ASB Securities Morning Brief for Friday, 29 May 2015
Friday, 29 May 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose as Spark New Zealand rebounded from a year-low. Ryman Healthcare extended its post-earnings advance. The NZX 50 Index rose 19.699 points, or 0.3 %, to 5777.637. Within the index 21 stocks rose, 22 fell and eight were unchanged. Turnover was $123.4 million... Read more

The New Zealand dollar was little changed against the greenback after Fonterra Cooperative Group's forecast 2016 payout largely met expectations, and gained against the Australian dollar after Australian capital expenditure disappointed investors. The kiwi traded at 72.37 US cents at 5pm in Wellington from 72.43 cents at 8am and 72.51 cents yesterday. It rose to 94.23 Australian cents from 93.53 cents yesterday.... Read more

NZIER predicts official cash rate to hold... Read more

Reserve Bank unlikely to cut OCR next month, line-ball on cut this year, Westpac says... Read more

Apartment buildings not yet covered by Auckland Council's fast-track consenting... Read more

Further details about the Auckland Crown land to be released for development are set to be announced - to developers - this Friday. In recent days, there have been increasingly wild claims about exactly what Crown Land will be released... Read more

Auckland property crisis: Extra 2800 homes to be built on surplus land. More than 2800 houses will be built on surplus land Auckland Council is selling to developers. The scheme aims to ease the city's severe housing shortage and deliver more-affordable properties for struggling home buyers, while also raising extra revenue for ratepayers... Read more

Fonterra rejects criticism of milk price guidance, while forecasting cautious $5.25/kgMS for new season... Read more

Milk price payout drop to plunge NZ into '$13b economic black hole'. Fonterra has forecast a $5.25-per-kg payout for milk solids in the 2015/16 season, and dropped the current season price by 10 cents. The next-season forecast is less than analyst predictions of about $5.50 per kg, and will be below the break-even point for many farmers... Read more

Dairy farmers face two successive years of below-break-even payouts after Fonterra issued its forecast for 2015/16 yesterday, raising questions about whether the sector may have reached the end of what has been a highly successful era... Read more

The Issues Paper for the Review of the Financial Advisers Act 2008 and the Financial Service Providers (Registration and Dispute Resolution) Act 2008 is now out.... Read more

Next season's average farmer income will drop by $150,000 based on Fonterra's $5.25 per kg forecast, says DairyNZ. Farmer-funded DairyNZ said it had calculated the break-even milk price for the average farmer at $5.70 kg... Read more

KiwiSaver loses its buffer. KiwiSaver providers could introduce minimum amounts for opening new accounts or minimum saving requirements in the wake of the Government's snap decision to cut the $1000 kick-start... Read more

Qualification questions may cause concerns. A crackdown on adviser qualification requirements could prompt some to leave the industry, it has been claimed.... Read more

Arvida Group, the retirement village operator which listed on the NZX last December, reported annual earnings in line with the prospectus forecast, and affirmed its outlook for the 2016 financial year... Read more

Oil company Chevron New Zealand, operator of Caltex service stations, is selling its holding in the Marsden Point refinery. Chevron’s 11.4% stake in New Zealand Refining is being sold by broker Deutsche Craigs through a bookbuild... Read more

Squirrel Mortgages is going through the final stages of getting its P2P lending licence from the Financial Markets Authority. The company’s principal John Bolton said that, all going well with the FMA, they are pretty close to getting there and, once they do, they have everything ready to go... Read more

MYOB to buy NZ's Ace Payroll for $14 million in latest acquisition... Read more

An extension to Wellington Airport's runway is a step closer after the capital's councillors voted to set aside $90-million towards its $350m cost. The money for the project has been included in the Wellington City Council's 10-year plan following a committee meeting on yesterday but deputy mayor Justin Lester says the extension will have to stack up... Read more

ERoad, the electronic road user charges and transport services company, posted a full year loss in its maiden annual report as a public company, while sales missed its prospectus forecast. The shares fell.... Read more

Argosy Property reported a 25 per cent drop in annual profit, while its rental income rose, as the listed property investor returned to a tax paying position for the first time in four years and paid more interest. Profit fell to $64.4 million in the year ended March 31, from $85.6 million a year earlier, the Auckland-based company said... Read more

