ASB Securities Morning Brief for Saturday, 15 October 2016
Saturday, 15 October 2016

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose slightly, led by Summerset Group Holdings and Air New Zealand, while Steel & Tube Holdings also gained. The S&P/NZX50 Index rose 13.21 points, or 0.2 percent, to 7,133.26. Within the index, 26 stocks rose, 16 fell and eight were unchanged. Turnover was $111 million... Read more

The New Zealand dollar is heading for a 0.7 percent fall against the greenback this week as the Reserve Bank reminded investors it plans to cut interest rates again, while the Federal Reserve is looking more likely to raise rates in the US. The kiwi fell to 71.05 US cents at 5pm in Wellington from 71.58 cents on Friday in New York last week. It was up from 70.57 cents yesterday. ... Read more

A prominent analyst has issued his second warning over the growing risk of a severe fall in stock markets. In a new report, HSBC's head of technical analysis, Murray Gunn, warns that recent selling on Wall Street has been worryingly broad-based... Read more

The cost of refuelling your car has gone up twice this week, as petrol prices reached their highest point since May. Petrol and diesel prices rose 5 cents a litre following increases at the pump on Tuesday and Thursday, the AA said. A litre of 91-octane was now 196.9c, its highest point since May, while diesel rose to 127.9c a litre... Read more

Interest rates on offer from Kiwi banks are about as low as they are going to go, experts predict. Reserve Bank assistant governor John McDermott told a meeting of the Employers and Manufacturers Association this week that more cuts to the official cash rate were likely. It is at 2 per cent... Read more

The state of the housing market. CoreLogic head of research Jonni Ingerson says the Reserve Bank's lending restrictions are having an impact on the market but property investors are looking for ways around them. Ingerson says the bank's requirements for investors to have a 40% deposit when buying has certainly hit the market... Read more

Methamphetamine contamination has been named as the biggest concern facing New Zealand’s residential property investors.... Read more

Big investors snapping up 15 per cent of Auckland houses, new data reveals... Read more

Details revealed of new 1,200 home development for South Auckland. Work is expected to get underway soon on the first stage of a significant new residential neighbourhood of over 1,200 homes on the edge of the Manukau Harbour... Read more

What you need to know about using KiwiSaver for a first house. Withdrawing money from your KiwiSaver account to help purchase a first home is fast becoming the norm. A recent report from the Financial Markets Authority showed huge growth, year-on-year in the number of people tapping into their accounts to help them get a foot in the door.... Read more

Inland Revenue is looking to bring tax accounting practice regarding farmhouse expenses into line with the law. This is all part of a review of out-dated practices and policies... Read more

Bad weather has taken a heavy and "highly unusual" toll on Fonterra's milk production as the season heads towards its peak, the co-operative said. Fonterra, in its regular statement on the amount of product it intends to put on the GlobalDairyTrade auction platform, said its offer volumes had decreased by a total of 12,116 tonnes... Read more

The Commerce Commission wants Fonterra Cooperative Group to provide greater insight into the sale of reference products other than on the GlobalDairyTrade platform which feed into the regulated milk price. The antitrust regulator released its draft report on Fonterra's 2016/17 milk price manual, which for the first time includes sales outside GDT for whole milk powder, skim milk powder and butter milk powder... Read more

The owner of a herd of cattle seen wandering near an endangered bird habitat will not be punished. However, another farmer who put his cattle onto Environment Canterbury (ECan) land and fenced them into a river is being investigated. The two separate incidents revealed this week have put the spotlight on stock exclusion rules... Read more

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probability of a find was "too low." The Norwegian company will return the two exploration permits for the area it was awarded in 2013 and 2014, and has told the government of its decision, Statoil said in a statement... Read more

New Zealand Oil & Gas has been granted an extension to its Clipper exploration permit for the Barque prospect in the Canterbury Basin, which it says could be bigger than Taranaki's Maui. The Wellington-based company now has until April 10, 2018 to commit to drilling an exploration well, and until June 10, 2020 to drill the well if it goes ahead with the plan. NZOG estimates the Barque prospect is equivalent to 530 million barrels of oil, at least twice that of the Maui discovery that's been operating since the 1970s. NZOG shares last traded at 52.5c, having gained 24% this year.... Read more

