ASB Securities Morning Brief for Friday, 03 July 2015
Friday, 03 July 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose as a weak kiwi dollar boosted sentiment for exporters such as Fisher & Paykel Healthcare. Chorus and Spark NZ advanced after the Commerce Commission issued its ruling on wholesale telecommunications prices. The S&P/NZX 50 Index rose 47.11 points, or 0.8%, to 5841.46. Within the index, 28 stocks rose, eight fell and 14 were unchanged. Turnover was $160 million... Read more

The New Zealand dollar dropped below 67 US cents for the first time in almost five years after a plunging milk price stoked calls for the Reserve Bank to cut interest rates more aggressively than previously anticipated. The kiwi fell as low as 66.95 US cents, trading at 67.01 cents at 5pm in Wellington from 67.41 cents at 8am and 67.95 cents yesterday. The trade-weighted index dropped to 70.10 from 70.99 yesterday... Read more

OCR cut predictions have taken a big step up following the latest fall in dairy prices.... Read more

Following another drop in export dairy prices overnight ASB economists are now predicting the Reserve Bank will reverse all of last year's increases to the official cash rate. A deteriorating outlook for the terms of trade and national income was the principal reason the central bank cited for cutting the OCR by 25 basis points to 3.25 per cent last month and foreshadowing another cut beyond that... Read more

New Zealand commodity prices fell for a third consecutive month in June to a three year low, on weakness in aluminium, dairy, and meat. The ANZ Commodity Price Index for June declined by 3.1 percent, following a 4.7 percent fall in May and a 7.4 percent drop in April. The index is now about 20 percent lower than June last year... Read more

Leaked TPP paper shows US pushing drug company rights... Read more

TPP too big to fail, says visiting US trade deal specialist Petri. Too much political capital has been invested in the Trans-Pacific Partnership trade deal for it to fail at the final hurdle, says Peter Petri, a professor of international finance at Brandeis University and co-author of a study on the economic benefits of the TPP... Read more

ASB offers special one-year home loan fixed interest rate... Read more

“Auckland effect” starts spreading. Skyrocketing SuperCity prices are starting to spread outwards – thanks to Aucklanders buying away from home. Two new sets of data – from QV and Trade Me Property - provide evidence that Auckland’s supercharged housing market is starting to impact on nearby regions. The latest QV House Price Index shows that Tauranga, Hamilton and the Western Bay of Plenty are seeing rising house value... Read more

An increase in the number of property investors purchasing Hamilton homes is increasing the number of rental properties available in the city, according to Lodge City Rentals business development manager David Kneebone... Read more

Auckland values over 30% higher than previous peak... Read more

Auckland property 56pc less affordable - report... Read more

Christchurch's 'recovery' is now 'regeneration,' son of CERA set up. Christchurch’s recovery has now become regeneration, according to the government’s spin masters. A new Greater Christchurch Regeneration Bill will replace the Canterbury Earthquake Recovery Act 2011, which expires next April... Read more

Fletcher Building has grabbed the lion's share of Government-led residential developments in Christchurch city. It plans to develop nearly 1000 townhouses in central Christchurch in the "east frame" along Manchester Street has received a mixed response with some criticism of a $900,000 pricetag for some units... Read more

Rebecca Thomas's Mint Asset Management has won a mandate with the NZ Super Fund following AMP Capital's decision to outsource its management.... Read more

Dairy product prices continued their slide in the latest GlobalDairyTrade auction, weakening to the lowest level in six years. The GDT average winning prices dropped 5.9 per cent to $US2,276 ($NZ3,356) from $US2,409 at the previous auction two weeks ago. It is the lowest level since July 2009 and the eighth successive fall.... Read more

Finance Minister Bill English says the current review of tariffs in the China New Zealand free trade agreement was one of the things that could benefit the dairy sector. Mr English has just returned from a trip to China for a signing ceremony to establish the Asia Infrastructure Investment Bank, initiated by China... Read more

Weak dairy prices prompt pull back in expectations for payout to NZ dairy farmers this season... Read more

Massey Professor Ralph Sims challenged Federated Farmers National Conference today that New Zealand is not doing enough to mitigate and adapt to climate change. “In spite of what the Government says, there is no policy in place apart from the Emissions Trading Scheme (ETS), and I’ve no idea how we are going to meet our target of a five per cent reduction in greenhouse gas emissions before 2020... Read more

