ASB Securities Morning Brief for Friday, 06 March 2015
Friday, 06 March 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares fell, led by Meridian Energy ahead of its second instalment receipt coming due in May. Spark New Zealand and Fletcher Building declined. The NZX 50 Index fell 17.31 points, or 0.3 percent, to 5856.772. Within the index, 25 stocks fell, 19 rose and six were unchanged. Turnover was $141 million... Read more

The New Zealand dollar dropped after the Reserve Bank said it's looking at ways to restrict lending on residential property investments, stoking speculation it would then have more room to cut interest rates. The kiwi fell to 75.52 US cents at 5pm in Wellington from 75.88 cents immediately before the release, to be little changed from 75.55 cents yesterday. The trade-weighted index was at 78.67 from 78.56... Read more

Don't wait for FTA before acting on India, says India-NZ business council chair... Read more

Kiwi firms urged to tap into India. Economic traffic between New Zealand and India is closer to moving to the fast lane as work continues on a free-trade agreement (FTA). But other links including direct flights between the two countries are needed to really push imports and exports... Read more

Small business economy fallen from mid-2014 highs... Read more

Mortgagee sales tumble as New Zealand's economy grows... Read more

The Reserve Bank of New Zealand is stepping up preparations to restrict lending to residential property investors as it watches house prices, particularly in Auckland, which continue to rise strongly... Read more

Reserve Bank comes up with new definition for property investors... Read more

Reserve Banks says landlords could be a danger to New Zealand's financial system in the event of a housing collapse... Read more

New Zealand’s construction industry is booming – thanks to supply pressures in Auckland and Canterbury.... Read more

The cost of renting a house in South or West Auckland has increased at double the rate of the cost throughout the rest of the country over the last year. Weekly median rents in Manukau and Waitakere rose by 8.43% and 7.90% over the year to February 28, while the national median only increased by 4.29%... Read more

ASB has signed a multi-year deal with the All Blacks as the team's official bank sponsor. The bank will support the All Blacks through the Rugby World Cup and the Lions tour in 2017 as well as NZ Rugby’s two sevens teams in Rio 2016. However, the ASB brand will not feature as a shirt sponsor... Read more

Industry leader calls for one class of adviser. The review of financial adviser regulations has officially started and one industry leader is saying there should not be different classes of advisers.... Read more

Fonterra ponders new bond offer for institutions and retail investors... Read more

Open Country Dairy, the dairy manufacturer controlled by Talley's Group, reported a record profit for 2014 as revenue growth outpaced rising cost of sales, and said it expects a "strong" result in 2015... Read more

Seeka Kiwifruit Industries Ltd advises that a significant fire occurred at its Oakside Post-Harvest site overnight. No people were injured in the fire that is understood to have taken hold around midnight on the evening of 4 March. The cause of the fire is unknown at this time... Read more

New Zealand considers regulatory framework for drones to operate beyond-line-of-sight. Allowing drones to operate beyond the operator's line of sight could provide economic gains of up to $190 million a year to New Zealand's farming, forestry and energy sectors, according to a report commissioned by Callaghan Innovation... Read more

International tourists keen to make the most of New Zealand's stellar summer spent $251 million in the country last month, latest figures show. Electronic transaction company Paymark, which released spending figures for February yesterday, said the amount was 14.1 per cent higher - $31 million - more than last year's February spend from foreign tourists... Read more

Briscoe Group's profit has soared 17 per cent but chief executive Rod Duke says the homeware and sports gear retailer could have delivered more. The company's shares closed up 4c yesterday at $2.99.... Read more

Kiwi shoppers are starting to abandon budget products in favour of famous brands, industry players say. They point to the imminent arrival of several big international brand names such as TopShop and the slow turnaround of discount general retailer The Warehouse, which announces its interim result on Friday... Read more

Would-be seabed miner Chatham Rock Phosphate is looking to raise a further $1.25 million as its key staff take pay cuts and the company pursues both legislation changes and a new mining consent under the controversial new law governing economic activity in New Zealand's offshore Exclusive Economic Zone... Read more

Supermarket giant Foodstuffs will not be drawn on whether it will follow rival Woolworths and sell its stake in The Warehouse at a big loss. Foodstuffs paid $150 million for 10 per cent of The Warehouse in a raid in 2006, when The Warehouse was considering moving into the grocery trade... Read more

Vector chair Stiassny calls for regulatory change to incentivise electricity innovation... Read more

Trustpower says customer churn lower when telco services added to power and gas... Read more

