ASB Securities Morning Brief for Saturday, 22 August 2015
Saturday, 22 August 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares were mixed as weak offshore sentiment overshadowed the local earnings season. Spark New Zealand surged after annual profit beat expectations, while Freightways and Westpac Banking Corp dropped amid global volatility. Trade Me Group shares jumped on better-than-expected earnings. The S&P/NZX 50 Index rose 8.73 points, or 0.2 percent, to 5751.19. Within the index, 25 stocks fell, 14 rose and 11 were unchanged. Turnover was $174 million. ... Read more

The New Zealand dollar is heading for a 1.3 percent gain against the greenback this week after minutes to the Federal Reserve's last policy meeting eroded expectations US interest rates will rise next month. The kiwi rose to 66.23 US cents at 5pm in Wellington from 65.36 cents on Friday in New York last week. The currency was little changed from 66.29 cents at 8am and 66.12 cents yesterday. The trade-weighted index rose to 71.31 from 71.14 yesterday, and is heading for a 1.5 percent weekly gain... Read more

Investment bank First NZ Capital says there is a 25 to 30 per cent risk of New Zealand's economy going into recession in the next 12 months. Chris Green, the firm's director for economics and strategy, said he had become increasingly concerned in recent weeks about factors such as slowing growth in China, the dairy price slump and falling business confidence... Read more

Sharper loan-to-value restrictions for Auckland investors should never have happened in the first place, it was argued today, as the Reserve Bank announced a little more leeway. It was announced in May that from October 1, Auckland investors would have to have 30% deposit for their new lending... Read more

Reserve Bank delays LVR implementation by one month... Read more

Record high migration adds to housing pressure. New Zealand saw its highest ever net gain of migrants in July and, with half heading to Auckland, the demand for SuperCity housing will keep rising... Read more

Auckland's housing shortage has underpinned the rapid escalation of house prices... Read more

Wool prices hold steady as demand, supply remain in balance... Read more

Spark New Zealand, formerly known as Telecom Corp, posted a 19 percent decline in annual profit, reflecting one-off gains the previous year's sale of its Australian mobile business, AAPT, while underlying earnings were up as the telecommunications company reshapes its business to become focused on data and mobile services. The board flagged a special dividend in the 2016 financial year.... Read more

Spark finally cut the thick, spiralled cord to Telecom yesterday, posting unexpectedly buoyant results showing that - for the first time - the company no longer relies on fixed line phone services for the majority of revenue... Read more

Infratil, which invests in energy, transport and social infrastructure, will continue a buyback programme for its New Zealand-listed stock and has raised the ceiling on the price it will pay.... Read more

Infratil looks at new technology investments to avoid being "Uber-ed"... Read more

NZX named preferred supplier by Electricity Authority. NZX shares last traded at $1.06 and have fallen 12 percent over the past 12 months... Read more

Queenstown Airport Corp, New Zealand's fourth busiest airport, boosted annual profit 25 percent, as trans-Tasman passenger numbers rose by a third and domestic passengers topped the million mark for the first time. Profit rose to $8.3 million in the year ended June 30, from $6.6 million a year earlier, the airport said in a statement. Revenue climbed 13 percent to $24.8 million, while operating earnings before interest, tax, depreciation and amortisation increased 9 percent to $16.6 million... Read more

A small fry Singaporean funds manager has built a 17.5 per cent stake in coal miner Bathurst Resources. Republic Investment Management has steadily increased its stake over a few months from 7.75 per cent to 17.5 per cent, disclosures to the Australian Stock Exchange show. The Bathurst shares are in the penny dreadful category at A1.9 cent (NZ2c) a share on Friday on the ASX.... Read more

Sky Network Television, New Zealand's dominant pay-TV company, boosted annual profit 6.4 percent as it reaped more revenue from fewer customers. Net profit rose to $171.8 million, or 44.09 cents a share, in the year ended June 30, from $161.4 million, or 42.61 cents, in the year earlier period, the Auckland based company said in a statement. Revenue increased 2 percent to $927.5 million. The company will pay a final dividend of 15 cents a share on Sept. 11, unchanged from the year earlier. That takes the total annual dividend to 30 cents, up from 29 cents the previous year... Read more

Sky TV appoints Airways NZ chairwoman Susan Paterson to board... Read more

IAG hits reinsurance limit on Feb 22, 2011 quake... Read more

Regulation keeping insurance industry awake globally, but not in NZ. PwC report reveals NZ insurance professionals most concerned about natural disasters, change management, distribution channels, cyber risk & reputation... Read more