John Bongard will resign as a director of Meridian Energy, the government controlled energy generator and retailer, after four years on the board. Meridian shares fell 1.1 percent to $2.28. ... Read more

Massive changes proposed at Fairfax. Reporters and editorial staff at Fairfax Media have been informed today of a massive suite of changes to the media company, including the disestablishment of some roles... Read more

Union goes into bat for Fairfax staff as nearly 200 jobs set to go... Read more

Prime Minister John Key has warned property speculators that the beefed-up Inland Revenue Department will catch tax-dodgers, and it won't be "a pretty experience". Speaking at a KPMG business audience in Auckland on Thursday, Key admitted tax experts often had the upper hand on officials... Read more

ANZ has been singled out by the Commerce Commission for its misleading behaviour over interest rate swaps but the regulator will not seek similar High Court declarations that Westpac and ASB breached the Fair Trading Act... Read more

High Court grants FMA application to appoint receivers to Christchurch FX trader. The High Court in Christchurch has granted an application from the Financial Markets Authority to appoint receivers to Christchurch company Arena Capital, trading as foreign exchange services provider BlackfortFX... Read more

A whip-around of holders of South Canterbury Finance preference shares has raised more than $150,000, which will fund an investigation into whether or not legal action can be taken to try to get compensation. The $155,000 raised is more than organisers had initially expected from the out-of-pocket holders of the preference shares, who got nothing of South Canterbury Finance's $1.7 billion taxpayer bailout... Read more

Auckland ratepayers are coughing up $23.8 million in the region's biggest leaky building case. The 150 owners of the Nautilus Building in Orewa can now begin fixing their apartments after the Auckland Council yesterday agreed to pay most of a $25.07 million award against the council and other parties... Read more

New Zealand Herald Editorial: Smaller centre probably a better bargain... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket has closed slightly weaker after volatile trading triggered by the release of official data which showed business investment falling to its lowest point in years. At the 4.15pm (AEST) official market close, the benchmark S&P/ASX200 index was down 12.2 points, or 0.21 per cent, at 5713.1, while the broader All Ordinaries index fell 9.6 points, or 0.17 per cent, to 5714.6.... Read more

The Australian dollar fell to a one-month low after disappointing business investment figures put expectation of another interest rate cut on the table. The local currency was worth US76.93c at noon (AEST) today, down from US77.61c yesterday... Read more

Brits can get two Australian dollars for a pound for the first time in almost six years after the Australian dollar continued its descent overnight. At 3.30am (AEST), the local unit was trading at 49.94 pence, having earlier hit a low of 49.85 pence, its weakest mark since August 2009... Read more

Capex: Business investment plans at 'recessionary' levels... Read more

High-rise 'time bomb' warning prompts building safety audit in Melbourne CBD. High-rise buildings around Melbourne's CBD will be inspected by authorities after warnings the use of cheap building materials had turned some apartments into time bombs... Read more

A Chinese government think tank warns iron ore prices are likely to stay near their current lows for another two years and weak steel demand will keep them under pressure for a decade... Read more

The revised Renewable Energy Target (RET) currently before Parliament would provide a market for otherwise unsaleable timber, according to a document from Victoria's state-owned forestry business, VicForests, obtained by the ABC. Environment Minister Greg Hunt introduced the Renewable Energy (Electricity) Amendment Bill yesterday... Read more

Gina Rinehart loses legal feud with kids. Gina Rinehart used tactics bordering on intimidation and sought to wield her influential connections in the battle against her two eldest children over the multibillion-dollar family trust... Read more

More twists to come in the Gina Rinehart saga. Gina Rinehart might have won the title of Australia's richest person and most powerful woman for 2015 but she lost a significant battle in the courts. The decision by the NSW Supreme Court to appoint Rinehart's estranged daughter, Bianca Rinehart, to run the family trust is a massive blow on many levels... Read more

Taruga Gold receives Speculative Buy from RM Research... Read more

Oil and gas producer Sundance Energy has lifted its full year production targets despite scaling back exploration amid weaker oil prices. Sundance shares were steady at 59 cents at 1150 AEST.... Read more

Independence Group managing director Peter Bradford says shareholder reaction to the company’s $1.8 billion offer for Sirius Resources has been positive, despite the company’s share price slide since the friendly tie-up was announced earlier this week... Read more

