ASB Securities Morning Brief for Friday, 20 February 2015
Friday, 20 February 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares fell, led by Spark New Zealand after its first-half earnings fell short of market expectations. Skellerup Holdings paced the decline as it downgraded its profit outlook. Xero was issued a 'please explain' note by stock market operator NZX. The NZX 50 Index fell 15.134 points, or 0.3 percent, to 5726.225. Within the index, 22 stocks fell, 16 rose and 12 were unchanged. Turnover was $149 million... Read more

The New Zealand dollar held its gains in local trading after minutes to the US Federal Reserve's last policy meeting raised concerns about the global economic outlook and stoked speculation the US central bank will keep interest rates near zero for longer than anticipated. The kiwi traded at 75.66 US cents at 5pm in Wellington from 75.52 cents at 8.30am, up from 75.17 cents yesterday. The trade-weighted index rose to 78.36 from 78.10 yesterday.The New Zealand dollar held its gains in local trading after minutes to the US Federal Reserve's last policy meeting raised concerns about the global economic outlook and stoked speculation the US central bank will keep interest rates near zero for longer than anticipated. The kiwi traded at 75.66 US cents at 5pm in Wellington from 75.52 cents at 8.30am, up from 75.17 cents yesterday. The trade-weighted index rose to 78.36 from 78.10 yesterday... Read more

Population growing in all New Zealand regions: Statistics NZ... Read more

New Zealand consumer confidence dipped in February, while remaining elevated in the face of low interest rates and cheaper fuel... Read more

Rising sea level warnings on LIMs? Falls in fixed mortgage interest rates, tight dwelling supply and booming net immigration are contributing to resurgence in house price inflation, ANZ’s economists say. They have released their latest Property Focus, which says there is a clear divide between what is happening in Auckland and the situation in the rest of New Zealand... Read more

Commissioner warns property owners that banks and insurers are focusing more on risks of rising sea levels; LIM warnings possible; Maps being drawn up... Read more

Farm sales ease in recent weeks... Read more

Big mandates force big questions. A chance to pick up a big new investment mandate is forcing many New Zealand fund managers to address capacity issues, a sector analyst says.... Read more

Almost $200 million in taxpayers' money invested through the New Zealand Superannuation Fund has been lost after the collapse of a Portuguese bank where the money was invested - supposedly as a "risk-free" loan... Read more

NZ Super Fund sues Bank of Portugal over $200m loss... Read more

AMP's NZ unit lifts FY profit 4.6% on KiwiSaver growth... Read more

Fonterra chair Wilson says dairy prices now at level to hit milk price forecast... Read more

Spark has reported a first-half net profit of $147 million, flat against its first-half 2014 result and a touch light on analyst expectations. Before stripping out one-offs, including the sale of Spark's AAPT business, net profit was down 13%. The shares last traded at $3.31, and have gained 6.3% this year. The stock is rated an average "hold" according to 10 analyst recommendations compiled by Reuters, with a median target price of $2.91... Read more

Moutter shrugs off drop... Read more

A spike in Xero shares has prompted a "please explain" letter from the NZX. The Wellington-based cloud software firm had seen its formerly volatile shares trade in a narrow range between $15.25 and $17.75 over the past several months... Read more

Hellaby first-half profit jumps 36%, sees full-year earnings growth... Read more

Port of Tauranga said its net profit rose by 8.2 per cent to $42.6 million in the six months to December and broadly hinted that a capital repayment may be in store once its $350 million channel deepening project is complete in 2017. The company raised its interim dividend by 1c to 22c per share.... Read more

Port shares tumble despite profit rise. An 8 per cent rise in first-half profit was not enough for some Port of Tauranga investors who sent the share price down 2 per cent in late trading... Read more

Port of Tauranga setting up to receive bigger ships. Port of Tauranga is to buy two new gantry cranes and will tender for dredging work that will allow it to accommodate bigger container vessels than rival Ports of Auckland can handle.... Read more

Ports of Auckland said its first-half net profit rose by 9.5 per cent to $28.9 million in the six months to December, driven by higher freight volumes. The company said an interim dividend of $25.5 million will be paid to its owner, Auckland Council Investments, up 21.6 per cent from the previous year... Read more

Shanghai Pengxin wants to lift NZ farm assets to $1 billion in next five years... Read more