Grosvenor Financial Services has launched a stripped down range of funds aimed at investors concerned about fees.... Read more

Kiwis appear stuck with high credit card interest rates despite Aussie crack-down, with the Commerce Commission leaving them to market forces... Read more

Pacific Aerospace stars in Chinese reality show... Read more

Internet service provider Wireless Nation has released the “Nightshift,” a $229 gadget designed to help people on slow internet connections watch Netflix. It lets you pre-load Netflix shows, rather than doing the usual live streaming – which can be demanding of bandwidth and needs a relatively speedy internet connection... Read more

The 16th annual AmCham DHL Express Success & Innovation Awards and AmCham’s 50th Anniversary dinner were held at the Pullman Auckland Hotel last night, with Fisher & Paykel Healthcare winning the Supreme Award for trade with the United States.... Read more

Mako Networks shut down by liquidator, owes millions. Barely a week after director and minority shareholder Bill Farmer bragged to NBR about his company’s success in the North American market, the company has closed its doors... Read more

Two former directors of property finance company OPI Pacific Finance have pleaded guilty to two Securities Act charges laid by the Financial Markets Authority, ahead of a trial set down for October. Mark Lacy and Jason Maywald faced charges relating to a registered prospectus and an advertisement distributed in 2007, which the FMA said contained untrue statements following an investigation in 2013... Read more

Building industry hits back at claims it is solely to blame for shoddy quake repairs... Read more

Christchurch Mayor Lianne Dalziel says calls for a wider review of earthquake repairs could have implications for the city council's consenting process. Community leaders and experts are calling for a bigger review of repairs after a Government investigation found defective foundation work... Read more

Opinion - Brian Gaynor: Overseas investment a key part of our story. Foreign firms play an important role but we need good rules in place... Read more

Opinion - Fran O'Sullivan: TPP requires major sales effort to gain acceptance. Country not convinced a deal would have plenty of upside... Read more

Opinion - Gareth Morgan: Who needs Landcorp and its dairy conversions – economically shaky, environmentally disastrous and treaty breaching?... Read more

Opinion - Grant Davies: A Broker’s View: NZX... Read more





Australian Headlines

Australian Market Report: The Australian sharemarket headed south for a second straight session, as some of investors’ fears about the global economy were confirmed by the announcement of a weaker-than-expected manufacturing activity result out of China midway through the session. The market fell to a fresh eight-month low as sentiment-exposed banks led the bourse southward. At the official 4.15 (AEST) close, the benchmark S&P/ASX200 had fallen 74. points, or 1.4 per cent, to 5214.6, while the broader All Ordinaries had dipped 70.7 points, or 1.34 per cent, to 5224.8.... Read more

The Australian dollar is moderately lower after dismal Chinese manufacturing data offset weakness in the greenback. At 5pm, the currency was trading at US73.02c, down from US73.13c yesterday.... Read more

Aussie gold punches through A$1560 an ounce, yellow metal stocks to gain. ASX listed gold stocks will be front and centre on investors' minds today, following another increase in the price of gold - in the local money... Read more

Australia sets date to end GST-free threshold for online goods... Read more

Almost all goods and services purchased online from overseas from July 1, 2017 will have the GST attached, Federal Treasurer Joe Hockey has agreed with his state and territory counterparts. The tax currently only applies to overseas online purchases worth $1,000 or more... Read more

Abbott fails on shipbuilding contracts... Read more

Weak consumer spending in Queensland has put the brakes on Supercheap Auto's profit, and its parent company blames the Queensland government. Super Retail Group says declining auto sales in the Sunshine state, where most stores are located, have dampened same-store sales growth of more than three per cent in other states... Read more

The Queensland mining community of Blackwater has been rocked by the announcement that BMA plans to outsource 306 more positions. Of those employees, around 150 are currently permanent and they will be redeployed at BMA sites or offered voluntary redundancies. The remaining are contract workers whose future is uncertain... Read more

The Wyllie Group’s Viburnum Funds will take a cornerstone stake in drilling services provider Imdex as part of a capital raising. Imdex today said it had raised $28 million before costs through a placement to investors aimed at paying down debt. After emerging from a trading halt, its shares fell 4 cents, or 17 per cent, to close at 20 cents.... Read more