Alexium International Group has received a Buy rating from Foster Stockbroking, which has maintained its Price Target of $1.10. Shares in Alexium last traded at $0.48. The following is an extract from the report... Read more

St George Mining sets sail for raising. St George Mining is gearing up for a closely-watched drilling program for massive nickel sulphides at its under-explored East Laverton project in Western Australia... Read more

Shares in Empired were higher after the IT services company won a $20 million Rio Tinto contract. Under the terms of the contract, Empired will provide application managed services and project services over a three-year period with two one-year extension options. Empired shares were up half a cent to 83.5 cents at 9.45am after hitting an earlier peak of 87 cents.... Read more

Fortescue chairman Andrew "Twiggy" Forrest has declared he has no plans to sell part of his iron ore mining company to Chinese investors. Mr Forrest says while Fortescue has held talks with potential investors, he doesn't want to reduce his 33 per cent stake despite the mining company being under pressure from plunging iron ore prices... Read more

Testing and analytical laboratory services provider ALS has cut its dividend by almost half after swinging to a full-year loss on the back of its exposure to the weakening oil market. In the 12 months to March 31, ALS posted a net loss of $174.5 million, a significant deterioration on the net profit of $154.4m posted in the previous year... Read more

IM Medical's shares in pre-open... Read more

Shares in aerial imaging and mapping company Spookfish rose after it signed an evaluation agreement with an unnamed Australian military contractor... Read more

Adairs IPO priced at $2.40... Read more

Entertainment group and theme park operator Ardent Leisure saw strong growth at its Main Event business over the last nine months, but the gains were offset by its troubled health and fitness division. Ardent shares were slightly weaker after the announcement, falling 0.23 per cent to $2.145 at the 10.15am (AEST) official market open, against a benchmark index rise of 0.08 per cent... Read more

Former boss of Ten Network Grant Blackley and his new chairman at Southern Cross Austereo, Peter Bush, have teamed up to restore the fortunes of the troubled national radio network and regional TV operator and fatten it up for market... Read more

Supermarket giant Woolworths has signed a deal with Telstra to become a wholesale provider of the telco's 3G mobile network. Woolworths will use Telstra's 850MHz and 2100MHz spectrum, the telco said today... Read more

One of Australia's leading stockbrokers has distanced himself from the way the Australian Securities Exchange has treated investors caught up in the collapse of broking firm BBY. Ord Minnett executive chairman Karl Morris, who also chairs the Stockbrokers Association of Australia, told The Business what had taken place was "very unique"... Read more

BBY administrators' stalemate with internet provider Indicium... Read more

BRW Rich List 2015: Property hot, mining not... Read more

Opinion - Alan Kohler: Forget banks, data is where the money is now. The 500-year reign of the bankers has come to an end. Who has replaced them? Multinational corporations, especially those that possess data, writes Alan Kohler... Read more

Opinion/Analysis - James Laurencheson & Hannah Bretherton: What Australians really think about a rising China. What does China’s rise as a major power mean for Australia? The answer depends on who you ask... Read more

International Headlines

U.S. Market Report: U.S. stocks were trading lower early on Thursday as investors grappled with comments from Federal Reserve officials about the possibility of raising interest rates this year. The S&P 500 SPX, -0.12% slipped 9 points, or 0.4%, lower at 2114. The Dow Jones Industrial Average DJIA, dropped 85 points, or 0.4%, to 18,076. The Nasdaq Composite Index COMP, was down 22 points, or 0.4%, at 5082, retreating from the record level reached on Wednesday... Read more

North/South Americas Market Report: North and South American markets are lower today with shares in Brazil off the most. The Bovespa is down 0.97% while U.S.'s S&P 500 is off 0.14% and Mexico's IPC is lower by 0.02%... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The FTSE 100 gained 0.11%, while the CAC 40 led the DAX lower. They fell 0.86% and 0.79% respectively... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 0.39%, while the Shanghai Composite led the Hang Seng lower. They fell 6.50% and 2.19% respectively... Read more

Oil prices rose in Asia Thursday on expectations that the latest US stockpiles report will show a further dip in crude reserves as traders worry about a global oversupply, analysts said. US benchmark West Texas Intermediate for July delivery rose 12 cents to $57.63 while Brent crude for July gained 39 cents to $62.45 in afternoon trade.... Read more

