ASB Securities Morning Brief for Friday, 04 July 2014
Friday, 04 July 2014

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose, paced by Tower, Meridian Energy and Diligent Board Member Services as institutions turned their attention to offers of shares from Metro Performance Glass and Scales Corp, seeking to raise up to a combined $460 million. The NZX 50 Index rose 5167.394 points, or 0.4 percent, to 5167.394. Within the index, 29 stocks rose, 16 fell and five were unchanged. Turnover was $102 million... Read more

The New Zealand dollar rose to a two-month high against its trans-Tasman counterpart after Reserve Bank of Australia governor Glenn Stevens called his nation's currency overvalued. The kiwi rose as high as 93.50 Australian cents, trading at 93.43 cents at 5pm from 92.58 cents yesterday. It traded at 87.66 US cents at 5pm from 87.69 cents at 8am and 87.52 cents yesterday... Read more

Economy still on rise but risks also growing... Read more

NZX share trading rebounds in June, following a dip in May... Read more

Over the next five years meat and wool exports could rise by 22 per cent, with a large demand from Asia and high prices because of a globally constrained supply of beef and lamb. Beef + Lamb New Zealand is riding the wave of China's growing economy and the nation's appetite for Western-style meat diets... Read more

NZ 'naive' in China relationship. One of the United States' most eminent China watchers and authors says New Zealand has a short-sighted, naïve, and one-dimensional relationship with China and it should be more vocal about repression there... Read more

New Zealand's online retail growth is slowing, despite increased growth from rural consumers, according to a BNZ report released this morning. The report found that sales growth for the month of May 2014 was up seven per cent on the previous year. The growth rate was described by the report as "respectable" but a decline from the previous year where growth rates were consistently in the double digits... Read more

Auckland house sales dip in June... Read more

Demand for higher-value properties pushed Barfoot and Thompson’s average June sales price to the second-highest on record. The average price reported by the agency in June was $714,054, up 1.6% on May... Read more

Landlords say low taxes cap rents. Nearly $500 million in tax was paid on rental incomes in the financial year ended March 2013, figures obtained under the Official Information Act show. The New Zealand Property Investors Federation (NZPIF) requested the information in response to the Tax Working Group's finding in 2009 that rental property owners took money out of the tax system rather than paying into it... Read more

Property investors need to raise their rents now to offset rising interest rates, the New Zealand Property Investors Federation says.... Read more

Chartered Accountants Australia and New Zealand welcomes the announcement by the Minister of Revenue of changes to make the tax pooling rules more user friendly.... Read more

Advisers waiting for more information on requirements. There is criticism that the Financial Markets Authority has been tardy in getting its templates and online report systems ready for the next round of reporting required from financial sector participants.... Read more

Weighted average leverage ratio at NZ banks drops with Rabobank and ANZ leading the way... Read more

Oyster Group's latest property syndicate forecasts a 10% cash return... Read more

Ebos' 10-year contract to provide the warehousing and distribution of medical and non-medical products to all public hospitals is likely to be exported to Australia, managing director, Mark Waller says... Read more

Tait Communications scoring in Brazil... Read more

Metro Performance Glass and Scales Corp, seeking to raise a combined total from selling shares of about $460 million, are likely to succeed in their initial public offerings, investors say. Matthew Goodson, who helps manage $650 million at Salt Funds Management, said his firm has rejected investing in two other IPOs in the current pipeline but has managed to arrive at a valuation for Metroglass and Scales... Read more

Kiwis flock to cruise holidays in record numbers... Read more

Jetstar says passenger numbers in and out of Christchurch are nearly back to where they were before the 2011 earthquakes, which had the budget airline reduce flights into the city. The Australia-based airline, which has a strong presence in Christchurch, says numbers have gradually recovered since the damaging quakes, and that Aussies now view the recovering city in a more positive light... Read more

Today marine mammal expert Dr Liz Slooten of Otago University expressed concerns over dangers to whales and dolphins from sonar and seismic exploration for deep sea oil in Statoil’s permit zone off Northland... Read more

Call for better palm oil labelling. Shoppers trying to make ethical choices may be picking products that contain the very thing they are trying to avoid, a select committee has heard. Under joint New Zealand and Australian labelling laws, food products containing palm oil can be labelled generically as having "vegetable oil" as an ingredient, making it impossible to avoid, Unmask Palm Oil campaign director Ben Dowdle said.... Read more

Slingshot opens up Netflix. Internet provider unblocks major TV and video streaming services... Read more

The ‘supercell’ storm that hit Canterbury on 23 February 2014 resulted in $4.8 million of insurance payouts, according to the Insurance Council of New Zealand... Read more

Ryman Healthcare, the country's biggest listed retirement village operator and developer,has bought land in Wellington which it plans to turn into a boutique village... Read more

