ASB Securities Morning Brief for Tuesday, 01 December 2015
Tuesday, 01 December 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares were mixed as Xero and Orion Health Group extended their decline, while Fisher & Paykel healthcare rose on a strong full-year earnings outlook. The S&P/NZX 50 Index fell 0.87 points, or 0.01 percent, to 6100.15. Within the index, 23 stocks rose, 21 fell and 6 were unchanged. Turnover was $243.4 million... Read more

The New Zealand dollar was little changed ahead of tomorrow's Reserve Bank of Australia policy review, kicking off a busy week for economic data and central bank activity. The kiwi traded at 65.38 US cents at 5pm in Wellington from 65.27 cents at 8am and 65.30 cents on Friday in New York. The trade-weighted index slipped to 71.28 from 71.47 last week... Read more

New Zealand business confidence rose to a six-month high in November, signalling a pick-up in the economy. A net 14.5 per cent of businesses were confident about the general outlook for the economy over the coming year, up from 10.5 per cent last month, according to the ANZ Business Outlook survey. A net 32 per cent of firms see their own activity expanding in the coming year, up from a net 23.7 per cent in October... Read more

Business confidence has risen for the third month in a row, with New Zealand's largest bank saying it was "pretty clear" the economy has picked up pace. A week out from a finely balanced review of the official cash rate (OCR), ANZ chief economist Cameron Bagrie has urged the Reserve Bank not to "waste a bullet" by cutting interest rates before Christmas... Read more

Westpac economists say the Reserve Bank will have its work cut out to try to get inflation back to the targeted 2%... Read more

RMA reforms just tinkering. More than Resource Management Act (RMA) reforms are needed to boost development, says a well-known developer.... Read more

The latest Statistics New Zealand consent data shows that Auckland consented 805 new dwellings in October 2015. This was up by 162 on the 643 new dwellings consented in September 2015 and up by 214 on the 591 new dwellings consented in October 2014... Read more

Dwelling consents in Auckland just two thirds of what is required to keep pace with migration-fuelled population growth... Read more

Growing numbers of Kiwis risk becoming homeless in old age because of falling home ownership rates, rising rents and static housing subsidies, the Salvation Army says... Read more

The country's auditors are still struggling to meet minimum accounting standards, with less than a fifth reviewed by the Financial Markets Authority characterised as 'good' and the rest needing to improve... Read more

Finding Goldilocks solution. A package of Financial Adviser Act (FAA) changes that brings in competency and ethical obligations for all advisers is likely the “goldilocks” solution that has the best chance of becoming law, it has been claimed... Read more

PwC strengthens its tax service offerings... Read more

Fonterra has hitched its wagon to Australian rising star Bellamy's with a five-year, multi-million deal to manufacture the company's organic baby powder range at Fonterra's Darnum plant. The Darnum plant in Victoria already processes milk supplied by Fonterra's Australian farmers. The milk used for Bellamy's products will not come from Fonterra farmers because none of them are organic... Read more

The Ministry for Primary Industries (MPI) says it had started an investigation into the alleged mistreatment of bobby calves well before the issue came to light in a television programme over the weekend... Read more

The company which last year lost an application to mine iron ore from the South Taranaki seabed is applying for a new permit. Trans-Tasman Resources (TTR) confirmed it is preparing a new consent application for the Environmental Protection Authority (EPA) and had spent millions in scientific and environmental studies to understand the effects of the project on the South Taranaki Bight since its failed attempt... Read more

TransTasman label converter Hally Group, with operating subsidiaries Hally Labels (Brisbane, Christchurch, Auckland), AC Labels (Sydney) and MarkIt Labels (Christchurch), is being acquired by Hexagon Holdings. The acquisition is for 100% of the shares of Hally Group. The Hally Group, established in 1965, has built significant market positions in fresh food, beverage, manufacturing, shelf stable food, pharmaceuticals, nutraceuticals & horticulture... Read more

