ASB Securities Morning Brief for Tuesday, 13 October 2015
Tuesday, 13 October 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose, led by A2 Milk Co amid continued demand after its placement. Contact Energy, Fletcher Building and Property for Industry advanced. The S&P/NZX 50 Index rose 51.04 points, or 0.9 percent, to 5689.830. Within the index, 41 stocks rose, four fell and five were unchanged. Turnover was $137 million... Read more

The New Zealand dollar rose amid speculation inflation is tame enough in the US to prevent the Federal Reserve rushing to restore normal monetary conditions, including interest rates of more than zero, which has driven down the greenback. The kiwi rose to 66.97 US cents at 5 pm in Wellington, from 66.80 cents at the start of the day and from 66.90 cents in New York on Friday. The trade-weighted index was little changed at 71.57 from 71.56... Read more

New banknotes go into circulation... Read more

New Zealand inflation probably slowed in the third quarter, keeping the annual rate below the Reserve Bank's target band for a fourth straight quarter and giving the bank more reason to cut interest rates again as soon as this month... Read more

ASB economists say RBNZ has 'already come unstuck' with forecasts of a lower dollar... Read more

Auckland median house price reaches new record after 25.4% annual jump... Read more

“Halo” effect drives prices to record highs. Auckland’s super-hot housing market is pushing buyers into other regions – and that has led to a new national price record and new regional price highs.... Read more

ANZ has now moved to reduce its home loan rates after finding itself left behind following recent rate cuts by its rivals. It has cut every rate, although none of the resulting levels are market-leading. It's 'specials' have been changed to 4.35% for one year fixed and 4.49% for two years fixed... Read more

HSBC offers 4.25% for one and two-year mortgage terms... Read more

NZ’s 4th P2P lender to target SMEs. New Zealand’s peer-to-peer (P2P) lending scene is set to get busier, following the news that Lending Crowd received its license from the Financial Markets Authority (FMA) on Friday... Read more

The Kiwifruit Claim is likely to seek damages from the Crown of over $334 million but there are still growers and others who may have losses of another $400 million who risk missing Friday’s final High Court-imposed deadline to take part in the class action... Read more

Dairy investors John Penno and Juliet Maclean are selling out of Chinese-controlled Purata Farms, the Canterbury corporate they founded 15 years ago as Synlait Farms. Shanghai Pengxin bought just under 74 per cent of the corporate farms group early in 2014 through New Zealand Standard Farms (SFL Holdings). The Chinese investors paid $2.20 a share... Read more

Round-the-clock dairy trade portal on trial... Read more

Silver Fern board won't be moved. Chairman says a ‘straw poll’ conducted among farmers during a national roadshow supports company’s stand... Read more

Board Confirms Unanimous Endorsment of Shanghai Maling Partnership Proposal; Shareholders Should Ignore Mystery Underwrite. The recent media statements from shareholder John Cochrane suggesting there is an alternative funding arrangement waiting in the wings should shareholders turn down the Shanghai Maling partnership, is a total unknown and should be treated with extreme caution says Silver Fern Farms.... Read more

'Dangerous game' to stare down banking syndicate, warns Silver Fern chairman as shareholder vote looms. Silver Fern Farms chairman Rob Hewett says the company's banking syndicate has become tired of its relationship and it would be "a dangerous game" to test lender support in the event farmer-shareholders don't support selling a half stake to Shanghai Maling Aquarius this week... Read more

New Zealand underwrite of Silver Fern Farms made public. Landcorp is one of the companies behind a $40 million underwrite of Silver Fern Farms, but the banking consortium financing SFF does not support the move. Wanaka company director John Rodwell has revealed he co-ordinated an underwritten rights issue at the request of SFF... Read more

The Miere Coalition, which represents Maori honey interests, supports the UMF Honey Association's bid to trademark Manuka Honey and says the industry group needs to work with Maori to make it successful... Read more

Key says land tax possible under TPP. PM says TPP carved out ability for NZ to impose land tax or stamp duty on non-resident buyers; says Labour Govt could still flout TPP and impose foreign buyers ban... Read more

Australian Tandem skydive operator Skydive The Beach is plunging into New Zealand with the acquisition of Skydive Queenstown for $18.6 million. It is the first overseas foray for the Australian company, which opened in Wollongong, south of Sydney, in 1999 and now operates 16 "drop zones" in New South Wales, Queensland, Victoria and Western Australia... Read more

