ASB Securities Morning Brief for Saturday, 30 May 2015
Saturday, 30 May 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose, led by Fisher & Paykel Healthcare after its annual results beat forecasts. Nuplex Industries extended recent gains. The NZX 50 Index rose 67.312 points, or 1.2%, to 5844.949. Within the index, 35 stocks rose, 11 fell and four were unchanged. Turnover was $248 million... Read more

The New Zealand dollar is heading for a 2.4% weekly drop against the greenback as comments by Federal Reserve officials revive expectations the world's biggest central bank will hike interest rates this year, while investors grow wary about the local outlook. The kiwi sank to 71.32USc at 5pm in Wellington from 73.11USc on Friday in New York last week. It traded at 71.74USc at 8am and 72.42USc yesterday. The trade-weighted index declined to 74.83 from 75.92 yesterday, and is heading for a 2% fall on the week... Read more

Business confidence drops significantly as economic pulse slows... Read more

The Reserve Bank of New Zealand is pressing ahead with proposals to create a new asset class for lenders, which will let it target Auckland property investors as a means to take the heat out of the market in the country's biggest city, despite opposition from the majority of submissions... Read more

Reserve Bank investor rules may apply to holiday homes and baches... Read more

Bank CEO suggests many Auckland residential property investors will be able to side step incoming RBNZ 30% deposit rule... Read more

Declining trend in building consents. Building consents have fallen nationwide – except for in Auckland. The latest Statistics NZ data shows that 2,112 new dwellings were consented in April, which is up 1.4% from April last year... Read more

Edge Mortgages switches groups again. Two of the biggest mortgage writers in the Kepa Group have switched camps and moved to New Zealand Financial Services Group.... Read more

Co-Operative Bank posts 24pc lift in profit... Read more

ASB reported strong lending in the three months to March this year, and the bulk of that has come from borrowers with more than 20% equity in their loans... Read more

Accountant war breaks out. CPA Australia is taking defamation action against The New Zealand Institute of Chartered Accountants, alleging its rival made false and defamatory statements, alleging "inferior" education standards, lack of global affiliations, misuse of membership fees and a "second-rate designation", according to a CPA statement of claim lodged with Wellington High Court... Read more

The Financial Markets Authority has launched a massive investigation into life insurance churn using special powers it has under law.... Read more

The Government is thinking about automatically enrolling everyone in KiwiSaver, now it's scrapped the $1000 kick-start payment. It has previously considered what it calls mass auto-enrolment but with the kick-start payment in place it would have been too expensive... Read more

New Zealand wool prices remained elevated at auction this week, with lamb wool touching a fresh four-year high, as less wool was offered for sale... Read more

New superfood for cows could boost GDP by $340m. A top economic analyst is backing a new superfood set to give a massive boost to New Zealand's dairy industry. Massey University did a seven-year study into a cow feed supplement programme designed to improve efficiency for dairy farmers... Read more

Hellaby Holdings, the NZX-listed diversified investment company, has sold its packaging division to Coveris, one of the world's largest plastic packaging and coatings companies. Hellaby's packaging division comprises Elldex Packaging and Elldex Packaging Australia and employs 125 people who are all expected to retain their jobs under the deal. The enterprise value of the sale is about $30 million, including the carrying value for transaction costs and will be used to reduce debt. Hellaby's debt sat at $79 million as at December 31, 2014... Read more

SeaDragon sinks into the red as rising factory cost offsets surge in sales. The shares climbed two tenths of a cent, 11 percent, to 2 cents, having dropped 18 percent this year. That values SeaDragon at $37.5 million... Read more

Listed food and beverage investor Veritas Investments has downgraded its full-year profit guidance by $1 million following a review of its second half performance. The company issued a statement to the NZX today saying its net profit after tax for the year ending June 30 will likely be $4.3 million. Shares in the company have fallen 52c from late January, to 80c a share, having dropped earlier this week to 77c.... Read more

Smartpay profit falls 9.5% as foray into Aussie cab market costs it major contract... Read more

Caniwi Capital snaps up another Wellington student apartment complex... Read more

Treble Cone Partners with Resorts of the Canadian Rockies. Treble Cone (Wanaka New Zealand) is excited to announce a marketing and reciprocal partnership with Resorts of the Canadian Rockies who operate Kicking Horse, Fernie and Kimberley amongst other areas... Read more