Wellington property developer Willis Bond has won the contract to build up to 600 residences, the first residential development in the revitalised Wynyard Quarter, on docklands in Auckland near the city’s central business district and the earlier Viaduct project that has brought the city closer to its waterfront... Read more

SkyCity Entertainment Group has acquired all the central Auckland land needed for its larger convention centre. But details about the final plans for the site are unlikely to be made public prior to September's general election. The Government and SkyCity signed an agreement to build the New Zealand International Convention Centre a year ago... Read more

Auckland Council yesterday granted its transport arm the power to raise prices at four inner city council-owned car parks. The move, which covers the Downtown, Victoria St, Fanshawe St and Civic sites, has reignited debate around parking price woes and traffic congestion in the city... Read more

Wellington agritech firm ReGen is helping dairy farmers manage a key issue - disposing of the effluent that cows produce. The company's ReGen Effluent system uses on-farm hardware that constantly measures soil moisture, soil temperature and rainfall, then transmits that data to ReGen's servers, where it is processed by the company's software... Read more

RBNZ deputy to talk dollars with coin fanciers, may not drop policy hints... Read more

The regulator suing six former Hanover directors and promoters refuses to say whether or not Mark Hotchin's action against the failed finance group's trustees will delay or affect settlement talks between the parties... Read more

The Law Society has censured former National Finance director Anthony Banbrook for convictions following his role in the firm’s collapse. In 2012 Mr Banbrook was convicted, sentenced to eight and a half months’ home detention and ordered to pay $75,000 in reparation for misleading investors... Read more

Telecom has been ordered to pay thousands of dollars to former workers who were paid lower bonuses after the company retrospectively increased sales targets. Gregory Allott and Aaron White took their case to the Employment Relations Authority, which ruled the telecommunications company had not acted as a fair and reasonable employer... Read more

Seven directors of eight companies that raise funds from the public have been charged by market regulators for allegedly breaching the Financial Reporting Act.... Read more

Two Christchurch directors of property developer Apple Fields face charges in a crackdown on companies who fail to file financial reports on time. Justin Prain and Mark Schroeder face six charges for breaches of the Financial Reporting Act, laid by the Financial Markets Authority. The maximum fine is $100,000... Read more

Opinion - Pattrick Smellie: Environmental protection v economy - a fine balance... Read more

Opinion - Brian Fallow: Tax initiative sets Labour apart. Parker’s Budget echoes Govt’s in many ways, except it repairs gaping hole where capital gains levy should be... Read more

Australian Headlines

Australian Market Report: The Australian share market has backed up yesterday's very strong gains with a further broad-based rise. The ASX 200 index rose 0.7 per cent to 5,491, as did the broader All Ordinaries which closed up 38 points to 5,480... Read more

The Australian dollar has fallen more than one US cent after the central bank governor said it was too high. At 1700 AEST on Thursday, the local unit was trading at 93.66 US cents, down from 94.63 cents on Wednesday. During the day the currency dropped as low as 93.62, its lowest level since June 25... Read more

Reserve Bank will give plenty of warning before raising rates... Read more

RBA governor Glenn Stevens has cautioned investors against assuming housing prices will always rise, and that the Australian dollar might not fall. In a speech to a conference of economists in Hobart on Thursday, the RBA governor downplayed the significance of the central bank’s recent changed description of the Australian dollar... Read more

Former Reserve Bank board member Warwick McKibbon has warned lower interest rates don’t necessarily translate into a lower Australian dollar... Read more

The budget will pass: Abbott... Read more

The housing sector appears to be the only shining light for the economy. New figures show building approvals for homes leapt by a stronger-than-expected 9.9 per cent in May, the biggest rise in nine months... Read more

Official figures show the building industry bounced back in May, while the clothing sellers suffered.... Read more

Retail sales at lowest since December... Read more

WA retail sales figures lowest in more than three decades... Read more

The federal Opposition is saying senior bureaucrat Martin Parkinson is out of touch, following the Treasury secretary's veiled swipe at Labor's budget response. Dr Parkinson told a mining conference on Monday it was "unsustainable" to "invoke vague notions of fairness" to oppose all budget reform... Read more

The mining industry is renowned as a space age innovator, with driverless trucks and trains, but has actually fallen behind other industries, says WorleyParsons chief executive Andrew Wood. The head of the engineering group said the industry had to swallow its pride and embrace the digital technology of other sectors... Read more

Queensland LNG projects heading towards industrial brawl over fly-in, fly-out rosters... Read more

BHP Billiton continues to cut jobs on both sides of Australia, announcing it will axe 163 coalmining jobs in NSW. The affected workers are employed at its Mt Arthur thermal coalmine in the Hunter Valley and represent nearly nine per cent of its NSW energy coal business workforce... Read more