Azonto Petroleum has been granted an ASX trading halt regarding the disposal of its main business undertaking... Read more

Santos chief executive David Knox will be stepping down after a prolonged downturn in the oil and gas market halved the company’s value over the last year. The surprise announcement came today as Santos logged an 82 per cent dive in interim profit after the "severe" decline in oil prices hit the firm's bottom line... Read more

Energy giant Santos has lost its chief executive and will consider selling assets as plunging oil prices slash its profit and market value. David Knox will end his seven years at the helm of the Australian and Asian oil and gas producer once a replacement can be found, leaving chairman Peter Coates to oversee a strategic review... Read more

Kibaran Resources in halt ahead of material offtake for Epanko Graphite... Read more

The re-emergence of Brett Fogarty into the public spotlight at Aditya Birla’s annual meeting this week is the culmination of a long campaign by the Perth business veteran.... Read more

Suncorp tightens up CEO contract after BoQ boss Stuart Grimshaw quit with $6m payout... Read more

Qantas can largely thank Saudi King Salman for its return to profit. Saudi Arabia's King Salman didn't rate a mention in the tale of Qantas's stunning $3.3 billion profit turnaround. But he played a vital role in helping revive the Flying Kangaroo's fortunes, which this morning posted a $557 million net profit, its best result in seven years... Read more

ACCC approves Qantas deal with China Eastern... Read more

Kerry Stokes’ Seven Group Holdings has emphatically rejected speculation in Sydney finance circles it may not pay dividends due on its listed preference shares. The redeemable, convertible preference shares, known as Transferable Extendable Listed Yield Shares (TELYS4), have attracted twice-yearly dividend payments. The speculation had been sparked by the sharp fall in the price of TELYS securities and Seven Group’s shares... Read more

Medibank members face new hospital charges of up to $1,000... Read more

Medibank Private has posted a maiden full-year profit of $285.3 million, well ahead of the prospectus forecast of $251 million when it was floated late year. The company's shares surged 16 per cent to $2.33 in the first 10 minutes of trade in response to the better-than-expected profit.... Read more

Falling margins have seen heavy engineering company Civmec post a 14 per cent drop in annual profit to $S30 million ($29 million). The result came despite contributions from new projects lifting revenue for Perth-based, Singapore listed Civmec by 15 per cent to a record $S499 million... Read more

IAG is targeting growth in Asia following a blowout in natural peril claims that dented full-year profit by more than 40 per cent. Net profit for the year to June 30 was $728 million, down from $1.2 billion the previous year, after Tropical Cyclone Marcia in Queensland and damaging storms in NSW pushed natural claim costs past $1 billion for the first time. Shares in IAG dropped 30 cents to $5.52.... Read more

Medibio Limited completes development of corporate stress product... Read more

Brisbane-based electricity retailer ERM Power posts double-digit growth in revenue and profit... Read more

Save on power bills: Big Energy Switch deadline looms for NSW customers... Read more

ASX cops $7.7m restructuring charge from tech overhaul... Read more

Transfield Services chairwomen Diane Smith-Gander has reportedly tried to turn the governance debate back on union superannuation funds in the wake of allegations of human rights abuses. The allegations relate to the company’s operation of detention centres on Nauru and Manus Island... Read more

Pilgrim reappointed as Privacy Commissioner... Read more

The controversial departure of the boss of struggling discount retailer Big W has dealt another blow to consumer giant Woolworths. Big W managing director Alistair McGeorge has resigned for health reasons, Woolworths said, but the company also revealed he has been the subject of complaints about his workplace behaviour. "The behaviour was verbal in nature," Woolworths said. Its shares were down 15 cents at $26.42 at 1420 AEST.... Read more

Analysis - Ric Spooner: Copper: from hot to not... Read more

Opinion - Raymond Harbridge: CEO pay is high, but it's inequity that warrants attention. Excesses of CEO pay make headlines during annual company reporting season, particularly at a time where pay increases for the general population have been fairly static. Yet CEO pay levels in Australia have yet to reach the astronomical “eye-popping” levels experienced in the United States... Read more

Opinion - John Quiggin: Three-word slogans have left Abbott with an economic quandary... Read more





International Headlines

U.S. Market Report: America's stock market plunged dramatically Friday, marking its biggest loss of the year. The Dow plummeted 531 points, concluding its worst week since 2011. Around the world, major indexes also fell for the week and most are negative for the month... Read more