Vodafone Rural Broadband uptake prompts inquiry call. Labour has called for an inquiry over the number of customers who have signed up to a wireless broadband service subsidised through the $435 million Rural Broadband Initiative.... Read more

Unitholders in the Dorchester Property Trust have rejected a resolution from one of the investors to dump the manager of the hotel investor which was spun out five years ago from the financier and insurer formerly known as Dorchester Pacific and since renamed Turners... Read more

NZAM has appointed Brigette Arnold to its senior management team.... Read more

Fairfax vague on restructure details. Attempts to obtain further details of the restructure at Fairfax Media have gone unanswered.... Read more

Former Prime Minister Dame Jenny Shipley's lawyer says she will vigorously defend legal action she is facing from the liquidators of collapsed property group Mainzeal. Liquidators confirm they have filed a court claim involving allegations of a breach of directors' duties... Read more

Music website trader guilty of fraud. Online musical instrument store owner Andrew Marquet Taylor has been sentenced to 9 months home detention, ordered to pay more than $91,000 in compensation and fines in the Auckland District Court yesterday. Mr Taylor was also banned from using the internet for 3 months... Read more

Honda NZ threatening legal action over 2 Cheap Cars Ad... Read more

Opinion - Fran O'Sullivan: Saudi deal: bribe or facilitation payment? Auditor-General Lyn Provost must investigate Murray McCully's secret Saudi deal, which is attracting far too much adverse comment on the international stage to be easily swept under the carpet... Read more

Opinion - Brian Gaynor: IPO puts spotlight on Aussie dairy sector. Trust set-up raises issue of whether farmer shareholder and external investor interests in Fonterra are fully aligned... Read more

Opinion - Paul Goldsmith: Government seeks submissions on financial advice laws... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket surged more than 1 per cent today, as a slip in the Australian dollar sparked international investor buying of high-yielding stocks. At the 4.15pm (AEST) official market close, the benchmark S&P/ASX200 index was 64.1 points, or 1.12 per cent, higher at 5777.2, while the broader All Ordinaries index was up 60.3 points, or 1.06 per cent, at 5774.9.... Read more

The Australian dollar’s slide on weaker-than-expected business investment figures has eased ahead of more key economic readings. At 5pm (AEST), the local currency was trading at US76.53c, down from US76.94c yesterday. It fell as low as US76.18c in the early hours of today’s trading, its weakest level since April 15 due to yesterday’s surprisingly soft business investment figures... Read more

The Reserve Bank is unlikely to cut rates further next week as it balances the need to boost economic growth while keeping Sydney and Melbourne house prices under control. Market pricing for a June rate cut has remained at just four per cent this week, despite Thursday's downbeat capex data which showed business investment slumped in the March quarter, and will likely fall further in the coming financial year... Read more

AAA credit rating: Australia's fiscal position 'rather rosy'... Read more

Senate vetoes will add $101 billion to federal deficits over a decade unless deals are done to legislate Tony Abbott’s most unpopular reforms, according to new figures that reveal the cost of the political stand-off... Read more

Economists find little joy in data. A bleak quarterly survey of business investment plans has economists reviewing their forecasts.... Read more

China improving at Australian M&A: FIRB. Chinese investors are becoming increasingly sophisticated about their knowledge of Australia, according to Foreign Investment Review Board chairman Brian Wilson. Mr Wilson, who will be heading to China later this year to ­explain Australia’s foreign investment policy, says the big Chinese companies now have an “increasing level of comfort” with the Australian foreign investment regime... Read more

Treasurer Joe Hockey's second budget has gone over well with small businesses, with close to 60 per cent backing the government's $5.5 billion support package. The package was predictably most popular with businesses that will reap the benefits of the government's tax cuts and incentives, though larger businesses were less enthusiastic... Read more

Housing prices across Australia fell by a little less than one per cent in May, with the usual seasonal variation the likely reason. CoreLogic RP Data will publish its estimate of home values on Monday,... Read more

Younger middle income earners are set to bear the brunt of changes to the aged pension assets test according to newly released modelling by Industry Super Australia. On May 7 the Federal Government announced an increase in the amount of assets people could own in addition to their family home while still being able to access the full pension... Read more

Corporate regulator ASIC has raised the prospect of introducing a “bad apples” register for stockbrokers, to avoid problem traders being rehired elsewhere in the ­industry. This would mirror the US system, which allows prospective employers to track why a stockbroker left the previous firm. However, such a register raises concerns that a system could be open for abuse... Read more