A new $300 million 800-unit Albany project, promoted as New Zealand's largest residential apartment development, has just been announced.... Read more

Transport and Energy Minister Simon Bridges has officials investigating ways to accelerate the uptake of electric vehicles, although is ruling out incentives or subsidies in what he says is "the most EV ready country in the world" because of New Zealand's very high proportion of electricity generated from renewable resources... Read more

Over 1000 expected to join anti-TPPA march... Read more

A new judgment in a $28 million divorce wrangle between a Rotorua sawmilling magnate and his ex-wife "redraws the landscape" on trusts and relationship property, says a top lawyer who acted in the case... Read more

Opinion - Bernard Doyle: Wise to guard against a 'Chinese sneeze'. China’s rise the most positive development for NZ economy in our lifetime but it is a good idea to plan for any risks... Read more

{Opinion - Grant Bradley: Powercos don't expect customers to give back the love... Read more

Australian Headlines

Australian Market Report: The Australian share market has closed virtually flat after a choppy session that saw investors shrugged off positive retail data and a lower GDP growth target from China’s Congress. At the close on Thursday, the benchmark S&P/ASX200 index was 2.6 points, or 0.04 per cent, higher at 5,904.2, while the broader All Ordinaries index was up 2.2 points, or 0.04 per cent, at 5,873.7, according to preliminary figures... Read more

The Australian dollar remained above US78c today as new retail spending numbers met expectations. At 4pm (AEDT), the local currency was trading at US78.20, very slightly down from US78.23c yesterday... Read more

Monetary policy has lost some of its sting. Low interest rates haven't boosted the Australian economy's momentum the way the Reserve Bank of Australia had expected... Read more

Mid-size deals seen driving Australia M&A volumes in 2015... Read more

Intergenerational Report: Population projected to near 40 million in 'ageing boom'... Read more

Home loans have dropped to their lowest level in almost half a century after the Reserve Bank's surprise interest rate cut in February. Mortgage rates fell to 4.9 per cent after the cut, levels not seen since 1968 - the year Martin Luther King Jnr was shot in the United States and Hey Jude by the Beatles was at the top of Australian music charts... Read more

The Reserve Bank is confident record low interest rates and a weaker Australian dollar are helping the economy, it's just taking a little longer than usual. RBA deputy governor Philip Lowe said the RBA's surprise February rate cut was partly caused by economy's sluggish response... Read more

Australian businesses in Southeast Asia are bracing for fallout from the executions of Andrew Chan and Myuran Sukumaran and souring relations with Indonesia. Mr Chan and Mr Sukumaran are among nine foreigners preparing to face the firing squad in the coming days... Read more

The Future Fund is flexing its muscles as one Australia's largest venture capital investors, tipping funds into a high-end fashion website as it seeks to take more direct stakes in promising technology start-ups. The nation's $109 billion sovereign wealth fund has been revealed as a late-stage investor in the website Moda Operandi in a deal that closed late last year.... Read more

Environment Minister Greg Hunt says an agreement with Labor and the renewable energy industry on the renewable energy target (RET) is "within reach", but it seems there are still sticking points and different views from within Government... Read more

Iron ore supply is shooting higher Australia’s biggest producers sell as much of the commodity as possible to counteract lower prices. Iron ore exports at Australia’s largest bulk commodity port have increased 28 per cent on a year ago.... Read more

Capital Mining is poised to reveal details of an acquisition, with the ASX granting the company a trading halt to prepare... Read more

Fortescue Metals Group is bolstering its balance sheet and wooing investors by refinancing $US2.5 billion ($A3.2 billion) of debt. But the iron ore miner's move has prompted ratings agency Standard and Poor's to indicate the company's secured and unsecured debt issue ratings could be downgraded... Read more

Aleator Energy has raised $237,500 through a placement of about 68 million shares priced at $0.0035 each. Funds raised will be used to pay creditors and provide working capital... Read more

Mining giant Rio Tinto is looking to slash hundreds of jobs as a new round of cost cutting gets underway. Iron ore managers have reportedly begun cutting dozens of positions at the company's Pilbara operations in Western Australia as part of a process unions fear will leave up to 800 employees out of work... Read more

Queensland Bauxite has landed $910,000 in equity funding from a Chinese investment group in a placement at $0.014 per share to finance further development of the potentially 2015 producing South Johnstone Bauxite project... Read more

A proposed uranium mine in Western Australia's Pilbara region has been granted conditional environmental approval by the State Government. One of the world's largest uranium producers, Cameco Australia, is proposing to construct and operate the Kintyre open-cut uranium mine 270 kilometres north east of Newman... Read more