Cooks Global Foods, which owns most of the global rights to Esquires Coffee House, has successfully completed the purchase of the coffee chain’s master franchise in China. Auckland-based Cooks signed an agreement in September to buy back the business from Beijing Esquires Management Co (Esquires China), and announced to the NZX this morning the deal has gone through... Read more

Virgin Australia's first half loss will hurt Air New Zealand's interim profit. Air New Zealand has a 25.9 per cent stake in the Australian airline and its accounts will reflect that share of the A$47.8 million first-half statutory after-tax loss suffered by Virgin... Read more

Skellerup first half profit falls 10%, missing forecast, annual profit growth to stall... Read more

Reward for shareholders. Meridian Energy believes Southland's Tiwai Pt aluminium smelter is running a "reasonable cash surplus".... Read more

Super Retail has decided to close its troubled New Zealand-based Fishing Camping Outdoors (FCO) chain. The group decided to close FCO after a major review found it was unlikely the division would achieve the group's return on capital hurdles within a reasonable time... Read more

Steel & Tube, New Zealand's largest steel distribution company, lifted first-half profit by 35 per cent, in line with expectations, following last year's acquisition of S&T Stainless and an uplift in construction activity. Steel & Tube shares closed up 3.4 per cent yesterday at $3.04.... Read more

Nuplex Industries shares jumped 6.7 percent to a three month high after the specialty chemicals maker confirmed it expects to meet its annual earnings forecast as it benefits from a reorganisation of its business... Read more

Fairfax first half profit slumps on one time charges, continuing Ebitda down 8.7%... Read more

Energy Minister Simon Bridges says big petrol retailers are "on notice" after they maintained large profit margins while the price of oil was falling sharply late last year. Mr Bridges warned the New Zealand branches of Chevron, Mobil, Z Energy, BP and Gull in a formal letter... Read more

ASX-listed Vocus to lift Southern Cross capacity by 10 times... Read more

Opinion - Nicky Hyslop: Desperate for a drop to drink. The extremely dry weather down south and in Marlborough is starting to have an impact nationally, with analysts expecting GDP growth to be slower due to the drop in milk production... Read more

Opinion - Paul Glass: Global hopes firmly tied to US economy... Read more

Opinion - Pattrick Smellie: Hell hath no fury like a fund manager foiled... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket has closed in the red, reversing after a strong opening as a glut of corporate earnings failed to impress investors. At the 4.15pm (AEDT) official market close, the benchmark S&P/ASX200 index was down 11.5 points, or 0.19 per cent, at 5,904.2, while the broader All Ordinaries index fell 8.1 points, or 0.14 per cent, to 5,869.8... Read more

Standard & Poor’s Ratings Services has backed warnings by Australia’s central bank that the federal budget would be vulnerable to a global economic shock, which could put the country’s AAA rating at risk. The Australian dollar dropped around 40 points on the news, falling from US78.33c to US77.91c on the news... Read more

Budget: Economists call for overhaul of retirement system, recoup of pensions from estates... Read more

The Abbott government is weighing a ban on borrowing by self-managed superannuation funds (SMSFs) in order to shield the sector from additional pain should stock or property values fall sharply... Read more

Economy not so bad, expert says. One of the few economists to predict February's rate cut has backtracked on his call for three further cuts, saying the economy is not as weak as he thought. Market Economics managing director Stephen Koukoulas says recent economic data, including job ad and consumer confidence, suggest signs of a pickup in the economy... Read more

Platypus Minerals has been granted an ASX trading halt in relation to the placement of shortfall shares from its $1.6 million rights issue priced at $0.02 per share... Read more

A 24-hour strike organised by rail unions in Queensland has been postponed to allow for employees to prepare for the arrival of Tropical Cyclone Marcia on Friday morning,... Read more

Oil and gas producer Drillsearch Energy is cutting exploration and costs after weaker oil prices slashed half year profit by 60 per cent. The central Australian operator's net profit slumped to $14.3 million in the six months to December 31, from $35.5 million in the same period a year earlier. Drillsearch shares lost six cents, or 5.8 per cent, to 97 cents.... Read more

The falling Australian dollar sees Origin Energy post a net loss of $25 million for the six months to December 2014. The result compares to a net profit after tax of $322 million for the December 2013 half-year... Read more

Stem cell breakthrough. ASX-listed Cynata Therapeutics has surged 70 per cent after a stem cell manufacturing breakthrough.... Read more

