA’s housing crackdown with squeeze on investor-loan incentives, while juicing homeowner offerings... Read more

Mobile virtual network operator Yatango has lured three big names in the telecommunications industry to its board ahead of its impending initial public offering (IPO). iiNet founder Michael Malone, ActewAGL founder John Mackay and Virgin Mobile founder and former T-Mobile CEO Tom Alexander were today announced as the three new Yatango board members... Read more

Australian billionaire James Packer has admitted the slump in revenues in Macau has been more severe than anticipated as China's anti-corruption campaign hits sentiment in the region. Mr Packer said it is difficult to know how the corruption crackdown will ultimately impact Macau where Crown Resorts derives nearly half of its earnings from Melco Crown through a 34 per cent stake... Read more

Bega Cheese issues profit warning... Read more

Mining explosives firm Orica has ended its two-month search for a new chief executive by appointing its interim CEO to the role permanently. Alberto Calderon has been acting in the role since late March, when combative former chief Ian Smith left the company... Read more

Prophecy International maintains sales growth of SNARE software... Read more

Thousands of investors are bracing themselves for widespread losses following the collapse of one of Australia's biggest broking firms, BBY. Stock brokers who used BBY — run by executive chairman Glenn Rosewall, son of tennis great Ken, who also is on the board — to clear trades have been collectively left millions of dollars out of pocket... Read more

Thousands of Uber drivers across the nation will have to register for GST by August 1, which could mean the cost of rides taken by consumers on the popular ride-sharing service rises by 10 per cent. The Australian Taxation Office has confirmed that people who provide ride-sharing services such as Uber are providing "taxi travel" under GST law.... Read more

Opinion - Michael West: Pfizer is a tax fizzer. There were predictions the budget would save as much as $5 billion from the Pharmaceutical Benefits Scheme (PBS) over five years... Read more

International Headlines

U.S. Market Report:... Read more

North/South Americas Market Report: Markets were lower across the region as at the most recent closing prices... Read more

European Market Report: European markets finished broadly higher today with shares in Germany leading the region. The DAX is up 2.23% while France's CAC 40 is up 2.09% and London's FTSE 100 is up 0.38%... Read more

Asian Market Report: Asian markets finished broadly higher today with shares in China leading the region. The Shanghai Composite is up 3.13% while Japan's Nikkei 225 is up 0.68% and Hong Kong's Hang Seng is up 0.37%... Read more

Oil prices were mixed in Asia on Tuesday as a global glut and soft demand overshadowed the impact of geopolitical tensions in the crude-rich Middle East, analysts said. US benchmark West Texas Intermediate (WTI) for June delivery gained ten cents to $59.53 while Brent crude for July eased eight cents to $66.19 in afternoon trade.... Read more

Royal Dutch Shell remains optimistic about the future of the oil price, despite its dramatic slump in recent months, senior executives said at the company's annual general meeting in The Hague... Read more

Oil to be plentiful until middle of next decade says Goldman Sachs... Read more

Hillary Clinton punts question on Obama-backed Pacific trade deal. Hillary Clinton declined to take a yes-or-no position on the proposed Trans-Pacific Partnership, a 12-nation trade deal being sought by President Barack Obama... Read more

US hedge funds continue to dump Apple stakes. While Icahn claims company is "dramatically undervalued". Top US hedge fund management firms continued to reduce or slash stakes altogether in Apple during the first quarter, as shares of the iPhone maker rallied.... Read more

Apple stock losing to AT&T since Dow swap... Read more

Dick's Sporting Goods Inc. shares DKS, slumped 4.1% after the sporting good retailer reported a fiscal first-quarter profit at the high end of expectations. For the quarter ended May 2, net earnings fell to $63.3 million, or 53 cents a share, from $70 million, or 57 cents a share, in the same period a year ago... Read more

Wal-Mart Stores Inc on Tuesday became the latest U.S. retailer to report weaker-than-expected quarterly sales, saying consumers were pocketing tax refunds and savings from cheaper gasoline rather than buying unnecessary items. Shares of the world's largest retailer, whose earnings just missed analysts' estimates and whose forecast range for the current quarter was largely below expectations, were down 4.2 percent at $76.56 in morning trading.... Read more

Bitcoin just reached another milestone in its road to legitimacy... Read more

Greek debt deal within next week, says Varoufakis... Read more

UK house prices accelerated with a 9.6% increase in the year to the end of March, according to official figures. A lack of homes on the market is thought to be behind the rise at a time when activity was expected to have been curtailed by the election campaign... Read more

High street retailer Next has been hit with a £22.4m tax bill after a court found that it diverted profits made in the UK to offshore havens to avoid paying tax. The ruling, which HM Revenue & Customs (HMRC) said could open the door to £130m of recouped losses from other firms, followed a successful challenge to a tax avoidance scheme called a rate-booster... Read more

The main measure of UK inflation turned negative in April for the first time on record, with the rate falling to -0.1%. It is the first time Consumer Price Index (CPI) inflation has turned negative since 1960, based on comparable historic estimates, the Office for National Statistics said... Read more

Deutsche Bank warns U.K.: Don't leave European Union... Read more

Pernod prepares to take Cuban-made rum to the United States... Read more

Cashing out: millions 'disappear from China bank accounts'. A businesswoman deposited the equivalent of almost US$2 million at a branch of China's largest bank but only US$20 remained after most of it was transferred without her authorisation, state media reported... Read more

Japanese airbag maker Takata has declared mechanisms in the airbags of almost 34 million motors defective. It will lead to the largest recall in US automotive history, affecting models from 11 carmakers... Read more

Tata Motors’ New Nano Automatic Costs 269,000 Rupees... Read more

Opinion - Mark Hulbert: A stock market top is likely near as investors fail to hedge... Read more

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