Could CSL be the new CBA as the healthcare stock hits $100?... Read more

The rise of German-based cut-price supermarket chain Aldi is posing a long-term challenge to the traditional retail giants of Woolworth and Coles, according to credit ratings agency Moody's. Moody's said Aldi's penetration into the supermarket sector had mostly been at the expense of independent retailers and Metcash IGA, but the habits of traditional grocery shoppers were changing... Read more

Medical device company GI Dynamics shares are in pre-open following the ASX granting the company a trading halt... Read more

One-time retail juggernaut Abercrombie & Fitch has reportedly pulled up stumps in Australia after just two years of trying to get a foothold in the market... Read more

ASF Group raises additional $2.5M, completes rights issue... Read more

UK consultancy firm Management Resource Solutions has snapped up Queensland-based plant hire firm D&M Group. The pair have signed a conditional agreement with the founders of the privately-owned D&M Group set to get $6.7 million in cash and get 1.7 million warrants to acquire new shares in MRS at 30 pence each (58.5¢) over the next seven years... Read more

Proposal to end Automotive Transformation Scheme will create job loss 'avalanche' in SA: Nick Xenophon... Read more

Virgin boss John Borghetti expects delay before weaker dollar lures overseas tourists... Read more

Emirates boss faces subsidy claims in US. Emirates Airline President Tim Clark plans face-to-face meetings with US government officials later this month to try to counter claims by the Persian Gulf carrier's US rivals that it benefits from unfair state aid and should be constrained... Read more

The competition watchdog is taking court action against the maker of the popular painkiller Nurofen, accusing it of misleading customers with some of its products. The Australian Competition and Consumer Commission (ACCC) says at least four Nurofen products marketed as being formulated to treat specific ailments, including back pain and migraines, all contain the same active ingredient... Read more

Opinion - Callam Pickering: Why monetary policy has less pulling power... Read more

Opinion/Analysis - Adam Carr: Is China’s “new normal” a curse for Australia?... Read more

Opinion - Paul Wallbank: Telstra harnesses the winds of change... Read more

International Headlines

U.S. Market Report: U.S. stocks were little changed on Thursday, in the wake of two days of declines on the S&P 500, as gains were curbed by a higher-than-expected initial jobless claims report ahead of a report on factory orders. The Dow Jones industrial average .DJI rose 12.36 points, or 0.07 percent, to 18,109.26, the S&P 500 .SPX gained 0.54 points, or 0.03 percent, to 2,099.07 and the Nasdaq Composite .IXIC added 7.36 points, or 0.15 percent, to 4,974.50... Read more

North/South Americas Market Report: North and South American markets are mixed today. The IPC is up 0.96% while the S&P 500 gains 0.06%. The Bovespa is off 0.51%.... Read more

European Market Report: European markets finished higher today with shares in Germany leading the region. The DAX is up 1.00% while France's CAC 40 is up 0.94% and London's FTSE 100 is up 0.61%.... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 0.26%, while the Hang Seng led the Shanghai Composite lower. They fell 1.06% and 0.95% respectively.... Read more

Brent crude futures pared early gains on Thursday to hover just under $61 as the euro slipped to an 11-year low against the dollar, offsetting concerns about tensions in Iraq and Libya... Read more

Oil prices climbed in Asian trade Thursday as signs that a refineries strike in the United States is weakening overshadowed a rise in US crude stocks, analysts said. US benchmark West Texas Intermediate added 21 cents to $51.74 a barrel and Brent gained four cents to $60.59 in afternoon trade... Read more

U.S. factory orders fall for sixth straight month... Read more

U.S. jobless claims rise; fourth quarter productivity revised down... Read more

The largest U.S. banks and their foreign rivals are facing a tough two-step check-up of their financial health by the Federal Reserve, forcing the firms to get a far better grip on how they measure risk. In its annual "stress tests", the Fed gauges whether banks have enough shareholder capital to withstand a severe economic shock like that of the 2007-09 crisis, when taxpayers spent billions of dollars to keep the industry afloat... Read more

The DIY industry is coming to Wall Street. Etsy, an online marketplace for homemade crafts, arts and jewelry, filed its initial public offering Wednesday. The company wants to raise $100 million and will list on the Nasdaq under the ticker symbol ETSY... Read more