Gold miner Silver Lake Resources says further jobs will go when it closes its Lakewood mill near Kalgoorlie. Silver Lake shares closed down 2.5 cents, or 4.5 per cent, at 53 cents.... Read more

Ratings agency Standard & Poor’s has warned BHP Billiton and Rio Tinto their credit ratings will be difficult to maintain if they push for capital management in the event that the iron ore price remains weakened... Read more

Aquila Resources directors have urged shareholders to accept a $1.4 billion joint takeover offer by China's Baosteel and local rail operator Aurizon.... Read more

Aquila Resources will fall under the control of Baosteel and Aurizon after directors of the company agreed to resign and Mineral Resources agreed to sell its stake into the joint offer. The existing directors, having agreed to sell their respective stakes into the joint $3.40 a share offer, have resolved to resign from the board and appoint four of the bidders’ nominees... Read more

Objections to Venture Minerals' mining grant at Mount Lindsay 'utter rubbish', Paul Harriss says... Read more

Mining explorer Venturex Resources has sold the historic Whim Creek pub in remote north Western Australia to two indigenous organisations for $1.7 million. The new owners, Whim Creek Operations, plan to restore and reopen the hotel to provide industry and training opportunities for local indigenous people... Read more

Buyback for Telstra coming: analyst. Credit Suisse research analyst Fraser McLeish has reportedly told clients to expect a $2 billion share buyback announcement from the telco at its 2013/14 financial results... Read more

Virgin Australia's low-cost carrier Tiger Airways will take Sydney Airport to the National Competition Council, demanding increased access to gates, check-in counters and kiosks in the T2 domestic terminal. ''Basically, we are seeking infrastructure investment on a fair, level playing field,'' Tiger Airways chief executive Rob Sharp said... Read more

ACCC worried over Tony Fung’s plans to buy Reef Hotel Casino in Cairns... Read more

Commonwealth Bank boss Ian Narev says sorry for multi-million-dollar financial planning scandal... Read more

CBA faces compo payouts... Read more

The whistleblower at the heart of Commonwealth Bank of Australia’s financial planning scandal will meet with chief executive Ian Narev in coming weeks.... Read more

Market takes $680 million Target write-down in its stride... Read more

Food producers in Manjimup in WA's South West fear a planned biomass power plant will pollute the local area and put agricultural production at risk. The BioMass Action Group, which represents growers, wine makers and community members opposed to the power plant, are urging the State Environment Minister not to grant an extension for the construction of the plant, 10 kilometres south of the township... Read more

GE Money fined $1.5m for misleading statements to 700,000 customers... Read more

A parliamentary inquiry in New South Wales is recommending a three-strikes policy for insurance assessors who routinely put poorly repaired cars back on the road. MPs investigated allegations of substandard repairs in the multi-billion-dollar insurance and smash-repair industry... Read more

Opinion/Analysis - Harrison Polites: Australia's big four banks aren't as profitable as we think they are... Read more

Opinion - Malcolm Maiden: CBA's report card: Must do better... Read more

Opinion - Ian McGregor: Australia's coal industry needs to prepare for global climate action... Read more

Opinion/Analysis - Mark Gregory: Telstra's NBN Co fibre deal is more than just a trial... Read more

Analysis - Tim McArthur: Why Fortescue Metals Group Limited and BlueScope Steel Limited soared today... Read more

International Headlines

U.S. Market Report: U.S. stock markets closed at 1 p.m. Thursday, but they got the fireworks going early. The Dow finally hit 17,000! Many see it as just a psychological threshold, but it's a level U.S. stocks have never seen before, and it comes a mere six months after the Dow crossed 16,000. All three major indexes closed higher Thursday. The Dow Jones Industrial Average finished at an all-time high of around 17,068 (up nearly 1.3% for the week). The S&P 500 also closed at a record level, hitting 1,985 for the first time. The tech-heavy Nasdaq Composite rounded up the week up 2%... Read more

North/South Americas Market Report: North and South American markets finished broadly higher today with shares in Brazil leading the region. The Bovespa is up 1.08% while Mexico's IPC is up 0.97% and U.S.'s S&P 500 is up 0.55%... Read more

European Market Report: European markets finished broadly higher today with shares in Germany leading the region. The DAX is up 1.19% while France's CAC 40 is up 1.02% and London's FTSE 100 is up 0.72%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 0.19%, while the Nikkei 225 led the Hang Seng lower. They fell 0.14% and 0.08% respectively... Read more

The global economy ended the first half on a high as business activity picked up in June, with new orders pouring in at their fastest rate in over three years, a survey showed on Thursday. JP Morgan's Global All-Industry Output Index, produced with Markit, rose to 55.4 from May's 54.2, holding above the 50 mark that divides growth from contraction for the 21st month running and the highest reading since February 2011... Read more