Fonterra talks to staff on streamlining business... Read more

Silver Fern Farm shareholders gain meeting support. Farmer shareholders have gained enough support to force Silver Ferns Farms to hold a special meeting. Led by Otago sheep and beef farmers Allan Richardson and John Cochrane, the group was seeking support for a special meeting of Silver Fern Farms to debate a merger with the Alliance Group, the other leading processing co-operative... Read more

SeaDragon to raise $5 million via discounted rights issue, placement to fund transition to Nelson factory... Read more

Briscoe boss Rod Duke's biggest buy. He's the great salesman, but can Briscoe Group's Rod Duke sell his bid to buy Kathmandu?... Read more

South Port says annual profit beats guidance on stronger cargo flows. South Port shares, of which the Southland Regional Council holds about 69 percent, were unchanged at $4.58, and have gained 16 percent this year... Read more

Growth Forecast Report To 2017: Radiant Insights. New Zealand Household Care Packaging Market Size, Share, Trends And Growth Forecast Report To 2017... Read more

The New Zealand Amalgamated Engineering, Printing and Manufacturing Union's members will vote on whether to merge with the Service and Food Workers Union Nga Ringa Tota to create the second biggest workers' advocate, with the outcome flagged for early August. The Wellington based union's national conference today endorsed the merger with 82 percent support, meaning the EPMU's more than 30,000 members will now decide on whether to pursue the merger... Read more

Chorus shares bounced around after the Commerce Commission's latest ruling on wholesale telecommunications prices was largely unchanged, though the regulator changed tack on whether any update will be backdated... Read more

New Zealanders are still paying too much for broadband internet compared to other developed countries, Internet New Zealand says, after the competition watchdog's latest ruling on the wholesale pricing for the copper wire network. While ultra fast fibre broadband might be the way of the future, most Kiwis still depend on the old copper wire phone network for their internet... Read more

Spark sticks to earnings guidance in wake of wholesale pricing remaining unchanged... Read more

Helen Clark wins Kea World Class New Zealand Award... Read more

Alex Swney's letter of remorse revealed. For the first time, Alex Swney's words of contrition can be read by the public - the people he ripped off for more than $4 million... Read more

MTF, Sportzone appeal to be heard by Supreme Court... Read more

Animal advocacy group SAFE is claiming 252 sheep destined for the controversial live export shipment to Mexico died before they even went on board. This, in addition to the 192 animals that perished on the ship, brings the number of deaths to 444... Read more

Opinion - Christopher Adams: Stock Takes: Kathmandu price push likely. Experts feel Briscoe bid too low to succeed... Read more

Opinion - Matthew Goodson: Huge risks in loan-financed housing bubble... Read more

Opinion - Carmel Fisher: Junior markets haven't borne out hype. As an investor I cut my teeth on small, under-researched listed companies where I hoped to have a competitive advantage. You know, find the hidden gem that nobody else knew about because they were too busy looking at large, established companies... Read more





Australian Headlines

Australian Market Report: Australian stocks have posted their third straight day of gains as worries about Greece's future in the eurozone fade. There were healthy gains across the board, with retail and energy stocks leading the way. The All Ordinaries index jumped by 1.5 per cent to close at 5,588 and the ASX-200 index gained the same margin to finish on 5,600.... Read more

The Australian dollar is lower after the release of weak local trade figures and positive US economic data. At 1700 AEST on Thursday, the currency was trading at 76.34 US cents, down from 77.16 cents on Wednesday. During the local session it fell as low as 76.26 US cents, its weakest level since Monday... Read more

Australia's trade balance has languished in the red for the 14th straight month as the end of the mining investment boom takes its toll on the nation's bottom line. The deficit in May was $2.75 billion, after blowing out to $4.14 billion in April, the largest on record, the Australian Bureau of Statistics said on Thursday... Read more

Trade deficit has economist asking 'is Australia still a developed economy?'... Read more

Australian growth tipped to fall to 2%... Read more

Australians could be borrowing an estimated $22 billion from each other rather than banks within five years, but experts say the rise of peer-to-peer lending shouldn't bother the country's major banks. Morningstar head of financials, David Ellis says the big four banks - the Commonwealth, ANZ, Westpac and National Australia Bank - will be able to withstand the rise of the nascent sector without much fuss... Read more

Remember petrol at a dollar a litre? It happened in some parts of Australia for a brief time in February, but since then the national average price has risen nearly 30 per cent. Australia's average petrol price fell from a high of almost $1.60 a litre last July, to $1.08 in February, and back to $1.40 last week.... Read more