Oil Search boss Peter Botten has warned oil prices are likely to stay low for the next five years, putting up to $5.5 trillion worth of projects around the world at risk. Mr Botten said the rise of US shale producers, combined with OPEC countries' determination to preserve their market share meant it would be difficult for oil prices to rise significantly above their current levels... Read more

International Goldfields lists on Frankfurt Stock Exchange... Read more

Cockatoo Coal, Minera Gold have both doubled in price today... Read more

WA winemakers want Coles and Woolworths in the firing line when a Senate inquiry looks at how lucrative tax rebates apply in the industry. Wines of WA chief executive Larry Jorgensen said the big retailers were pushing more of their labels onto liquor store shelves and cashing in on Commonwealth tax rebates of up to $500,000 a year... Read more

Virgin boss cool on open skies plan. Virgin Australia boss John Borghetti has rubbished a federal government plan to allow foreign airlines to fly domestic routes in the country's north, saying it simply wont work... Read more

Shares in migme rose after the social media and entertainment company announced it was expanding its artist engagement program to the Philippines and had achieved more than 16 million active monthly users on its platform. Shares in migme were up eight cents, or 9.41 per cent, to 93 cents at 9.45am.... Read more

All is not lost for Australia's NewSat, the beleaguered satellite communications company that was handed a setback with the loss of a key contract last week... Read more

Telstra has deployed a predictive analytics system that uses its operational data to help identify network issues before they occur. The big data facility is managed by CTO Vish Nandlall, who described it as “one of the largest Hadoop infrastructures in Australia”... Read more

A toll road that runs across northern Indiana exited bankruptcy protection and will now be operated by Australia's IFM Investors. IFM Investors paid $US5.73 billion ($A7.48bn) to operate the 157-mile road between the Ohio Turnpike and Chicago Skyway for the next 66 years. The deal closed this week, according to a filing in US Bankruptcy Court in Chicago... Read more

Are Aussie airlines losing the battle for international market share?... Read more

BBY trust accounts missing money, KPMG says; clients out of pocket millions of dollars. Two weeks after the very public collapse of broker BBY, clients have no idea of the state of their investments, with administrator KPMG today releasing a statement saying the broking firm may not have enough money to pay creditors. KPMG said they believed some clients' money was missing from BBY's trust accounts... Read more

Bianca Rinehart takes swipe at Gina. Gina Rinehart's daughter Bianca has taken a thinly-veiled swipe at her mother, saying the multibillion dollar family trust will now be managed in the children's best interests... Read more

Gina Rinehart's son John Hancock has taken aim at federal Agriculture Minister Barnaby Joyce over his involvement in a dispute over a multi-billion-dollar family trust. On Thursday, the New South Wales Supreme Court ordered that Gina Rinehart's daughter Bianca Rinehart be appointed trustee of the funds, currently worth more than $4 billion... Read more

Opinion - Michael Pascoe: Joe Hockey waiting on a tradie miracle. It's not even three weeks old, but after a happy birth, Joe Hockey's second budget has been sent to the sick bay by the latest private fixed capital expenditure data... Read more

Opinion - Peter Cai: The economics of wealth and sadness... Read more

International Headlines

North/South Americas Market Report: North and South American markets finished broadly lower today with shares in Brazil leading the region. The Bovespa is down 2.25% while U.S.'s S&P 500 is off 0.63% and Mexico's IPC is lower by 0.23%... Read more

European Market Report: European markets finished broadly lower today with shares in France leading the region. The CAC 40 is down 2.53% while Germany's DAX is off 2.26% and London's FTSE 100 is lower by 0.80%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 0.06%, while the Shanghai Composite led the Hang Seng lower. They fell 0.18% and 0.17% respectively... Read more

Gold futures score first monthly gain since January... Read more

The US economy contracted early this year as harsh weather and a strong dollar sapped demand for American goods, underscoring the choppiness of an expansion that has struggled to lift off. Gross domestic product, the broadest sum of goods and services produced across the economy, shrank at a 0.7 per cent seasonally adjusted annual rate in the first quarter, the Commerce Department said on Friday. The agency previously estimated output grew 0.2 per cent from January through March... Read more

