ASB Securities Morning Brief for Saturday, 25 April 2015
Saturday, 25 April 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose, paced by Spark New Zealand and Meridian Energy, as investors sought dividend paying stocks. Xero dropped after it reported its full year loss nearly doubled. The NZX 50 Index rose 7.447 points, or 0.1 percent, to 5765.356. Within the index, 22 stocks rose, 20 fell and nine were unchanged. Turnover was $133 million... Read more

The New Zealand dollar is heading for a 1.7 percent decline this week after Reserve Bank assistant governor John McDermott ruled out interest rate hikes ahead of the central bank's official cash rate review next week. The kiwi fell to 75.63 US cents at 5pm in Wellington, from 76.94 cents at 8am on Monday. At the start of the week, five currency advisers in a BusinessDesk survey said the kiwi could fall, five said it could gain and three said it would likely remain largely unchanged... Read more

RBNZ rate cut unlikely – for now. With the Reserve Bank’s next Official Cash Rate (OCR) announcement due on Thursday, a survey of economists reveals many believe a downward bias is creeping into the RBNZ’s thinking... Read more

Record auctions pushing up cost of houses. Some potential buyers taking big financial risks by skipping due diligence reports to save money... Read more

FMA warns on bank notes. Consumers are being warned to make sure they know what they’re doing if they invest in bank capital notes.... Read more

Advisers under the magnifying glass. Data collected from last year’s first round of information returns by authorised financial advisers shows how diverse the industry is and will help target monitoring activity, the FMA says.... Read more

New Zealand lamb wool prices rose to a six-week high at auction yesterday on increased demand from China for the apparel fibre. Lamb wool rose 4.8 percent to $6.60 per kilogram at yesterday's South Island auction compared with last week's North Island auction, its highest level since it touched a four-year high of $6.65/kg on March 12, according to AgriHQ... Read more

Are better dairy prices on the way? A growing number of analysts think dairy prices will start to trend higher after low prices burn off some export competitors and China stocks sink... Read more

Horticultural production tops $7 billion, driven by wine and apples... Read more

The Hunter Downs irrigation scheme is "not going to go away in a hurry", Waimate's Federated Farmers chairman says. On Thursday Hunter Downs Irrigation Limited (HDIL) chairman Andrew Fraser said if there was not more support shown for the irrigation scheme in the next week "as evidenced by payments" the scheme may not be able to be built... Read more

Hobby beekeeping takes off. New Zealand is abuzz with enthusiasm over the humble bee, as hundreds of people a year sign up to hobby beekeeping. ... Read more

Kiwibank pays its first dividend of $21 million to Government... Read more

Xero shares savaged after $69.5m loss. Shares drop 9.35 per cent but chief executive says company still considering US listing at ‘optimal time’... Read more

Pan Pacific independent directors reject Zeta offer as under-valuing company... Read more

Tauranga Energy Consumer Trust (TECT) has reduced its shareholding in Trustpower from 33.2 per cent to 26.8 per cent, generating gross proceeds of $155 million. The sell-down frees up about 20 per cent of TECT's stake in Trustpower - previously its only shareholding - and will be used to diversify its investment base, says TECT chairman Bill Holland... Read more

Loyal Genesis Energy investors receive bonus shares. Kiwis who bought into the Genesis Energy selldown have received their bonus "loyalty" shares, padding out an already handsome return on investment. The Government floated 49 per cent of Genesis on the stock exchange in April last year, following sell-downs of its stakes in Meridian Energy, Mighty River Power and Air New Zealand... Read more

Spark New Zealand, formerly Telecom Corp, has slipped from being the country’s largest listed company, as investors mull its transformation away from telecommunications and the risk of increased competition. Shares of Spark rose 1.1 percent to $2.83. The stock is rated an average of 'hold' based on the consensus of 10 analysts surveyed by Reuters, with a target price of $2.94. ... Read more

Auckland's Devon Funds Management has had a bumper year in the New Zealand and Australasian equities space, with two of its funds posting nearly 30 per cent returns.... Read more

LanzaTech, the New Zealand founded carbon recycling company, says it has other full scale commercial plants in the pipeline following this week’s announcement that China Steel Corp will invest US$46 million in a commercial scale ethanol facility in Taiwan... Read more

Abano forecasts FY loss of $1.3M-$1.9M on sale of Aotea stake, Orthotics. Abano shares last traded at $7.75 and have gained 19 percent in the past 12 months, while the NZX 50 Index has risen 12 percent... Read more