Snakk offer 'a steal', says CEO Mark Ryan... Read more

Hundreds of people have made their views on the Financial Advisers Act heard. A Ministry of Business, Innovation and Employment spokeswoman said it had received 164 submissions in response to the recent issues paper, from organisations and individuals... Read more

Parents fronting kids' insurance risk losing it all. Some Kiwi parents are at risk of having their insurance policies cancelled and claims declined, because of they way they insure their kids' cars. The practice of "fronting" describes parents who take out insurance for themselves and a teenage driver, pretending they will be the main driver of the vehicle, when in fact their child will be behind the wheel most of the time... Read more

Analysts pick higher Air NZ share price after airline lifts first-half guidance. Air New Zealand’s share price and analysts’ target price for the stock have risen after the airline forecast a boost in first-half earnings at last week’s annual meeting driven by increased demand, higher tourist numbers, and lower fuel costs... Read more

Government confirms councils could contribute to cost of UFB extension. Councils are being encouraged to contribute to the cost of rolling out ultrafast broadband, meaning wealthier towns are more likely to get better broadband than poorer ones, Labour says.... Read more

Vodafone welcomes new targets for rural broadband... Read more

Genesis Energy to Trial Distributed Residential Energy Storage System with the Enphase Home Energy Solution... Read more

Aurecon’s Managing Director for Asia, Anthony Barry, has been appointed to the board of engineering body FIDIC.... Read more

Vitaco Health Group, the food supplements business formed through the merger of Healtheries NZ and Nutra-Life & Fitness, is being questioned by Inland Revenue over $6.8 million of tax deductions claimed on a trademark licence agreement. The issue has arisen just a year after Vitaco cut a deal with the IRD over its use of convertible notes to reduce New Zealand tax liabilities... Read more

New Zealander's criminal history shocks London client. Mark Brewer, a New Zealander who billed himself as a "sales legend" but left the country with warnings from regulators and after being made bankrupt, has resurfaced in London with a new name but similar modus operandi.... Read more

Hawkes Bay Council clamps down on illegal tradies. Two Havelock North men have been convicted and fined for carrying out sanitary plumbing and drainlaying work without authorisation. The combined fine imposed on the men by Judge Courtney in the Hastings District Court was $1100 plus a further $452 in solicitors costs... Read more

New Zealand retailers reassessing websites after Harvey Norman 'sales glitch'... Read more

Opinion - David Hargreaves: Back to the drawing board. Latest house sales figures show that the Reserve Bank is going to need to revisit its strategy to control the scorching housing market... Read more

New Zealand Herald Editorial: NZ will need a new deal for rental homes... Read more

Opinion - Liam Dann: Backing a trade deal has never been so socially awkward. TPP may not be perfect for New Zealand, but being outside the pact is unthinkable... Read more

Opinion - Siah Hwee Ang: Trading in the Chinese Free Trade Zones. Siah Hwee Ang says on top of New Zealand’s existing free trade agreement with China, the Chinese FTZs are there to sweeten the deal for our businesses in China... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket has snapped a five-day winning streak, pulling back after its best week in almost four years as investors pocketed profits from last week’s energy rally. At the 4.15pm (AEDT) official market close, the benchmark S & P/ASX200 index fell 46.8 points, or 0.89 per cent, to 5232.9, while the broader All Ordinaries slipped 41.8 points, or 0.79 per cent, to 5267.4.... Read more

Australian dollar tipped to slump to US68c by end of 2015... Read more

Why the bond market is telling us to be worried. The debate about whether the bond market is actually "smarter" than the equity market has raged for decades. But during a long and distinguished career in investment management, Mark Burgess studied to find an answer. "It turns out the bond market is smarter. It tends to see things a little earlier," he said at a panel discussion in Melbourne last week hosted by boutique bond fund Jamieson Coote Bonds... Read more

Where Chinese billions pouring into Australian real estate really come from... Read more

Chinese investors flooding billions into the Australian real estate market prompt money laundering fears... Read more

Five months. That’s how long before house prices start to fall, according to the latest major investment bank to call the peak in Australia’s housing cycle. “Credit growth, auction clearance rates, house prices, settlement volumes and the dollar value of settlements are all showing signs of slowing, albeit from lofty levels,” analysts from investment bank Macquarie said in a note today, The Australian reports... Read more