Costco Wholesale Corp reported a better-than-expected quarterly profit, helped by a tax benefit related to its special cash dividend last month. Costco, the third-largest U.S. retailer, said net income rose to $598 million, or $1.35 per share, for the second quarter ended Feb. 15, from $463 million, or $1.05 per share a year earlier... Read more

Citigroup's past losses may have helped it win Costco business.... Read more

Citigroup has sold its nearly 10 percent stake in Turkey's Akbank for $1.2 billion, the U.S. lender said on Thursday, its latest disposal of overseas assets to cut costs and boost capital. New York-based Citi has pared back internationally in recent years, pulling out of retail banking in Turkey and in long-established markets such as Japan... Read more

AbbVie Trumps J&J With a $21 Billion Deal in Cancer Therapy Push... Read more

Specialty drugs company Mallinckrodt plc said Thursday it has agreed to buy privately-held critical care company Ikaria Inc. from an investor group led by private-equity firm Madison Dearborn, in a deal valued at about $2.3 billion... Read more

ECB raises growth forecasts, to start printing money next week. The European Central Bank will launch into quantitative easing next week having increased its economic growth forecasts for this year and next. President Mario Draghi said the first bond purchases with new money would take place on March 9.... Read more

Greece cannot rely on the European Central Bank to raise a limit on Athens' issuance of short-term debt, ECB President Mario Draghi suggested on Thursday. He also said the rules meant the ECB could not buy Greek bonds under its new asset-buying program... Read more

German manufacturing orders fell sharply at the start of the year, nearly wiping out the previous month's gains, data from the country's economy ministry showed Thursday... Read more

Virgin Money, the financial services provider which floated on the stock market in November, has reported "record performance and profits". Underlying pre-tax profits were £121.2m for the year to 31 December, up 127% on 2013... Read more

The Bank of England held its benchmark interest rate steady Thursday, marking six years since officials cut borrowing costs to record-low levels to combat a deep recession. The BOE said its rate-setting Monetary Policy Committee kept the central bank's benchmark rate at 0.5 per cent, after its monthly policy meeting. The panel also agreed to leave the size of the BOE's bond portfolio unchanged at GBP375 billion ($A734.7bn)... Read more

SFO launches investigation into Bank of England auctions amid rigging fears. Serious Fraud Office starts probe into liquidity auctions during financial crisis... Read more

Hotel chain Mandarin Oriental has confirmed that credit card data has been stolen in a hack attack on the company's network. The data went astray from card processing systems in the company's hotels in the US and Europe... Read more

Irish government expects further IAG offer for Aer Lingus: Deputy PM... Read more

Russian inflation reached 16.7 per cent in February as lower oil prices and Western sanctions over Ukraine caused the biggest jump in prices over one year since 2002, the state statistics service said Thursday... Read more

Russian stocks tiptoe into a bull market... Read more

Brazil’s real fell past 3 per dollar for the first time in a decade as fiscal turmoil and signs of economic contraction stoked speculation that the nation may lose its investment-grade credit rating. The real slid 0.5 percent to 2.9957 per U.S. dollar at 1:23 p.m. in Sao Paulo after touching 3.0023, the weakest intraday level since 2004. Net overseas holdings of futures contracts betting against the real reached a record $38.1 billion March 2... Read more

Brazil raises interest rates to 12.75% to curb inflation... Read more

China signals 'new normal' with higher spending, lower growth target. China plans to run its biggest budget deficit in 2015 since the global financial crisis... Read more

Alibaba muscles in on Amazon's turf with new US data centre. Alibaba is today launching a cloud computing hub in Silicon Valley, the e-commerce giant's first outside of China, underscoring its global ambitions in the face of stiff and entrenched competition... Read more

Huawei, Intel expand tie-up amid China's rising scrutiny of U.S. tech firms... Read more

India’s support of state-controlled banks is shifting to target the most profitable lenders for capital injections, rather than propping up weaker peers, as the nation seeks to build a more robust financial system... Read more

Malaysia's 1MDB to be dismantled under debt plan - sources. Malaysia's indebted and controversy-ridden state investor 1MDB will be left as a skeletal structure and possibly dissolved under a debt repayment plan in which most of its assets will be sold, sources with direct knowledge of the matter said. The power and property fund, a pet project of Prime Minister Najib Razak with assets worth $14 billion, was hit by losses last year and nearly defaulted on a loan payment... Read more

Bad Air Chokes New Delhi’s Livability Ranking... Read more

Opinion/Analysis - Gabriele Parussini: Why is RBI’s Rajan So Full of Surprises?... Read more

Opinion - David Marsh: ECB will need more creative accounting to deal with Greece... Read more

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