Small airlines fly in as Air NZ pulls out. Second-tier carriers back themselves to make money on regional routes dropped by the national carrier... Read more

Auckland Transport has short-listed three companies that will be invited to tender to operate passenger rail services from 1 July 2016. They are Serco NZ, Transdev Auckland and KiwiRail.... Read more

Wellington joins Auckland in call for motorway tolls... Read more

Opus wins award for innovative environmental management on Auckland Harbour Bridge... Read more

Fonterra Cooperative Group, the world's largest dairy exporter, has changed two senior management roles in a bid to push its value-add strategy harder in the wake of shareholder criticism over its weak half-year financial results and lower forecast dairy payout... Read more

Mercer's CEO Shepherd, CFO Blathwayt quit the manufacturer... Read more

Xero CFO Jeffries leaves after 2 months in the role... Read more

The Commerce Commission has ruled against a merger that would have seen New Zealand's most popular brands of adult lubricant products merged under a single owner. The decision will slightly complicate the planned global deal in which Reckitt Benckiser Group, owners of Durex, are to purchase Johnson & Johnson’s K-Y brand and product assets... Read more

Commerce Commission prosecutes Twenty Fifty Club. Twenty Fifty Club Ltd and its sole director Gavin John Marsich have today appeared in the Manukau District Court facing 17 charges in relation to its pay-day loans business. The Commission began investigating Twenty Fifty Club in December 2013 after receiving a complaint from the public... Read more

Opinion - Fran O'Sullivan: TPP critical for our future trade ... it's a pity the idea hasn't been sold to the public... Read more

Opinion - Brian Gaynor: Big effort needed for MediaWorks bonuses. As viewing habits change, free-to-air TV looks likely to go the way of fax machines... Read more

Australian Headlines

Australian Market Report: The Australian share market has closed higher, with major miners surging and gains seen across all sectors. At the close on Friday, the benchmark S&P/ASX200 index was 88.5 points, or 1.51 per cent, higher at 5,933.3, while the broader All Ordinaries index was up 86.5 points, or 1.49 per cent, at 5,906.8, according to preliminary figures... Read more

The Australian dollar has risen above US78c as weak US data dents the greenback and the New Zealand currency slips. The domestic currency was worth US78.10c by 5pm (AEST), up from US77.28c yesterday, reaching a four-day high late in the local session... Read more

The federal budget bottom line is running a little better than expectations, according to figures released by the Finance Department... Read more

Iron ore rally could tip the RBA scales – HSBC... Read more

A new report outlines how Australian workers' living standards are falling, with real wages going backwards in 2013 for the first time in over a decade. The report by progressive think tank Per Capita finds that the average worker saw a $118 fall in the purchasing power of their pay in 2013, as wages failed to keep pace with inflation... Read more

Crucial trade pact in 'grabbing distance'. An ambition to create the world's biggest trading pact is at a crucial point and the result will have significant impact on Australia. ... Read more

Calls for councils to direct infrastructure levies towards housing projects, keep low-income earners in inner suburbs... Read more

Elderly Australians are getting approved for home loans which could leave them paying off their mortgage until they are 113. Banks have admitted signing up customers in their 70s and 80s — one customer at 83 — for home loans despite some lenders toughening their age restrictions... Read more

Coal seam gas explorer Metgasco will seek compensation from the NSW government after winning its legal battle over the suspension of its drilling licence. The company said its successful challenge of the suspension proved a landmark decision for the NSW resources industry... Read more

A significant split occurred between Australia's iron ore giants this week when BHP Billiton said publicly that it was slowing down its expansion. It was only two sentences in a quarterly report, but was a major break from BHP and Rio Tinto's controversial narrative of unrelenting growth no matter the effect on prices - as long as you are making money... Read more

A proposed uranium mine in Western Australia's Pilbara region has been granted conditional Federal environmental approval. One of the world's largest uranium producers, Cameco Australia, wants to build the Kintyre open-cut uranium mine 270 kilometres north-east of the town of Newman... Read more

Shares in Mt Gibson Iron were firmer on a better than expected quarterly report from the iron ore miner and better sentiment towards the industry as a whole. Mt Gibson shares were up 2.2 cents, or 11.28 per cent, to 21.7 cents at 9am.... Read more

Mount Gibson Iron has slashed 20 per cent of its staff in the past quarter as it focuses on cutting costs and preserving cash to combat weak iron ore prices. At 1515 AEST, Mt Gibson's shares were up by 1.5 cents, or 7.69 per cent, at 21 cents.... Read more

Lakes Oil has issued and allotted 411,719 notes that raised $4.12 million for the company.... Read more