Naturopath, medical herbalist and nutritionist Kirsten Taylor is targeting the US$800 million ($1.2 billion) sleep medication market as part of global expansion plans for SleepDrops. Taylor developed the product for her own use in 2009, but it was the realisation that she was not the only person with sleep issues that led her to form the SleepDrops business, which is now on track to sell around $2 million of wholesale product in New Zealand this year... Read more

Snakk Media narrowed its first-half loss as it fattened margins on increased revenue, led by faster growth in Southeast Asia. The company aggregates publishers' advertising space on mobile devices and matches it to advertisers' demand. The Auckland-based company reported a net loss of $240,000, or 0.9c per share, in the six months ended September 30, from a loss of $2.2 million, or 0.83c, a year earlier.... Read more

Westfield spinoff company Scentre has sold three of its New Zealand shopping malls to jettison some of its lower performing properties, a retail analyst says. Up until last week Scentre owned or half owned nine New Zealand malls worth $1.8 billion, but on Friday it announced the $549 million sale of three of those centres... Read more

Mansons planning $1 billion worth of projects... Read more

Christchurch's once-bold central city recovery plan is hanging in the balance with Treasury saying it now appears unachievable. But Earthquake Recovery Minister Gerry Brownlee has dismissed the Treasury report, released on Monday, calling it "utter tripe". He says the findings show the "arrogant bureaucratic attitude" the Wellington-based department has towards Christchurch... Read more

The Christchurch City Council is selling its construction and maintenance company, City Care, to raise money for the rebuild. The sale is the first step in a capital release programme aimed at raising up to $200 million this financial year from council-owned commercial assets and up to another $550 million in the next two years... Read more

Mail operations and document management company G3 Group, which listed on the NXT platform in June, reported a 29% drop in first-half profit. This came from one-off NXT listing costs, restructuring the business and sales falling from a year-earlier boom when customers got in ahead of a postage price hike... Read more

Two New Zealand wines win trophies at International Wine and Spirit Competition... Read more

Government's RealMe in doubt as Treasury calls for 'pause'... Read more

Three Blenheim businessmen have been appointed directors of Marlborough Lines.... Read more

The New Zealand Superannuation Fund has appointed Will Goodwin as Head of New Zealand Direct Investment.... Read more

The Irrigation Acceleration Fund and Environment Canterbury (ECan) are spending $636,000 on a water use model for South Canterbury. A Ministry for Primary Industries (MPI) spokesperson confirmed on Monday afternoon the ministry would put $318,000 into a "water resources model" which could "provide options to aid decision making about irrigation in South Canterbury"... Read more

Affco New Zealand and the NZ Meatworkers Union will sit down to mediation this week after the Employment Court ruled that the Talleys Group-controlled meat processor unlawfully locked out workers and didn't act in good faith... Read more

Ratepayers owed $300,000 by failed Wellington call centre CallActive... Read more

ANZ has breached the conditions of its banking registration, but will not be punished by the Reserve Bank. The country's largest lender admitted the breach in its quarterly disclosure statement. It said it had not included the Bonus Bonds Trust and ANZ PIE Fund in the risk-weighted exposures of its capital calculations... Read more

Carter Holt Harvey, the building products manufacturer and supplier owned by billionaire Graeme Hart, will argue its case over whether it can be held liable in the Ministry of Education's leaky schools case in the Supreme Court. Justices William Young, Susan Glazebrook and Terence Arnold granted the manufacturer leave to appeal a ruling in the Court of Appeal, which largely threw out Carter Holt's bid to toss out the ministry's claim... Read more

Opinion - Liam Dann: Big sales are a dime a dozen so what's so special about Black Friday and Cyber Monday?... Read more

Opinion - Jason Krupp: The New Zealand Initiative’s Jason Krupp grudgingly argues that Auckland Council is right to give Nimbys the finger... Read more

Opinion - Mieke Welvaert: Mieke Welvaert asks the burning questions. Have the new regulations tipped the scale? Will Auckland house prices fall? What about Auckland's neighbours? And, will the rest of the country be affected?... Read more