North/South Americas Market Report: North and South American markets finished sharply lower today with shares in U.S. leading the region. The S&P 500 is down 3.19% while Mexico's IPC is off 2.03% and Brazil's Bovespa is lower by 1.86%... Read more

European Market Report: European markets finished sharply lower today with shares in France leading the region. The CAC 40 is down 5.18% while Germany's DAX is off 2.95% and London's FTSE 100 is lower by 2.83%... Read more

Asian Market Report: Asian markets finished sharply lower today with shares in China leading the region. The Shanghai Composite is down 4.27% while Japan's Nikkei 225 is off 2.98% and Hong Kong's Hang Seng is lower by 1.54%... Read more

Welcome back to a world of sub-$40 oil. Crude crumbled below $40 a barrel on Friday for the first time since March 2009.... Read more

Growth in the U.S. manufacturing sector slowed to its weakest pace in almost two years in August, according to an industry report released on Friday. Financial data firm Markit said its preliminary U.S. Manufacturing Purchasing Managers' Index fell to 52.9 in August, its lowest since October 2013, from a final July reading of 53.8. Economists polled by Reuters had forecast the August figure would be 54.0. A reading above 50 indicates expansion in the sector.... Read more

Disappointing business surveys intensify world growth fears... Read more

Apple Inc. raised A$2.25 billion ($1.6 billion) with a debut Australian debt sale that’s the largest bond deal ever Down Under by a non-financial company. The iPhone maker sold A$1.15 billion of seven-year notes at a yield of 110 basis points more than swap rates and A$1.1 billion of four-year securities at a 65 basis point spread... Read more

The U.S. stock market is in the midst of a minor panic attack, and it's taking America's favorite stocks with it. Apple and Disney are two of the most beloved stocks among regular Joe and Wall Street investors. Both got hammered this week. Apple fell almost 9% and Disney slid nearly 8%... Read more

Tesla engineer joins Apple's growing team of automated car experts... Read more

Airbnb: 1,000 companies sign up for business travel. Airbnb is popular with tech-savvy tourists, but now executives are clamoring to sign up for its new business travel services. The company, which helps individuals rent out their homes to travelers via an online website, has been expanding its services for traveling execs... Read more

Deere shares fall 8 percent following weak third-quarter results... Read more

New Jersey Completes $720 Million Exit From Derivative Contracts... Read more

Between 50 and 60 euro zone banks will be included in next year's stress test of top EU lenders, fewer than half of the number in the 2014 exercise, a European Central Bank spokeswoman said on Friday. The ECB is the supervisor for top banks in the single currency area... Read more

Sweden’s Krona Climbs as Growth Rebounds After Monetary Stimulus... Read more

The UK government spent less last month than it received in taxes and other forms of income, official figures have shown. Government borrowing was in surplus by £1.3bn in July, the Office for National Statistics (ONS) said. That was the first July surplus since 2012, thanks largely to higher amounts of income tax receipts... Read more

Colombia Holds Policy Rate at 4.5% as Peso Slumps to Record... Read more

Prosecutors sought to impeach Guatemalan President Otto Perez on Friday over a corruption scandal that led to the arrest of his former vice president, deepening a government crisis ahead of presidential elections next month. Perez's conservative administration has spent the past few months mired in public protests and scandals over corruption allegations against senior officials, several of whom the retired general fired during a cabinet purge in May... Read more

A key indicator of China's manufacturing activity slumped to a 77-month low in August, an independent survey showed Friday, fuelling concerns of further deceleration in the world's second-largest economy. The preliminary reading of Caixin's Purchasing Managers' Index (PMI) came in at 47.1 this month, the Chinese media group said in a joint statement with Markit, a financial information services provider that compiled the survey. The figure, which fell from July's final reading of 47.8, was the worst since a reading of 44.8 in March 2009, according to Markit's data... Read more

China's economy is in trouble. How bad is it?... Read more

To Nomura, Fannie and Freddie Are Bright Spot in Struggle Abroad... Read more

U.S. safety regulators have opened an investigation into air bags on Honda Motor Co's 2008 Accord sedans after 19 complaints of air bags failing to deploy including in a front crash that resulted in an injury, federal officials said on Friday... Read more

Opinion - Robert Peston: Inflation tiny not nil... Read more

Analysis - John Manfreda: Can Big Oil companies afford to keep paying dividends?... Read more

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