Production has declined at Australian uranium player Paladin's biggest mine after a well failed, but the company is upbeat about the prospects of exports to Japan and India... Read more

Bannerman Resources directors have increased their respective investments in the company through participation in its recent Share Purchase Plan priced at $0.052 per share. Proceeds from its $2 million capital raising, which included the SPP, will be used to operate the Heap Leach Demonstration Plant at its 80% owned Etango Uranium Project in Namibia... Read more

Amcom moves to shore-up merger. Amcom has released a short video in a direct pitch to undecided shareholders to vote in favour of its proposed takeover by Vocus Communications. In the two-minute video, Amcom chairman Tony Grist implores shareholders to back the scheme of arrangement at the coming shareholders meeting next month... Read more

Resmed shares fall heavily.... Read more

Manufacturer of sleep-treatment devices, ResMed, has posted a slight dip in gross quarterly profit, as its margin is squeezed by unfavourable exchange rate movements and lower selling prices for its products. ResMed today said its revenues for the quarter ending March 31 rose to $US422.5 million, an increase of 6 per cent compared with the same time last year, and a 13 per cent rise on a constant currency basis... Read more

AWS reveals US$5b annual revenue for first time... Read more

The retail magnate behind the Sussan and Sportsgirl brands chalked up a cool $30 million dividend last year, financial accounts reveal. Naomi Milgrom received the dividend from the main company in her fashion empire, ARJ Group Holdings, after it posted a net profit of $30.5 million for the year to last July... Read more

Australian childcare operators currently benefitting from $7 billion in subsidies each year expect the Government's promised shake-up of the rebate system to be announced early next week. Social Affairs Minister Scott Morrison has signalled the biggest change will be the introduction of a means-tested payment to replace the complex mix of subsidies currently available to parents... Read more

Clean TeQ Holdings secures $1.9M in air pollution control contracts... Read more

NBN Co will on Monday introduce a new name for the company, ditching the 'co' in favour of a streamlined "NBN" brand it hopes will spur sales of products on the national broadband network... Read more

Virgin Australia named most attractive employers at Randstad Awards... Read more

Health workers awarded above-inflation wage increase, despite Government policy. Western Australia's Industrial Relations Commission has awarded above-inflation salary increases to public hospital and health services workers, despite a requirement to take into account the Barnett Government's public sector wages policy... Read more

Discount coupon website Spreets fined $600,000 for misleading customers... Read more

Opinion/Analysis - Tristian Edis: Why does AGL support the government closing down coal?... Read more

Opinion - Malcolm Maiden: LIBOR scandal will dog the banking sector for years. A global probe into the manipulation of London interbank borrowing rates by big northern hemisphere banks hit a new high, or low, on Friday with Deutsche Bank's agreement to pay a record $US2.5 billion to settle US and UK probes into its role in the scandal... Read more

Opinion - Michael Janda: Australia assumes it has a housing shortage, but what if that is wrong?... Read more

International Headlines

U.S. Market Report: Nasdaq, S&P 500 end at record highs... Read more

North/South Americas Market Report: North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 1.82% while Mexico's IPC is up 0.63% and U.S.'s S&P 500 is up 0.23%... Read more

European Market Report: European markets finished higher today with shares in Germany leading the region. The DAX is up 0.74% while France's CAC 40 is up 0.44% and London's FTSE 100 is up 0.24%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Hang Seng gained 0.89%, while the Nikkei 225 led the Shanghai Composite lower. They fell 0.83% and 0.47% respectively... Read more

Oil prices slipped on profit-taking in Asia Friday, unwinding sharp gains in the previous session fuelled by concerns unrest in the Middle East could hurt supplies from the crude-rich region, analysts said. US benchmark West Texas Intermediate (WTI) fell 32 cents to $57.42 while Brent eased 28 cents to $64.57 in afternoon trade. On Thursday WTI gained $1.58 and Brent advanced $2.12... Read more

US President Barack Obama defended a proposed Pacific trade deal Friday against sharp pushback from his party's left, saying the agreement under negotiation would avoid the flaws liberals have rightly highlighted in earlier trade pacts... Read more

It Already Looks Like This Quarter Will Be an Economic Disappointment. Fed officials need to see economic momentum to raise rates... Read more

Xerox Corp cut its 2015 profit forecast, blaming a strong dollar, and reported quarterly revenue below Wall Street's expectations, hurt mainly by lower printer sales and higher costs... Read more