Market volatility no cause for panic: G7. Recent volatility on markets, and in particular on bond markets, comes as no surprise to top financial officials from the Group of Seven nations and it is no concern to them, according to a member of the German delegation... Read more

Mortgage rates in the U.S. rose to a 2015 high this week as bond investors reacted to reports showing the housing market is heating up. The average rate for a 30-year fixed mortgage was 3.87 percent, up from 3.84 percent last week and matching the level at the end of 2014, Freddie Mac said in a statement Thursday... Read more

Ex-Lehman CEO Fuld says ‘perfect storm’ caused crisis... Read more

Syngenta AG, the agrochemical maker that rejected an unsolicited $45 billion takeover offer from Monsanto Co., is building up defenses as it prepares for a possible higher bid from its U.S. rival, according to people with knowledge of the situation... Read more

Wall Street banks are being drawn into the FIFA bribery probe. Major global banks — including Wall Street giants Citigroup and J.P. Morgan — could be drawn into the sweeping probe into alleged racketeering, wire fraud and corruption in the soccer world, as investigators trawl through evidence tied to the FIFA bribery scandal... Read more

Nike becomes suspected player in alleged $150 million FIFA bribery scandal. The international investigation into bribery, fraud and corruption at FIFA involved some surprising American names: The Miami chairman of a popular nationwide soccer league, and a major U.S. sportswear firm some believe could be Nike... Read more

Apple fails to disqualify antitrust monitor in e-books case... Read more

What Google Just Announced Is a Bombshell. Now on Tap could change everything about your phone... Read more

Yahoo will face a US class action lawsuit for allegedly accessing the content of emails sent to its mail users from non-Yahoo Mail accounts. A Californian judge ruled that people who sent emails to or received emails from Yahoo Mail users from 2 October 2011 can sue the company as a group, granting it class action status. There is estimated to be over one million members in the privacy lawsuit.... Read more

Grexit is a possibility, warns head of IMF. Christine Lagarde says deal with Athens is unlikely in next few days, after Greece’s lead negotiator claimed high-level intervention was needed in talks... Read more

UK growth hit by trade deficit and services slowdown... Read more

Chip manufacturer Avago buys rival Broadcom for $37bn. Avago Technologies, one of the world's biggest manufacturers of semiconductors, is buying its California-based rival Broadcom for $37bn (£24bn). Between them, the two firms employ more than 20,000 staff worldwide with combined annual sales of £15bn (£10bn)... Read more

Booming buy-to-let puts £112bn in pockets of British landlords. Rental income is worth almost £4bn a month nationwide as the sector’s popularity for investment continues to increase, locking out first-time buyers... Read more

Venezuela and Russia's Rosneft agree '$14bn oil deal'... Read more

Russian-Japanese forum offers new ideas for investment.... Read more

Dubai International Said to Be in Talks to Sell Almatis to Oyak... Read more

Foxconn’s Future Ambitions. Foxconn, Apple’s major assembler, made a rare showcase of some of its new technologies and products at an expo in southwest China this week. The company, officially known as Hon Hai Precision Industry Co., has been diversifying its operations beyond manufacturing consumer electronic gadgets like iPhones and Playstations as competition for Apple’s orders intensifies and wages in China, where it manufactures most of the products, continue to rise... Read more

China's factories struggled to expand in May despite recent interest rate cuts and other policy stimulus, a Reuters poll showed, suggesting the government may have to do more to halt a protracted slowdown in the economy. The official manufacturing Purchasing Managers' Index, or PMI, is forecast to inch up to 50.2 from April's 50.1, according to the median forecast of 14 economists in the poll... Read more

Despite India’s brainy army of computer engineers,–one of the country’s largest e-commerce companies and a $2 billion startup–says it’s not finding the coders it needs most. The company, which is backed by U.S.-based eBay Inc. and Japan’s SoftBank Corp.9984.TO -0.54%, is scouring the globe for programmers with a decade or more experience dealing with big data, cloud computing and the software used to interact with customers and suppliers... Read more

Analysis - Heather Stewart: GDP figures: ONS's latest data suggests economic growth is slowing. City experts’ belief that GDP figures would be revised up has proved unfounded, raising fears the recovery is stalling... Read more

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