New Zealand Herald Editorial: Consumers expect better from farmers... Read more

Australian Headlines

The Australian sharemarket retreated on Monday, with the main falls in China-exposed materials stocks as an embattled BHP Billiton led the retreat. At the 4.15pm (AEDT) official market close, the benchmark S&P/ASX200 index was down 36.1 points, or 0.69 per cent, at 5166.5, while the broader All Ordinaries index fell 33.2 points, or 0.63 per cent, to 5218.2.... Read more

The Australian dollar has fallen below US72 cents as last week’s weak business investment figures and falling commodity prices weigh on the currency. At 7am (AEDT), the local unit was trading at US71.95 cents, down from US72.30 cents on Friday.... Read more

The Reserve Bank is chilling out on cutting the cash rate - at least until next year. All 13 economists surveyed by AAP expect the RBA to keep the cash rate at two per cent at its December meeting on Tuesday, but six are predicting that there will be a cut early in 2016... Read more

Australian businesses are forecasting a lacklustre new year, with lowered expectations for sales, profits, employment growth and investment... Read more

Australia is not as "open for business" as the Coalition government claims, says the main lobby group representing the country's biggest companies. The Business Council of Australia (BCA) said the government's plan to slash the screening threshold for overseas investment in farmland and food businesses was "actively discouraging foreign investment" and had little justification... Read more

A Productivity Commission report is set to reveal billions could be wiped from the budget deficit if retirees tap into the around $1 trillion tied up in the family home, with a higher standard of living to result for those willing to use more equity from their homes... Read more

The participation of women in the Australian labour force has increased substantially over the last few decades, but women still retire with around half as much superannuation as men. Women are still more likely than men to have interrupted career patterns and work casually or part-time. Women have longer life expectancies than men and generally retire younger, so they spend longer in retirement, on average, than men do... Read more

Scott Morrison has no intention of repeating the mistakes of former Labor treasurer Wayne Swan - predicting budget surpluses only to look "foolish" when they are not met. A new analysis by Deloitte Access Economics suggests a return to surplus is now beyond the 2019/20 financial year predicted by former Liberal treasurer Joe Hockey in May... Read more

Australian agriculture to Asia looks like being the next big thing... Read more

Prime Minister Malcolm Turnbull won't sign an international agreement to phase out fossil fuel subsidies amid concerns it could jeopardise Australia's diesel fuel rebates. Mr Turnbull has opted out of signing the key fossil fuel subsidy reform communique at major United Nations climate talks in Paris, a government spokeswoman confirmed... Read more

Iron ore is trading below $US43 a tonne for the first time in around a decade as a worrying supply-demand dynamic continues to weigh on sentiment. At the end of the latest session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US42.80 a tonne, down 1.6 per cent from its prior close of $US43.50 a tonne. Elsewhere, iron ore futures in Singapore slid under $40 a tonne for the first time.... Read more

Mineral sands producer MZI Resources has confirmed that Accent Resources (ASX:ACS) has become a substantial shareholder in the company via its investment in a major recent fundraising drive. Accent has acquired 10 million shares, or 6.25% of MZI at an issue price of A$0.40 per share for a total consideration of $4 million... Read more

Northern Minerals is preparing to outline details of a funding package, with the ASX granting the company a trading halt to prepare.... Read more

More commodity price uncertainty ahead in 2016, Citi forecast says... Read more

Killara Resources has been granted a trading halt by the ASX, with its shares placed in pre-open... Read more

Brazil hits BHP with big lawsuit. BHP Billiton says it will not be able to assess the impact of a threatened $7.2 billion lawsuit from the Brazilian Government until the legal action has been filed... Read more

Authorities have threatened a $7.2 billion legal suit over the mine disaster in the south-eastern state of Minas Gerais in Brazil, BHP Billiton says.... Read more

Metro Mining has been granted a trading halt by the ASX, pending details in connection with a potential material acquisition by the company... Read more