Here’s why Amazon shares just jumped 15%... Read more

These U.S. Companies Are Hurting From Venezuela's Hyperinflation. Every time Venezuela introduces a new, weaker currency exchange rate, some of the world's largest companies face the decision of whether or not to adopt it. If they eventually do switch to the less favorable rate, it can result in multimillion-dollar charges that drag down balance sheets and earnings statements... Read more

General Motors Co Chief Executive Officer Mary Barra, who last year became the first woman to lead a major U.S. automaker, received $16.2 million in 2014 compensation, up 78 percent from her predecessor's total the previous year... Read more

Mylan tries to fend off Teva with bigger bid for Perrigo... Read more

Technology giant Amazon has said its web services business generated sales of $1.57bn (£1.04bn) in the first quarter of the year and is profitable. Amazon Web Services is a cloud computing offering that makes money by charging businesses to host websites and other applications... Read more

Sorry stud, Abercrombie & Fitch wants you to put your shirt back on. The teen-focused clothing brand said Friday that it will no longer hire store employees based on their body type or physical attractiveness.... Read more

It's over. Comcast formally withdrew from its pending $45 billion merger with Time Warner Cable on Friday morning -- after the companies failed to convince regulators the deal would be good for consumers... Read more

Microsoft has reported a 12% fall in profits to $5bn (£3.3bn) in the first three months of 2015. The strengthening US dollar had a "significant impact" on results, the software firm said. It also took a a charge of $190m during the quarter to reorganise its business which includes the costs of merging Nokia's handset division... Read more

Elaine Wynn played hard, but lost. She no longer has a seat on the board at the casino empire she co-founded. On Friday, the billionaire failed to convince enough shareholders to support her vocal campaign to be reelected as a director at Wynn Resorts... Read more

Diet Pepsi Dumps Aspartame as Consumer Backlash Hurts Sales... Read more

Euro zone warns Greece no cash till full reform deal... Read more

Eurogroup head Jeroen Dijsselboem has warned that "big, big problems" need to be solved before any Greece debt deal can be agreed. He was talking after a strained meeting between eurozone finance ministers and Greek government officials in the Latvian capital of Riga... Read more

Tesco has turned to a marketing expert who helped to revitalise British Airways and Barclays to try to revive its ailing brand. The supermarket chain has named Michelle McEttrick as its new group brand director as chief executive Dave Lewis tries to turnaround Tesco after it reported an annual loss of £6.4bn... Read more

How a big Italian bank was slammed by a hoax. It's every company's nightmare: Friday afternoon and your stock starts tanking without explanation. Turns out you've fallen victim to an elaborate hoax claiming your chief executive has quit after admitting making up billions in profits. Sound far fetched? That's precisely what happened to one of Italy's biggest banks... Read more

HSBC has said it is considering moving its headquarters out of the UK. The bank said the review followed "regulatory and structural reforms" since the financial crisis. HSBC's board has asked its management to "look at where the best place is for HSBC to be headquartered in this new environment," the bank said... Read more

French Connection shares plunge nearly 20% on profits warning. Loss-making retailer warns it will miss City forecasts, citing ‘challenging conditions’ on the high street... Read more

France to 'talk again' with Renault but reaffirms vote plan. French Economy Minister Emmanuel Macron said on Friday he would "talk again" with Renault boss Carlos Ghosn but reaffirmed his intention to boost the government's voting rights in the carmaker in defiance of Ghosn's wishes... Read more

Vladivostok, the main city of the Russian region of Primorye, may obtain free port status this summer. In early April, Russian President Vladimir Putin urged officials to speed up the work on the free trade zone bill so that the law could be accepted in a few months. In an interview with Ogonyok magazine, the mayor of Vladivostok Igor Pushkarev reveals how it feels to wait for a miracle... Read more

Junk Bond Investors Better Start Thinking More About Russia. The preponderance of emerging market debt in global high-yield bonds is growing... Read more

China Looks to Stub Out Consumer-Safety Scandals. Beijing’s clampdown on the tobacco, baby-formula industries is aimed at restoring consumer confidence... Read more

China central bank guides yuan higher as economy slows... Read more

Xiaomi Corp.’s ardent Indian fans lined in the mid-day heat for more than two hours to get a get a glimpse of the Chinese company’s latest mobile phone on Thursday.... Read more

The Indian government has asked the country’s central bank to hold up funds from the New York-based Ford Foundation to Indian grantees until they can be reviewed by the Home Ministry. A spokesman for the Home Ministry said “security agencies” suspected the Ford Foundation, one of the biggest philanthropic organizations in the U.S., had made donations to “agencies not registered with the ministry.”... Read more

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