New Zealand’s largest refiner and blender of Omega-3 fish oils SeaDragon Limited today announces that it has raised a total of $10.9 million under its one for two renounceable rights issue and shortfall bookbuild, of which just over $2 million was raised as part of the shortfall bookbuild... Read more

The Hill family trust has sold down a tenth of its stake in Michael Hill International, in a move its founder and namesake Michael Hill says will enhance the stock's liquidity following its listing on the Australian stock exchange. The trust, Hoglett Hamlet, sold 16 million shares to a number of unrelated parties for A$25.6 million. It had owned 164.3 million shares, or 42.9% of the jewellery chain and now holds 38.9%. The shares last traded at $1.69 on the NZX, up 69% this year. On the ASX, they last traded at $A1.605, and have gained 28.4% since listing... Read more

Heartland Bank, the NZX-listed lender, has lifted its stake in Harmoney Corp, injecting $4 million of new equity into the peer-to-peer lender. The Auckland-based bank paid about 50.9 cents apiece for almost 787,000 shares, increasing its stake to 13 percent, filings to the Companies Office show. That's the same price as was paid by Stone Ridge Ventures and P2P Global Investments when they pumped $8.8 million into Harmoney in its last capital raise in February... Read more

Stonewood Homes targets South Auckland with Don Ha partnership.... Read more

Scott Technology has reported a record $11 million in full-year pre-tax profits as the industrial robotics firm benefits from rising interest globally in automation as companies seek to reduce costs and boost productivity. The share price is trading unchanged today at $2.10, having risen 53% this year.... Read more

Steel & Tube Holdings will buy Composite Floor Decks, which supplies and installs composite floor decking, for $13.3 million, with a further $3 million possible based on its performance over the next two years. The company has been Steel & Tube’s distributor and installer of composite metal floor decking since 2005, Steel & Tube said in a statement. It had 2016 revenue of $18 million and $4.3 million in earnings before interest, taxation, depreciation and amortisation, while the forecast for the 2017 financial year is revenue of $22 million and ebitda of $5.5 million. Steel & Tube's shares last traded at $2.19, and have fallen 4 percent this year. ... Read more

Fidelity Life is reporting a record year. The insurance company has announced total comprehensive income of $34.5 million in the 2016 financial year, up 37% on the year before... Read more

Major corporates commit to electric vehicle fleet expansion. Thirty of New Zealand's largest companies are committing to at least 30% of their corporate fleets being electric vehicles by 2019. The initiative represents some 1450 vehicles – a 75% increase in the total number of EVs on New Zealand roads today... Read more

Taupo-based wood processor Tenon has applied to the High Court for orders to seek shareholder approval to return $100 million in capital through a share cancellation, as part of Blue Wolf Capital's potential acquisition of its US business. The US$110 million offer from the New York-based private equity firm is pending shareholder approval at the company's annual meeting on Nov. 18. Full details of the proposed sale and capital return and an independent report from Grant Samuel will be distributed to shareholders early next month... Read more

Champion New Zealand brewery Tuatara has sparked outrage in the beer community for trying to trademark a hop variety. The Wellington craft brewer has applied to trademark the name amarillo with the Intellectual Property Office. Amarillo is a United States hop variety used as an ingredient in beer to add bitterness and a citrus aroma... Read more

$70k fine for Yoghurt Story's faux yoghurt. A frozen yoghurt store chain has been handed a $70,000 fine for selling products that weren't really yoghurt. Last year Yoghurt Story pleaded guilty to 63 counts of misrepresenting their "frozen yoghurt" as yoghurt and for making false claims about the health benefits of their product... Read more

The Dominion Post Editorial: NZ richer for Helen Kelly's tireless campaigning. Every country needs campaigners – those who are brave enough to call loudly for change, whatever the chance of success, however powerful the forces of resistance... Read more

Opinion - Brain Gaynor: It's time to put Rubicon shareholders out of their misery... Read more

Opinion - Brian Fallow: How much mortgage is too much?... Read more

Opinion - Shamubeel Eaqub: Getting the most out of contracts. The work of Nobel prize in economics winners Oliver Hart and Bengt Holmstrom is important for the private sector, as well as policymakers wanting the best from public policy... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket finished marginally lower today after jitters over the sharp fall in Chinese trade eased overnight. Wall Street finished down 0.3 per cent last night having pared a one per cent loss, but the S&P/ASX 200 index eased 1.5 points, or 0.03 per cent, to 5434 as firmer Chinese producer price inflation soothed global deflation fears... Read more