The outlook for world supplies of cereals and vegetable oils improved in June, contributing to the third straight monthly drop in global food prices, the United Nations' food agency said on Thursday... Read more

The U.S. trade deficit narrowed a bit more than expected in May as exports jumped to a record high, suggesting trade could be less of a drag on second quarter growth than earlier feared. The Commerce Department said on Thursday the trade gap fell 5.6 percent to $44.4 billion. April's trade deficit was revised slightly down to $47.0 billion... Read more

U.S. job growth surges, unemployment rate near six-year low... Read more

Obama Decries Big Bonuses at Bank Trading Desks as Risky... Read more

Obama wants more financial reform... Read more

Consumers may be shunning laptops for tablets. But businesses aren't. Intel's stock is on fire. And so are shares of other semiconductor companies, Microsoft and Hewlett-Packard. (video only)... Read more

Chipmakers are rushing to find partners or buyers in the busiest year for industry deals since 2011. Almost $11 billion in North American semiconductor transactions were announced in the first half of 2014, according to data compiled by Bloomberg... Read more

Ousted American Apparel Inc Chief Executive Officer Dov Charney has handed over his entire stake and voting rights in the struggling retailer to Standard General LP, enabling the fund to negotiate directly with the independent directors over the company's future, two sources close to the matter said on Wednesday... Read more

Facebook faces UK probe over emotion study... Read more

Uber Drivers Face Criminal Case as Cabbies Try to Block App... Read more

Top economies contract in first quarter of 2014: OECD... Read more

ECB says measures will push inflation up, but money-printing still possible... Read more

Euro zone business expanded at the slowest rate in six months in June, a survey showed on Thursday, but new orders poured in at the fastest pace in over three years, suggesting growth will accelerate in the second half of the year. Activity in France, the bloc's second-biggest economy, shrank at the fastest rate in four months and even in Germany, the backbone of the common currency area, the pace of growth eased... Read more

Germany approves first-ever national minimum wage... Read more

Ireland's economy expanded by a strong 2.7 percent in the first quarter of 2014 in yet another sign that the eurozone nation is returning to health, official data showed Thursday. "Preliminary estimates for the first quarter of 2014 indicate that gross domestic product (GDP) increased by 2.7 percent in volume terms on a seasonally adjusted basis compared with the fourth quarter of last year," the Central Statistics Office said in a statement... Read more

Mark Carney: rock star banker’s first year leaves credibility questions... Read more

Employment at U.K. services companies rose by a record last month amid brightening prospects, helping the economy maintain its momentum at the end of the second quarter. Markit Economics said the employment component of its Purchasing Managers’ Index rose to 58.8 from 56.2 in May. The headline measure for services, the biggest part of the economy, was at a three-month low of 57.7, down from 58.6 the previous month... Read more

Higher rates a last defense: BoE deputy... Read more

Bank of England deputy governor Sir Jon Cunliffe has told the BBC that the housing market poses the "biggest risk" to the UK economy. Sir Jon indentified "prices rising faster than people's incomes" as a particular threat. "That leads to... a big increase in the amount of debt in the economy," he added... Read more

Ryanair is returning to flying British domestic services with daily flights from Glasgow and Edinburgh to London starting in the autumn. The Irish airline abandoned its last internal flights three years ago but now believes a changing market and its own focus on business passengers makes the routes viable... Read more

Havana on Thursday protested U.S. penalties levied against France's largest bank over allegations it processed financial transactions for Cuba and other blacklisted states in violation of U.S. trade sanctions. In a statement published by Cuban official media, the Foreign Ministry said the penalties "violate the rules of international law and qualify as an extraterritorial and illegal application of American legislation against a foreign entity."... Read more

Concern in Russia as foreign tourist numbers slump. Tourist operators in Russia have expressed alarm at a substantial drop in the number of foreign visitors coming to the country in 2014. Key figures in the tourist industry speculate that the fall in tourist numbers may be a result of the Ukrainian crisis, but point out that inbound tourism from Asia is on the rise... Read more

RusBurger steals in ahead of Burger King in Crimea... Read more

China to try GSK-linked investigator in secret: family friends... Read more

Rich Asians buy into upwardly mobile Manila's luxury condominiums... Read more

After Dip, Gold Demand in India Set to Rise.... Read more

India's main stock market, Bombay Stock Exchange (BSE), has resumed trading after being disrupted due to a network problem. Shares listed on the exchange, as well as its indices, stopped updating for nearly three hours on Thursday morning... Read more

India's low-cost and only profitable airline, IndiGo, is meeting bankers who are bidding to underwrite an initial public offering that has been estimated at around $400 million, reports said Thursday. Business daily Mint, citing six people familiar with developments, said at least half a dozen investment bankers were competing to manage the offering and would make bids to the company in Paris within a fortnight... Read more

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