The government reckons that the American economy shrank over the winter, but no one really believes it. Specifically, the Bureau of Economic Analysis on Friday revised the nation’s gross domestic product to a new estimate that it contracted by 0.7 percent in the first three months of the year from its initial guess that the economy grew over the winter at an annual rate of 0.2 percent... Read more

Intel Corp. is in close talks to buy smaller chip maker Altera Corp. for about $15 billion, the New York Post reported late Thursday... Read more

Getting sued just before you want to sell stock on Wall Street is never a good sign. We'll soon find out if it has an impact on the initial public offering plans of Fitbit, the industry leader in fitness tracking wearable technology. One of Fitbit's key rivals, Jawbone, filed a lawsuit against Fitbit in California earlier this week. Jawbone claims that Fitbit poached employees and stole the company's trade secrets and intellectual property... Read more

Humana Inc. is exploring a sale, after the health insurer was approached by Cigna Corp. about a potential deal, a person with knowledge of the matter said. The company’s shares rose 20 percent to $214.65 at the close in New York on Friday, giving it a market value of $32.2 billion.... Read more

Snapchat Inc. disclosed it has offered to sell $650 million of stock in a private placement, an opportunity for the company and insiders to profit from the messaging company’s popularity. According to a filing Friday with the Securities and Exchange Commission, more than $537.6 million was sold from the offer and that $112.4 million remained available... Read more

Apple stock is great. So are many of its suppliers' stocks. There are quite literally hundreds of Apple suppliers. The top 200 of these companies help the Mac maker procure over 97% of what it needs, including manufacturing, assembly, and materials.... Read more

Canada’s GDP Contracts the Most Since 2009... Read more

Silk Road founder Ross Ulbricht sentenced to life in prison... Read more

Fifa sponsors call for quick reform as Blatter re-elected... Read more

Greek bank deposits plunged to their lowest level in 10-and-a-half years in April as Athens continues to be locked in negotiations with its international creditors... Read more

Some blame EU Commission for Greek obstinacy in debt talks... Read more

Germany's Chambers of Commerce and Industry has warned that a UK exit from the European Union (EU) would be "disastrous" for Britain and Germany. Volker Treier, deputy chief executive of the organisation, told the BBC that German business is "astonished" that the UK is planning a referendum over its EU membership. Prime Minister David Cameron is due to meet Angela Merkel in Berlin on Friday... Read more

French President Francois Hollande and German Chancellor Angela Merkel have called on Russian President Vladimir Putin to rapidly implement measures agreed under the Feb.12 Minsk ceasefire, Hollande's office said in a statement... Read more

Russian-Japanese forum offers new ideas for investment. New opportunities for bilateral investment were the main theme of the third annual Russian–Japanese Forum on Cooperation in Business, Technology and Culture in Tokyo on May 21. RBTH looks at the main ideas shared at the event.... Read more

Russia is to ban fish imports from the Baltic states of Latvia and Estonia, its food safety watchdog said Friday, citing violations... Read more

Ruble, oil rebound boost Russia-focused hedge funds... Read more

Brazil's economy shrank in the first quarter of the year as severe droughts held back growth, the country's statistics agency reported. It contracted by 0.2% compared with the previous three months, the government's statistical agency said. However, this was not as bad as the 0.5% contraction that economists had expected.... Read more

China's Richest Lost $6 Billion in One Day This Week. They're Still Up $83 Billion This Year... Read more

Malaysia-based AirAsia, the region's biggest low-cost carrier by fleet size, said its first-quarter net profit climbed seven percent year-on-year due mainly to lower fuel and operating costs. Net profit for the quarter ending March 31 was 149.3 million ($40.8 million) the company said in a statement late Thursday, while revenue dipped 0.4 percent to 1.30 billion ringgit... Read more

Japanese household spending unexpectedly fell in April while inflation and factory output were also lacklustre, a string of official data showed Friday, aggravating concerns about the world's third-largest economy. The figures come as economists warn Japan could see a weak second quarter, following a better-than-expected 0.6 percent expansion -- or 2.4 percent at an annualised rate -- during the first three months of the year... Read more

Japan's bankrupt Skymark Airlines submits turnaround plan... Read more

India's economy surges by 7.5% in first quarter... Read more

5 Things You Need to Know About India’s GDP Growth. India’s economy expanded by 7.3% in the year ended March, a four-year high, the statistics ministry said Friday. Here are five things to know about the data... Read more

Opinion - Tim Mullaney: U.S. oil producers are back in the money, but OPEC is not... Read more

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