The Australian dollar has recovered some lost ground against the US dollar, which came under pressure in the wake of poor Chinese trade data. At 1700 AEDT on Friday, the local unit was trading at 75.77 US cents, up from 75.31 cents on Thursday.... Read more

Economists have turned their focus to oversupply pressures in the housing market, as well as employment and crucial inflation data soon to be released. As the Reserve bank released its half yearly Financial Stability Review, including the usual warning about a looming oversupply of apartments in the big eastern capitals, the UBS economics team stepped back and had a look at housing valuations... Read more

Low growth may be the new norm: Stevens. The former head of the Reserve Bank has warned further cuts in interest rates won’t kick-start the economy without labouring the country with dangerous levels of private debt. Glenn Stevens used the RBA’s annual report to also suggest the eight years of slow growth since the advent of the global financial crisis may be the world’s new norm rather than just an aberration... Read more

Apartment boom risks start showing: RBA... Read more

Australian house valuations hit record high, UBS research shows. Australian house price values have surged to a new record high, growing at the second fastest rate in a study of 23 countries, according to global investment bank UBS... Read more

The Reserve Bank is concerned that low yields could make the commercial property market vulnerable to an exodus of foreign buyers or a rise in interest rates in other countries. Yields on Australian commercial property are higher than in many other markets around the world and that has attracted the attention of foreign investors, especially in Sydney and Melbourne, the RBA said in its half yearly Financial Stability Review on Friday... Read more

Rising house prices are seeing people work less and retire early, and it is not good news for the economy. If you cashed in big from the booming property market, of course you would consider using the wealth gains to work less or retire early. And new research, conducted by the Australian Housing and Urban Research Institute (AHURI), suggests there is a growing number of Australians doing just that... Read more

A surge in debt agreements has heightened concerns that consumers in financial hardship may be exacerbating their problems by adopting expensive techniques of escaping debt. Figures released Australian Financial Security Authority show, while total personal insolvencies in the September quarter have risen by 1.1 per cent over the year, debt agreements are up 7.3 per cent. Over the same time bankruptcies have declined by 3.5 per cent... Read more

It's the big change to home loans that could make interest rate fluctuations a lot more predictable. Tracker mortgages are being hailed as the solution to the frustrating scenario faced by millions of Australian homeowners when the big banks refuse to pass on Reserve Bank rate cuts... Read more

Banks could issue tracker loans, says ASIC. The head of the corporate watchdog has blamed the "oligopoly" of the major lenders for an absence of tracker rate mortgages in the Australian home loan market. ANZ is the only big four bank to have signalled a willingness to introduce trackers, which are pegged to a central bank's cash rate, while its three main rivals have said their sources of funding are not linked to the Reserve Bank cash rate... Read more

Peel Mining has commenced drilling at its Wagga Tank prospect, near Cobar in western NSW.... Read more

Excelsior Gold battles fires on several fronts. The new board and management of Excelsior Gold has laid bare the miner’s myriad problems in an operations update, sending its share price tumbling. Excelsior Gold is battling fires on several fronts including geological uncertainty of its flagship Kalgoorlie North project, production problems, a lack of control over its outsourced milling arrangements and pressure from increasingly nervous financiers. Excelsior shares were off 1.6 cents, or 36.36 per cent, to 2.8 cents at the close.... Read more

Australian Mines has raised $840,000 to fast track its scandium-cobalt assets and to fund ongoing work on its diversified exploration portfolio. The company issued 76,372,837 shares at $0.011 per share... Read more

Paringa Resources Ltd has been granted a trading halt by the ASX this morning, pending drilling results from at the company’s proposed Poplar Grove Mine... Read more

Arowana will buy Evolution Road Maintenance Group subsidiary, Evolution Academy, for $8 million to be paid in instalments... Read more

Salmat launches $15m equity raising... Read more

Latitude Consolidated's drilling is well underway and progressing as planned at Quinns and Mt Ida South gold projects in WAs eastern goldfields... Read more