Enerji Limited gets ready to raise... Read more

Boss Resources set to reveal material acquisition... Read more

One of corporate WA's longest-serving leaders, Mincor Resources' founding managing director David Moore, has resigned but been quick to point out the move is unrelated to the nickel price crisis. The well-regarded Mr Moore will hand over to Mincor chief operating officer Peter Muccilli in February... Read more

MSM Corporation raises $7M in tech transition... Read more

Animoca Brands is heading to market with a capital raising, and the ASX has granted the company a trading halt to prepare.... Read more

Cossets crowd-funding sets sights on Australian property market.... Read more

Satterley Property Group intends to develop a masterplanned community on about 140 hectares it has acquired in the Swan Valley for more than $90 million... Read more

Dick Smith shares take a 70 per cent nose dive as the retailer warns of a gloomy Christmas... Read more

Electronics retailer Dick Smith has had nearly $90 million wiped off its market value after a sales downturn forced it to abandon its profit forecast. Just weeks after revealing sales had been disappointing during October, the retailer on Monday said the trend had continued into November... Read more

Woolworths has revealed its big play to turn around its struggling business: Its supermarkets are taking on the takeaways. The supermarket giant plans to expand its range of gourmet ready meals, taking inspiration from the success of UK retailers such as Marks and Spencer, Tesco, Sainsburys, Waitrose and Asda. Woolworths estimates the prepared meals sector, excluding restaurants and cafes, is worth $22 billion a year.... Read more

Diploma Group’s minority shareholders have slapped down executive pay in the wake of an abandoned privatisation of the property development and construction company. Diploma’s shares were down 0.1 cents to 1.6 cents at 12.31pm.... Read more

The unsuccessful foreign bidders for the Kidman & Co landholding are working on new bids with Australian investors which they hope to lodge before the end of the year, the ABC understands. The bids are expected to exclude the largest of the 10 cattle stations in the portfolio, Anna Creek Station... Read more

3D Medical has entered into a reseller agreement with Client Outlook Inc. for the distribution of the eUnity medical image viewing and collaboration platform. The deal represents an expansion of 3DM’s capability to value-add medical image data on (following a recent merger with Mach7 Technologies), and is expected to precipitate the announcement of first revenues in the next quarter... Read more

Stargroup, formerly iCash Payment Systems, has doubled in size after acquiring an ATM network including 104 cash machines for A$6.3 million. The acquisition of the network from Cash Plus Australia is expected to double Stargroup’s annualised transactions from about 1 million to about 2 million... Read more

More countries covered, but charges go up. Telstra has hiked one-off and excess data usage charges for international mobile roaming customers just ahead of the holiday season... Read more

Former iiNet chief executive David Buckingham has been appointed to the vacant chief financial officer’s position at education provider Navitas. Mr Buckingham, who left iiNet after TPG Telecom’s recent takeover of the WA internet pioneer, will take up the role in late January... Read more

Maxsted defends Westpac pay packets. Westpac chairman Lindsay Maxsted has defended the bank's accounting practices amid claims from proxy firm Ownership Matters that results were distorted in order to ensure bonuses for key executives, The Australian Financial Review reports... Read more

Vocation collapses, 150 people lose jobs, 10,000 students in limbo.... Read more

Opinion/Analysis - Adele Ferguson: Why has Dick Smith's share price fallen so low, so fast?... Read more

Opinion - Jayant Menon: The TPP's long and winding road... Read more

International Headlines

North/South Americas Market Report: North and South American markets are lower today with shares in Mexico off the most. The IPC is down 0.61% while Brazil's Bovespa is off 0.54% and U.S.'s S&P 500 is lower by 0.21%... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The DAX gained 0.78% and the CAC 40 rose 0.56%. The FTSE 100 lost 0.30%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 0.26%, while the Nikkei 225 led the Hang Seng lower. They fell 0.69% and 0.33% respectively... Read more

Oil prices traded below $42 in Asia Monday ahead of an OPEC meeting and the release of data on China's important manufacturing sector later in the week... Read more