Lower petrol prices and interest rates are helping fuel a sales surge for the retailer behind Rebel sports stores and Ray's Outdoors. Super Retail Group, which also owns Supercheap Auto, has enjoyed a sales lift across its leisure, auto and sports stores since late December... Read more

Wesfarmers is sacrificing Coles' earnings growth to keep shoppers' grocery bills down. Coles lifted its first half earnings 7.1 per cent to $895 million - half the growth rate it achieved in the same period two years ago... Read more

Wesfarmers has reported a 4 per cent slide in its first half profit to $1,376 million, negatively affected by sold off insurance and industrial gas businesses slipping out of its accounts. At 11:50am (AEDT) Wesfarmers shares had slipped 2.2 per cent to $44.88 cents.... Read more

AMP has boosted its payments to shareholders on the back of a massive improvement in its life insurance business contributing to a 32 per cent rise in annual profit. Shareholders will be paid an extra two cents per share after the wealth management giant's profit hit $884 million in 2014. AMP shares have gained 23 per cent in the past month, and were up 16 cents, or 2.5 per cent, at $6.66 at Thursday's close... Read more

Christchurch-based Martin Aircraft has raised $A27 million ahead of listing on the Australian stock exchange next week.... Read more

Casinos operator Crown Resorts says conditions in one of its key markets, Macau, are weak but it remains bullish about prospects there. Investors shrugged off the net profit slide and Crown's Macau woes, with the company's shares closing up by $1.42, or 9.82 per cent, at $15.88.... Read more

Virgin Australia has narrowed its first half loss, even as fewer people booked flights and amid increasing pressure on its international business. Virgin booked a first half loss of $53 million, an improvement of more than $20 million... Read more

Shares in RCR Tomlinson were higher after the company lifted first-half profit by 4 per cent to $19 million and boosted its interim dividend by 17 per cent to 3.5 cents a share fully franked. RCR shares were up five cents, or 2.38 per cent, to $2.15 at the close.... Read more

Internet service provider iiNet is closing the gap between itself and Australia's second largest broadband provider Optus after posting significant growth in both revenue and fixed-line subscribers in its first half... Read more

Tatts Group is looking at expanding its sales of lottery tickets at fuel outlet convenience stores as part of a string of moves to boost the division... Read more

Domain Group chief executive Antony Catalano has threatened legal action against competitor REA Group, after accusing the digital property marketing company of deceptive and misleading behaviour... Read more

Power sell-off will lower prices: ACCC... Read more

Fairfax chief says publisher is on track with transition strategy... Read more

Opinion - Ric Spooner: CBA's momentum is stalling. Tuesday’s selloff in Commonwealth Bank puts some interest into the chart outlook for our biggest stock and opens up the possibility that the current correction has further to play out... Read more

Opinion - Sinclair Davidson: Australia's tax system is sound... Read more

International Headlines

U.S. Market Report: U.S. stocks slipped Thursday, but pared their early losses, as investors eyed negotiations over Greece’s bailout and a renewed selloff in oil prices. The Dow Jones Industrial Average fell 34 points, or 0.2%, to 17996 in midmorning trading. The S&P 500 index eased one point, or 0.1%, to 2098. The Nasdaq Composite gained 15 points, or 0.3%, to 4921... Read more

North/South Americas Market Report: North and South American markets are mixed today. The Bovespa is up 0.45% while the IPC gains 0.37%. The S&P 500 is off 0.13%... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The CAC 40 gained 0.71% and the DAX rose 0.37%. The FTSE 100 lost 0.07%... Read more

Asian Market Report: Asian markets finished higher today with shares in China leading the region. The Shanghai Composite is up 0.76% while Japan's Nikkei 225 is up 0.36% and Hong Kong's Hang Seng is up 0.19%... Read more

Brent oil prices slipped below $59 a barrel on Thursday after another big weekly build in U.S. crude inventories and a possible rise in Saudi output stoked worries about oversupply. U.S. crude stocks rose by 14.3 million barrels last week, data from industry group the American Petroleum Institute (API) showed on Wednesday, compared with analysts' expectations for an increase of 3.2 million barrels... Read more

Gold futures settled at their lowest level in nearly seven weeks today, then clawed their way back up in the immediate wake of minutes from the Federal Reserve’s January meeting... Read more