Rox Resources to update on asset sale. Rox Resources Ltd has been granted a trading halt by the ASX this morning. The company is pending an update on the sale of its interest in the Reward project... Read more

Court orders $12m Roy Hill payout. Spanish engineering company Duro Felguera has won a $12 million payout from the head contractor of the Roy Hill iron project.... Read more

Rinehart redux: Billionaire Gina Rinehart launches fresh tilt to restrict money her children receive. Australia's richest woman Gina Rinehart has started new litigation against her children's trust fund to prevent it from receiving millions of dollars in royalties from a Rio Tinto joint venture... Read more

Wangle Technologies granted an ASX trading halt. Wangle Technologies Ltd has been granted a trading halt by the ASX this morning, with its shares placed in pre-open. Wangle requested the halt as the company is awaiting final approval of the iOS version of the App from Apple so that it can be released into the Apple Store... Read more

Furniture maker and retailer Fantastic has agreed to a $361 million takeover by its larger rival Steinhoff Asia Pacific, the owner of the Freedom and Snooze brands. Fantastic shares soared on news of the deal, gaining 40 per cent, or 98 cents, to $3.43, a three-and-a-half year high... Read more

Global Construction Services will sell its 50% interest in SmartScaff to the remaining shareholders in SmartScaff for $10.5 million in cash... Read more

Telstra's fight to keep mobile network to itself. Australia's telecos finally got back to what they do best this week - publicly sledging each other over competition issues. No wonder the gloves are off... Read more

An emerging brewer with its eyes on China has enjoyed a strong debut on the share market, adding $4.2 million to its value. Shares in Broo soared 40 per cent in their first day of trade, up eight cents from their issue price of 20 cents, taking its market value to $14.8 million.... Read more

Xped has an acquisition on the table. The ASX has granted the company a trading halt to prepare the details... Read more

Star Entertainment Group has been granted a new casino licence by Queensland Government for the integrated resort at Queens Wharf Brisbane... Read more

Adelaide wants to build CBD-wide fibre network for business. Adelaide City Council wants to lay up to 100km of fibre optic cable through its CBD in the hope that a dedicated high-speed network for businesses will lure big organisations back to its streets... Read more

ASIC gagged on life insurance review. The corporate regulator knows of two life insurers that pay staff partly according to how many claims they deny - but is not able to publicly name them... Read more

Opinion - Adele Ferguson: A shame ASIC's report on life insurers not out in the open. In 2014 ASIC head Greg Medcraft told a room full of journalists that Australia was a paradise for white collar crime. Months before he had told a landmark Senate inquiry into the performance of ASIC and the Commonwealth Bank that the corporate watchdog had been too trusting of the big end of town... Read more

Analysis - Elizabeth Knight: The new resources boom - is the party over alreday? Before we all get too excited about an emerging commodities boom Mark 2 - be aware that the smart money is already calling it over. In the last week, headlines screamed about the deficit-improving, economic-boosting prospects that we will enjoy thanks to surging prices for our minerals... Read more

International Headlines

U.S. Market Report: U.S. stocks held modest gains in volatile Friday afternoon trading as investors assessed comments by Federal Reserve Chair Janet Yellen on the U.S. economy. Yellen, in a speech at a conference of policymakers and top academics, laid out the deepening concern at the Fed that U.S. economic potential is slipping - and may need aggressive steps to rebuild it... Read more

North/South Americas Market Report: North and South American markets are mixed today. The Bovespa is up 1.35% while the S&P 500 gains 0.22%. The IPC is off 0.29%... Read more

European Market Report: European markets finished broadly higher today with shares in Germany leading the region. The DAX is up 1.60% while France's CAC 40 is up 1.49% and London's FTSE 100 is up 0.51%... Read more

Asian Market Report: Asian markets finished higher today with shares in Hong Kong leading the region. The Hang Seng is up 0.88% while Japan's Nikkei 225 is up 0.49% and China's Shanghai Composite is up 0.08%... Read more

Russia is planning for low oil prices for years. Russia is betting oil prices will stay low for a long time. President Vladimir Putin's government has just set a draft budget for the next three years based on the assumption Russia will be able to sell its oil for $40 a barrel. That's $10 below current world prices.... Read more

A recession is coming — so hide in gold, says influential investor Raoul Pal... Read more