Taking control of your superannuation pays off... Read more

Resources contracting companies planning to pursue fixed-price work could get themselves into trouble, according to Sedgman boss Peter Watson. Mr Watson said mining clients wanting to cut costs and increase efficiency in leaner times were moving away from the variable contracts, which can see payments balloon... Read more

Ausdrill chief financial officer José Martins has resigned after five years with the drilling contractor to take up the same role at Macmahon Holdings... Read more

Tanzanian-graphite play Black Rock Mining has been granted a trading halt by the ASX pending details of an asset acquisition. Black Rock has been an ASX star performer recently, including a 12-month high of $0.094... Read more

UBS Papua New Guinea 'deal': respected figures question PM Peter O'Neill's role. Two respected former PNG prime ministers have called for investigations into "possible corrupt activities" involving Prime Minister Peter O'Neill and his government's acquisition of a $1.2 billion stake in ASX-listed Oil Search, which was financed by the Australian arm of Swiss bank UBS... Read more

Mining giant Glencore will attempt to sell copper mines in Australia and Chile as it tries to tackle its massive debt. The company on Monday, said it would try to sell its wholly-owned Cobar copper mine in western NSW and its Lomas Bayas copper mine in Chile... Read more

Explaurum Limited granted ASX trading halt... Read more

Troubled energy giant Santos is axing another 200 jobs in a $100 million cost-cutting drive designed to slash debt as it battles sliding oil prices. The oil and energy producer says most of the jobs are Adelaide-based office roles and that the cuts are part of a strategic review led by executive chairman Peter Coates... Read more

New assays from Consolidated Zinc’s Plomosas project in Mexico have confirmed zinc grades in excess of 50% and lead-zinc grades nearing 60%, prompting the company to contemplate an early production scenario... Read more

Clough has continued its international expansion, showing faith in North America’s oil and gas prospects by buying a Canadian engineering firm... Read more

Shares in Antipa Minerals soared today after it announced a $60 million earn-in agreement with mining giant Rio Tinto over the explorer’s Citadel gold/copper project in the Pilbara... Read more

Black Rock Mining's managing director, Steven Tambanis, has further aligned himself with the success of the company, after spending $25,000 to acquire 526,315 shares in an off-market acquisition. The average purchase price was around $0.048... Read more

LNG projects go from bonanza to break-even. It was supposed to be the next wave of Australia's resources boom, but the turbo-charged profits once hoped for from Australia's liquefied natural gas bounty are quickly being scaled back, thanks to a plummeting oil price... Read more

Exalt Resources raises $5M in medical transition... Read more

Former Myer CEO Bernie Brookes gets $1.5 million golden handshake despite declining sales... Read more

Dell is buying data storage company EMC in a deal valued at $US67 billion ($91.3 billion). Shareholders of EMC Corp will receive about $US33.15 per share, which includes cash plus tracking stock linked to part of EMC’s economic interest in the VMware business. That is a 19 percent premium to EMC’s Friday closing price of $US27.86... Read more

Transurban's toll roads in the United States are finally starting to perform, and the group hopes to expand its asset base there. Chairman Lindsay Maxsted acknowledged at Transurban's annual meeting on Monday that the company had held investments in toll roads in the US state of Northern Virginia for a long time, and until recently they had not produced tangible results... Read more

The competition watchdog is being accused of protecting ride sharing service Uber after it flagged it may stop the taxi industry introducing a rival booking app... Read more

Watchdog slams brakes on taxi app joint venture... Read more

Those choosing to adopt a do-it-yourself approach with their tax affairs have only a few weeks left to do so or risk getting fined up to $900. The October 31 deadline is less than three weeks away for those who go it alone when lodging their return and for anyone who has left it this late they’re being urged to spring into action... Read more

Woolworths, Lowe's tip $105 million into Masters as deadline looms... Read more

Ex-AWB boss Trevor Flugge failed to blow whistle on millions sent to Saddam's regime... Read more

Opinion/Analysis - Chris Weston: Is this rally for real?... Read more

International Headlines

U.S. Market Report: U.S. Stocks Little Changed Before Corporate Earnings This Week... Read more

North/South Americas Market Report: North and South American markets are mixed today. The Bovespa is up 0.47% while the S&P 500 gains 0.02%. The IPC is off 0.41%... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The DAX gained 0.23%, while the FTSE 100 led the CAC 40 lower. They fell 0.70% and 0.27% respectively... Read more