Pressure mounts on shippers, union to settle U.S. West Coast ports dispute... Read more

U.S. jobless claims fall as labor market gains momentum... Read more

Officials at the Federal Reserve are unlikely to raise interest rates soon, the latest minutes from the bank's January meeting have revealed. Policymakers worried about lower-than-expected inflation as well as slow wage growth in the US economy, the world's largest... Read more

U.S. weapons makers on Wednesday cautiously welcomed a new U.S. export policy for unmanned planes, saying it could boost equipment sales while making it easier for the U.S. military to operate with allies in future conflicts... Read more

New Rules Spur a Humbling Overhaul of Wall St. Banks... Read more

Morgan Stanley breach probe shifts to hacker from fired employee.... Read more

An Apple car? Yes. Apparently Apple has been working on its own automobile. The fact that the car would be, like a Tesla, electrically powered, only added to the surprise. And added to the eye-rolling, if you've got doubts about this... Read more

Electric-car battery maker A123 Systems has sued Apple Inc for poaching top engineers to build a large-scale battery division, according to a court filing that offered further evidence that the iPhone maker may be developing a car... Read more

T-Mobile's chief executive on Wednesday called the recent U.S. auction of airwaves "a disaster" for American consumers as he took aim at rules that allowed Dish Network Corp to partner with companies that may qualify for some $13 billion in discounts... Read more

Will Investors Put the Lid on the Container Store’s Generous Wages? CEO Kip Tindell’s brand of “conscious capitalism” is being tested in the face of a plunging share price and falling profits... Read more

Wal-Mart to spend $1 billion to raise U.S. wages this year... Read more

The Wal-Mart pay rise may not even show up in jobs report... Read more

Wal-Mart’s wage hikes come after years of fighting in court... Read more

The first-ever minutes from the European Central Bank (ECB) reveal that chief economist Peter Praet warned members of the hazards of delaying the introduction of quantitative easing... Read more

Germany has rejected a Greek request for a six-month extension to its eurozone loan programme. The rejection came despite the European Commission calling the Greek request "positive" only minutes earlier... Read more

Inflation in France, the eurozone's second-biggest economy, turned negative in January, adding to worries over deflation in the eurozone. Prices fell 0.4% from a year earlier, with energy costs down 7.1% following the drop in global oil prices... Read more

Food company Nestle says net profit rose 44 per cent last year as the company booked one-time gains from the sale of a stake in L'Oreal and its purchase of dermatology company Galderma... Read more

The board of Adidas has launched a formal search for a successor to Chief Executive Herbert Hainer who has faced criticism as the German sportswear company has lost ground to U.S. rival Nike. The company's shares were up 3.4 percent by 1410 GMT on Thursday, making them the biggest gainer on the German blue-chip index DAX... Read more

International sales could eventually account for 30 percent of Lockheed Martin Corp's annual revenue, Chief Executive Officer Marillyn Hewson told Reuters on Wednesday... Read more

BAE Systems, the world's third-largest defense contractor by revenue, said it believed the worst was over for spending cuts in its key U.S. market as it forecast that earnings would return to growth in 2015... Read more

Air France-KLM is planning to speed up cost cuts and reduce investment after it reported a drop in full-year profits following last year's pilots' strike. The strike followed a dispute with pilots over plans to expand the group's budget subsidiary Transavia... Read more

Japan's annual exports in January jumped the most since late 2013 in an encouraging sign a weak yen is finally boosting the nation’s all-important export engine and helping the economy crawl out of recession... Read more

Sony has said it will spin off its video-and-audio business into a separate company as part of a three-year plan to return to profit. The loss making Japanese electronics giant firm plans to achieve an operating profit of 500bn yen (£2.17bn) by March 2018... Read more

Federal authorities in San Francisco are probing U.S.-based Mirach Capital Group, two sources familiar with the situation told Reuters, amid allegations that the group gave a forged bank letter to Indian conglomerate Sahara as part of financing negotiations... Read more

Smart money is betting on Indian retail, according to The Wall Street Journal’s list of the world’s most-valuable startups. The Billion Dollar Club includes startups that venture-capital investors believe are worth at least $1 billion and have raised money in the past three years... Read more

Opinion - Jeff Reeves: Amazon investors should sell now... Read more

Opinion - Larry Elliot: Greece runs up the austerity white flag in Brussels... Read more

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