The Federal Reserve may need to run a "high-pressure economy" to reverse damage from the crisis that depressed output, sidelined workers and risks becoming a permanent scar, Fed Chair Janet Yellen said on Friday in a broad review of where the recovery may still fall short. Though not addressing interest rates or immediate policy concerns directly, Yellen laid out the deepening concern at the Fed that U.S. economic potential is slipping and may need aggressive steps to rebuild it... Read more

And then there were none. Salesforce, the last of the big companies thought to be interested in buying Twitter, said Friday that it has backed out of bidding for the social network. "In this case, we've walked away. It wasn't the right fit for us," Marc Benioff, CEO of Salesforce, told the Financial Times... Read more

Scandal-ridden Wells Fargo isn't opening as many accounts these days. The number of consumer checking accounts opened plunged by 25% in September from the year before, Wells Fargo said on Friday. Openings fell 30% just between August and September, when Wells Fargo shocked Americans by saying it fired 5,300 workers for creating unauthorized accounts... Read more

One bourbon. One scotch. One ETF? Or show me the way to the next whiskey stock? Yup. There's now a fund that is devoted entirely to brown liquor. It's always 5 o'clock somewhere, right?... Read more

Monster Beverage Corp. announced Friday a 3-for-1 split of its common stock, to be effected in the form of a stock dividend... Read more

What to expect from Johnson & Johnson earnings. Wall Street analysts are expecting another strong quarter from Johnson & Johnson, with the company scheduled to report third-quarter earnings Tuesday before the open. This year, Johnson & Johnson has generally performed favorably compared with 2015, when revenue growth decelerated in the face of competition for its hepatitis C drug and earnings declined, according to J.P. Morgan analyst Michael Weinstein... Read more

EU-Canada free trade deal at risk after Belgian regional parliament vote. Wallonia parliament passes resolution against CETA, which requires unanimous agreement of all 28 EU member states... Read more

The UK trader accused of contributing to the 2010 stock market "flash crash" has lost his battle against extradition to the US. The ruling means Navinder Sarao, 37, will be sent to the US within 28 days. He is accused of market manipulation by "spoofing" over a five-year period and of contributing to a 1,000 point fall on the Dow Jones index in New York on 6 May 2010... Read more

Brexit is becoming a big fat mess. It's been the week from hell for those trying to plot Britain's exit from the European Union. The U.K. economy sent new warning signs. EU officials drew a hardline. And the first major legal challenge was filed.... Read more

The U.K.’s exit negotiations with the European Union will be controlled by a select group of 12 ministers that includes all of the most Euroskeptic members of Theresa May’s cabinet, a further sign that the premier may be planning a clean break with the EU. The committee will “oversee the negotiations on the withdrawal from the European Union and formation of a new relationship between the United Kingdom and the European Union; and policy on international trade,” according to an unpublished U.K. government document obtained by Bloomberg... Read more

Carney: Bank of England will tolerate higher inflation for the sake of growth. The Bank of England is prepared to tolerate higher inflation over the next few years and will keep interest rates low to support economic growth, according to Governor Mark Carney... Read more

Nissan chief executive 'confident' after meeting with Theresa May. Carlos Ghosn had warned Nissan could halt investment in its Sunderland plant if UK imposed EU export tariffs after Brexit... Read more

Deutsche Bank’s top investor, Qatar, is worried about lender’s outlook. Deutsche Bank AG's biggest shareholders, investment vehicles controlled by the Qatari royal family, have recently expressed concern about the threat of legal fines against the lender and whether it is adequately focused on its long-term strategy, according to people familiar with the matter... Read more

Asda faces £100m equal pay battle with shopfloor staff. Tribunal rules that thousands of women who work in retailer’s stores can lodge claim over alleged gender pay gap... Read more

Libya's $1.2bn claim against Goldman Sachs thrown out... Read more

Facebook has taken the unusual step of shutting down ads for an entire nation. The social network said it has turned off ads in Thailand following the death of the country's deeply revered king. It's the first time Facebook has imposed an ad blackout for a whole country... Read more

Windfall for startups? Saudi Arabia backs new $100 billion tech fund... Read more

What Is Going to Happen at the Brics Summit in Goa?... Read more

Latest reports

Latest reports

Blog snapchat