Asian Market Report: Asian markets closed sharply higher today with shares in China leading the region. The Shanghai Composite is up 3.28% while Japan's Nikkei 225 is up 1.64% and Hong Kong's Hang Seng is up 1.21%... Read more

Oil prices climbed in Asia Monday boosted by a weaker dollar and expectations a rise in demand will ease a global supply glut, while investors await the release of key Chinese economic data this week. Both main crude contracts have rallied since hitting six-year lows in late August, with last week seeing healthy rallies in line with global equities on easing expectations the US Federal Reserve will hike borrowing costs this year, pushing the dollar lower... Read more

OPEC chief confident of a balanced oil market in 2016... Read more

Saudi Arabia's oil policy 'does not help anyone'. Saudi Arabia's decision to flood world markets with oil is a mistake that the kingdom has repeated several times in the past four decades. That's the view of the outspoken former central bank governor of Nigeria, a fellow member of OPEC and the cartel's biggest producer in Africa.... Read more

Spot gold shines to US$1160 an ounce in afternoon trade... Read more

Federal Reserve Vice Chairman Stanley Fischer said the U.S. economy may be strong enough to merit an interest-rate increase by year end, while cautioning that policy makers are monitoring slower domestic job growth and international developments in deciding the precise timing of liftoff... Read more

Social Security benefits unlikely to rise next year: report... Read more

Chinese all-cash buyers of U.S. homes have tripled since 2005. Mandarin-speaking Chinese are buying mostly high-end homes with a median price of over $500,000... Read more

Lockhart Says Improving U.S. Job Market Supports '15 Liftoff... Read more

Bud-Miller: Anheuser-Busch InBev sweetens offer to buy SABMiller... Read more

Chipotle Mexican Grill Inc. has named Curt Garner its first chief information offier, effective Nov. 23. In this role, he'll use technology to improve customer experience, said Steve Ells, founder and co-chief executive officer of Chipotle... Read more

Social network giant Facebook paid just £4,327 ($6,643) in corporation tax in 2014, its latest UK results show. Its most recent Companies House filing shows the company as making a pre-tax loss of £28.5m last year, but the firm also paid its 362 UK staff a total of £35.4m in share bonuses... Read more

Commodity contagion sparks second credit crisis as investors panic. Falling commodity prices have caused panic in credit markets and just like 2007 the contagion is spreading... Read more

The coke ovens and blast furnace at the Redcar steelworks will close after no offers to buy them were received, the Insolvency Service has confirmed. The ovens had been kept alight until the weekend to allow for negotiations with prospective buyers... Read more

Cammell Laird lands UK biggest civil shipbuilding project in a generation. Shipyard Cammell Laird beats foreign rivals to land £200m project to build advanced research ship for British Antarctic Survey... Read more

German brand dealt 'hammer blow' by VW scandal and weakening economy. The value of the 'Made in Germany' brand is estimated to have fallen 4pc to $4.2 trn this year... Read more

The international credit rating agency Standard and Poor's has cut the long-term debt rating of German auto giant Volkswagen in the wake of the pollution cheating scandal involving its diesel vehicles... Read more

RACE. That's the ticker symbol that Ferrari will use when it debuts on the New York Stock Exchange with a $10 billion valuation within the next few months. Parent company Fiat Chrysler Automobile (FCAM) said Monday it plans to set a price of $48 to $52 per Ferrari share and intends to sell about 10% of the company in the initial public offering. The company hopes to raise just about $1 billion from investors... Read more

Government to sell final Royal Mail shareholding overnight Department for Business, Innovation and Skills authorises sale of remaining 14pc shareholding... Read more

Air France employees arrested after violent protest... Read more

Apple's new News app is unavailable in China. Whether Apple is blocking it or the News app has succumbed to the Chinese government's "Great Firewall" remains unclear. Apple won't say... Read more

What Investors Are Looking for in Infosys and TCS Earnings. Investors will be scrutinizing the results of India’s big information-technology outsourcing companies in the next week for signs of their ability to thrive as cloud computing and other forces reshape the industry... Read more

Narendra Modi’s Business-Environment Report Card... Read more

Opinion - Cullen Roche: Economics is the most important science being done today... Read more

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Latest reports