Rio Tinto boss Sam Walsh is looking to fill the company's senior ranks with more women, but says female employees need to be more confident. With 82 per cent of the mining giant's workforce made up of men, Mr Walsh has acknowledged that the gender gap needs to be closed, especially within Rio's senior management ranks... Read more

Legend Mining to reveal material acquisition... Read more

Stratum Metals has acquisition on the cards... Read more

Samantha Tough will resign from the board of Strike Resources after the completion of a takeover offer by Bentley Capital to focus on her other non-executive director roles. Strike shares were up 0.2 cents, or 4.17 per cent, to five cents at 10.10am.... Read more

Atlas Iron has re-opened its Mount Webber mine, meaning all three of its Pilbara mines are running again less than three months after shutting them. Atlas suspended all mining and trading in its shares in April, when it was losing money and the iron ore price plunged to decade lows below $US50 a tonne.... Read more

Modun Resources is raising $11 million through a fully underwritten capital raising as part of its acquisition of LiveTiles Holdings Pty Ltd. The offer of 73,333,333 shares priced at $0.15 each is underwritten by Blue Ocean Equities.... Read more

ASX picks NASDAQ tech for new risk platform... Read more

INT Corporation is raising up to $19.9 million through a fully underwritten issue of shares to fulfil one of the conditions required for the merger with AHAlife... Read more

Murray Goulburn supplier and shareholder Ross Powell has cautioned other farmers not to let the partial float of Australia's biggest dairy processor "distract" them from what they do best. And Murray Goulburn's managing director, Gary Helou, who engineered the $500 million capital raising, has also listened to the message... Read more

A surprise earnings upgrade from underwear and bedding maker Pacific Brands could be the first sign its six years of turmoil are finally in the past. Shares in the owner of the Bonds and Sheridan brands soared 51 per cent after it improved its earnings expectations due to strong sales in May and June and tight cost controls... Read more

Wesfarmers has admitted it is facing unprecedented challenges at its Curragh mine in central Queensland and announced a third go at trimming its staff as it announced another round of job cuts. The mine will lose between 30 and 50 workers in the latest round of cuts but the sector remains oversupplied with more production coming on stream to replace cuts... Read more

Loss-making hardware chain Masters has weighed heavily on Woolworths' earnings but there are hopes that it's yet to realise its full potential. UBS analyst Ben Gilbert says there's room for Masters in Australia's $45 billion home improvement market despite tough competition from entrenched player Bunnings... Read more

Coles has agreed to divest a supermarket development site at Singleton to open a new store at Lakelands south of Perth. The grocery giant agreed to the undertaking to ensure the competition regulator did not stand in the way of its proposed Lakelands store... Read more

News Corp Australia yesterday announced a restructure at its executive level, with Damian Eales appointed managing director of metro and regional publishing. The restructure follows the resignation two weeks ago of executive group director Jerry Harris after a 34-year tenure... Read more

Baby Bunting on growth spurt ahead of potential IPO.... Read more

Medibio Limited is increasing protection of its intellectual property with the lodgement of a provisional patent application with the U.S. Patent Office. The application covers an objective test to measure the level of stress and its impact on health and wellbeing... Read more

Sandalwood plantation operator TFS Corporation has re-affirmed its expectation of a net profit of at least $90 million for the 2014/15 financial year. TFS said on Thursday that it would meet its earnings guidance after selling more than 1,500 hectares of new Indian sandalwood plantations during 2014/15. TFS shares were 1.5 cents lower at $1.57 at 1023 AEST.... Read more

Virgin Australia buys analytics firm for frequent flyer business... Read more

The Senate has added IOOF chairman Roger Sexton and company secretary Danielle Corcoran to the list of company representatives it wishes to examine next week in Sydney at a hearing into misconduct within the financial services industry... Read more

Former Sigma Pharmaceuticals executives Elmo De Alwis and Mark Smith have pleaded guilty to falsifying the company's accounts to inflate profits. The Australian Securities and Investments Commission (ASIC) said the guilty pleas from the former chief executive Mr De Alwis and former chief financial officer Mr Smith relate to four financial transactions conducted by the company between June 2009 and March 2010... Read more

The corporate regulator says companies have made profit adjustments totaling more than $630 million after the watchdog made enquiries seeking explanations of accounting treatments. The Australian Securities and Investments Commission from July 1 last year begun publicly announcing when companies change their accounts after receiving contact from the regulator, in a bid to make directors and auditors more aware of the watchdog's concerns "so they can avoid similar issues"... Read more