The U.S. Federal Reserve and European Central Bank are expected to deliver sharply contrasting policy decisions next month, reflecting how the world's two largest economies have moved from the Great Recession to the Great Divide... Read more

The Federal Reserve Board on Monday approved a proposal to curb its emergency lending powers, a change demanded by Congress after the central bank's controversial decision to aid AIG, Citigroup and others in 2008. The rule, unanimously approved by the Fed's Washington-based board in an open meeting, requires that any future emergency lending be only "broad-based" to address larger financial market problems, and not tailored to specific firms... Read more

Gold heads for biggest monthly drop since 2013. Gold falls as bets that the US Federal Reserve will raise interest rates in December for the first time since 2006 pushes pound below $1.50 mar... Read more

The number of existing homes that went under contract in the US inched up in October, a sign the housing market remains stable heading into the final months of the year... Read more

U.S. holiday shopping is on track for a modest 3.7 percent rise this year after strong turnout during the Thanksgiving and Black Friday weekend and thanks to strong online sales, the National Retail Federation said on Sunday after releasing an annual consumer poll... Read more

Clinton will unveil $275 billion infrastructure plan to create jobs... Read more

Warren Buffett to campaign for Hillary Clinton... Read more

Warming planet risks financial turmoil... Read more

Bill Gates has pulled together a multinational band of investors to put billions into clean energy. The Microsoft co-founder and philanthropist announced his latest endeavor, the Breakthrough Energy Coalition, at the climate change summit in Paris alongside President Obama and French President Francois Hollande... Read more

Private money is expected to fund part of a $20 billion rail tunnel project linking New Jersey with Manhattan, according to a senior executive at the national rail network Amtrak. Amtrak's plan to build a new two-track tunnel under the Hudson River and revamp its rail infrastructure in the region got a boost earlier this month when the federal government agreed to foot half of the bill... Read more

Target website down on Cyber Monday traffic... Read more

A BBC investigation has uncovered evidence of bribery at one of the UK's biggest companies. Panorama found British American Tobacco illegally paid politicians and civil servants in countries in East Africa.... Read more

ICBC Standard Bank pays out $32.5m for bribery failings. The bank has signed the first ever UK deferred prosecution agreement for confessing that it failed to stop bribery in a Tanzanian bond issuance... Read more

A lack of buyers could lead to a crisis in the corporate bond market, the head of Aberdeen Asset Management, Martin Gilbert has told the BBC. "There's a worry that there's no buyers of bonds and that on any given day everyone might want to sell," he said. The past few months have seen a number of market watchers express concern about the $10tn corporate bond market... Read more

Russia and Turkey will both lose from Moscow's sanctions... Read more

A weaker CNY midpoint fixing and a renewed selloff in Mainland Chinese markets have heightened fears that Friday’s selloff could merely be the beginning of a more significant correction for Chinese equities. Although the Chinese “National Team” looked keen to quell potential fears over a currency devaluation today, it did not seem to encourage the Chinese equity markets... Read more

China's yuan has just won promotion to the premier league of global currencies. The International Monetary Fund on Monday approved the yuan for inclusion in its elite basket of reserve currencies in what amounts to a major vote of confidence in Beijing's economic reforms.... Read more

China's summer market meltdown has claimed another victim -- Japanese pensioners. Japan's government pension fund -- the world's largest -- lost $64 billion in the three months to September 30, and much of that was due to crashing share prices in China... Read more

VTech data hack: Private details of 5m parents stolen from popular electronic toy maker... Read more

BlackBerry said it will be booted from Pakistan after refusing to comply with the government's demands to access customers' private messages. Pakistan has set a December 30 deadline and cited "security concerns," the company said in a blog post Monday.... Read more

India's economic growth picks up to 7.4%... Read more

India poised to become fastest growing large economy India's economy expands by 7.4pc in the third quarter, putting it on course to overtake China as the fastest growing large nation in the world... Read more

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