Opinion - Alan Kohler: The internet might have killed monetary policy. Something else happened in 2007/08 apart from the credit crisis and the collapse of Lehman Brothers, and it might just have a longer effect on the economy and the effectiveness of monetary policy, writes Alan Kohler... Read more





International Headlines

North/South Americas Market Report: North and South American markets are mixed today. The IPC is up 0.85% while the Bovespa gains 0.10%. The S&P 500 is off 0.23%... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The FTSE 100 gained 0.33%, while the CAC 40 led the DAX lower. They fell 0.98% and 0.73% respectively... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 0.95% and the Hang Seng rose 0.12%. The Shanghai Composite lost 3.48%... Read more

Oil prices recovered Thursday after the Iran nuclear talks were extended until July 7, giving oversupplied markets a breather despite uncertainty over the Greek financial crisis, analysts said. US benchmark West Texas Intermediate (WTI) for August delivery was up 10 cents at $57.06 in late morning Asian trade while Brent was 23 cents higher at $62.24.... Read more

Gold settles at a more than 3-month low, down 0.8% on week... Read more

US employment rose by 223,000 in June, while the April and May figures were revised down, official figures show. May's figure was revised from a rise of 280,000 jobs to a rise of 254,000, according to the US Labor Department... Read more

30-year mortgage rate rises to 4.08%, highest since October... Read more

Economist: The Pace of Fed Rate Hikes May Be Faster Than You Think. Risks are rising that the Fed will have to raise rates faster than many expect... Read more

Tesla Motors deliveries surge in Q2... Read more

Facebook is to start paying some video creators for uploading their clips to the platform. The company is launching a Suggested Videos feed that curates a sequence of clips, interspersed with adverts... Read more

BP to Pay $18.7 Billion for Deepwater Horizon Oil Spill. The federal government and the Gulf Coast states have reached a tentative deal with the British oil company BP for it to pay about $18.7 billion, the largest environmental settlement in American history, to compensate for damages from the 2010 Deepwater Horizon oil spill, federal, state and company officials said Thursday... Read more

Intel Corp. announced on Thursday that the company's President Renee James will step down at the end of this year after 28 years with the company to pursue an external chief executive role... Read more

The Puerto Rico Electric Power Authority paid all principal and interest due to bondholders on Wednesday, buying the troubled utility time as it works to reach a deal with creditors. The authority, also known as Prepa, said in a statement that it is funding the $415 million payment with about $153 million from its general fund and the rest from its debt-service reserves... Read more

Greece contagion risk low, says BoE's Sir Jon Cunliffe... Read more

Alexis Tsipras’s Referendum Leaves Greek Voters Perplexed. Imagine the fate of your country hangs on a yes-or-no question. The question is drafted in cryptic, bureaucratic language and asks you to decide on an economic program that no longer exists. Leaders in neighboring countries are begging you to vote yes. Your government is begging you to vote no... Read more

Greece needs at least another 36 billion euros ($40 billion) over the next three years from euro-area states and easier terms on existing debt to keep the nation’s finances sustainable, according to an International Monetary Fund analysis... Read more

BBC to cut more than 1000 jobs... Read more

The former Irish Prime Minister Brian Cowen has apologised for "hardship and distress" caused by the Irish financial crisis, which began during his tenure. He told the Irish Banking Inquiry his government's austerity policies were a "necessary" response and that they had tried to "mitigate the human cost". The parliamentary inquiry is examining the causes of the 2008 crisis... Read more

Spain is trying to avoid being Europe’s next debt bomb... Read more

Spanish technology firm Amadeus has agreed to buy Accenture subsidiary Navitaire, bringing together two travel IT giants in an $830m (£532m) deal. Amadeus specialises in providing technology for the travel industry. Navitaire works with more than 50 airlines - focusing on low-cost carriers - on IT support for areas such as reservations and loyalty programmes... Read more

Chinese companies face challenging business environment in Russia... Read more

These 10 Economies Will Be the World's Worst Performers Growth in Ukraine, Russia will suffer the most... Read more

China’s securities regulator has relaxed rules on margin trading -- borrowed funds that fuelled a spectacular stock market rally -- after measures including an interest rate cut failed to stop equities falling. The China Securities Regulatory Commission (CSRC) removed some limits on investors' minimum deposit requirements, it said on its website late Wednesday... Read more

How Sophisticated Investors Were Hurt in India. The first rule of investing is buy assets cheap and sell them high, but a recent report shows that some professional investors in India bought at the market’s peak and haven’t yet been able to cash their investments in... Read more

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