ASB Securities Morning Brief for Tuesday, 26 July 2016
Tuesday, 26 July 2016

New Zealand Headlines

New Zealand Market Report: New Zealand shares followed rising global markets to hit a new record, with Xero, Trade Me Group and Kathmandu Holdings leading the index. The S&P/NZX 50 Index rose 91.25 points, or 1.3 percent, to 7,317.3. Within the index 43 stocks rose, four fell and four were unchanged. Turnover was $126.9 million... Read more

The New Zealand dollar dipped as investors prepare for the Federal Reserve's policy review this week and will be looking for signs the world's biggest central bank will raise interest rates later this year. The kiwi slipped to 69.79 US cents at 5pm in Wellington from 69.89 cents at 8am and 69.97 cents on Friday in New York. The trade-weighted index decreased to 74.98 from 75.06 last week... Read more

New Zealand export log prices slid to a seven-month low in July as a stronger local currency and weaker prices in key export markets dented returns. The average wharf gate price for New Zealand A-grade logs dropped to $114 a tonne in July, from $116 a tonne in June, according to AgriHQ's monthly survey of exporters, forest owners and saw millers. That's the lowest level since December's $104 a tonne... Read more

The Reserve Bank’s recently announced nationwide restrictions requiring a 40% deposit to purchase a property will encourage new housing supply by pushing buyers towards ‘off the plan’ projects. The new restrictions contain the same exemption previously applied to new dwellings and off the plan sales, which incentivise purchasers to buy off the plan or new land and build packages... Read more

New Zealand house prices will rise another 17% before peaking late next year as accelerating building activity takes time to meet the imbalance between a lack of housing stock and growing demand, economic consultancy Infometrics says.... Read more

House prices could fall 11 per cent by late 2019, as building catches up: Infometrics... Read more

Ray White has expanded its agency services to China, signing an agreement to list new and old properties for sale with China's largest real estate agency, Lianjia, also known as Homelink. Lianjia, which has more than 6000 branches in over 25 cities in China, will co-list Ray White's New Zealand and Australian and properties in Mandarin on its websites... Read more

Investors planning to sell their property may be tempted to try their hand at a private sale. But are private sales a good idea? The superhot housing market means demand for property is running high, particularly in Auckland. Odds are now tipped in favour of sellers... Read more

Economist frets on property purchase tax ranking. A study ranking New Zealand the lowest for property purchase tax highlights a missed opportunity to make housing more affordable and boost supply, according to an economist... Read more

Auckland Council will no longer buy land for parks, will rely on developers to provide them. Auckland Council will no longer purchase land for parks and reserves, instead changing the rules to throw the responsibility on to developers. Auckland Council's Parks, Recreation and Sport Committee adopted the Open Space Provision Policy at its July 20 meeting.... Read more

An Australian roboadvice firm is looking to expand into New Zealand. Future Penny, launched by financial adviser David Pettit, is to launch officially in August, in Australia. But Super Advice chief executive Allan Rickerby, who recently entered a partnership with Pettit with a seed investment in Future Penny, said it intended to test the waters in New Zealand soon after... Read more

IFA checks in on RFA members. IFA has approached its non-AFA members, to warn them they face the need to upskill to keep up with Financial Advisers Act changes.... Read more

The government is seeking funding from businesses and philanthropists to support its "aspirational" policy, announced today, to make New Zealand predator-free by 2050.... Read more

Prime Minister John Key has publicly reprimanded Trade Minister Todd McClay for "dancing on the head of a pin" leaving Key to give false answers to reporters over fears of Chinese trade retaliation. After days downplaying Stuff reports, McClay on Monday revealed officials have been "for months" examining reports that China could retaliate if an investigation into steel dumping in New Zealand went ahead... Read more

Uncertainty persists as to what Britain's exit from the European Union will mean for New Zealand primary producers, but special agricultural trade envoy Mike Petersen says nothing will change while the parties go through their two-year "divorce" proceedings. Petersen, who addressed yesterday's Red Meat Conference in Auckland, said he was confident New Zealand would maintain its strong trade relations with both the UK and the EU but he acknowledged that there was a lack of confidence in the short term... Read more

Australian supermarket chain Woolworths has written off A$309 million from the value of its New Zealand clothing and homeware retailer EziBuy and wants to sell the business as part of an overhaul that will also see some local Countdown stores closed. The ASX-listed shares last traded at A$22.45 and have dropped 8.4 percent this year.... Read more

Six Countdown supermarkets will be closed before the end of their lease terms. Australian parent company Woolworths announced to the ASX a A$1 billion plan to boost its bottom line that includes cutting 500 jobs in Australia... Read more

Z Energy, which is completing the integration of the Caltex fuel stations and Challenge! brand, has warned investors it expects earnings to be $5 million lower due to Caltex's deal with AA Smartfuel. In a statement published to the NZX, Z Energy said that after it had completed due diligence but before the sale was completed, "Caltex renewed its AA Smartfuel contract." Details of the contract aren't being disclosed but it will hit profit between calendar 2015 and 2016. The shares rose 1.2% to $8.50, having gained 24% so far this year.... Read more

Auckland-based manufacturer Buckley Systems has almost doubled its factory space to meet demand for its precision electromagnets. The company started by former EY Entrepreneur of the Year Bill Buckley 30 years ago is a global leader in its field, manufacturing and supplying precision electromagnets which go into machines that make 80 percent to 90 percent of the world’s silicon chips... Read more

$140m cash boost for China-based bank. China Construction Bank New Zealand has received a $140 million capital injection from its Beijing-based parent in a move its boss has described as a "vote of confidence" in the Chinese lender's local unit... Read more

Augusta Capital's shareholders have overwhelmingly backed the sale of its Finance Centre properties in central Auckland for $96 million at a special meeting to consider the deal. Some 58,239,157 votes or 96.23 percent were cast in favour. 2,281,802 or 3.77 percent of votes were against. Shares in Augusta Capital rose 0.9 percent or 1 cent to $1.12. They've gained 11 percent since the start of the year.... Read more

Wellington International Airport plans to sell as much as $60 million of eight-year bonds, joining a growing number of companies taking advantage of record low-interest rates through the debt market... Read more

Singapore Airlines today announced a further five flights will be added to this year’s supplementary services to Christchurch for the peak summer season. A total of 35 round trip supplementary flights will operate between Christchurch and Singapore from 13 November 2016 to 5 February 2017, creating a new record for Singapore Airlines in the South Island.... Read more

An electricity company has won regulators' backing for a decision to increase charges to solar-panel users. Unison Networks – which operates in Hawke's Bay, Taupo and Rotorua – removed a network charge discount of about $300 a year for solar panel users in April, saying the discount meant costs were unfairly being passed to other consumers.... Read more

Suncorp has appointed Patrick Farrell as the group's new head of investments, a role which covers New Zealand.... Read more

Michael Anderson tipped as new MediaWorks CEO... Read more

Swamp kauri case in Auckland High Court. Exporters are flouting the rules to ship "the world's most valuable timber" out of New Zealand, the High Court at Auckland has heard. The Far North Environmental Protection Society is asking Justice Kit Toogood for a judicial review of swamp kauri exports... Read more

Creditors of defunct electrical retailer Dick Smith have voted in favour of liquidation. Administrator McGrathNicol will take over as liquidator of 10 companies within the Dick Smith group following the vote by creditors at a meeting in Sydney today... Read more

Two of Hugh Green's children ask court to overrule High Court, remove their sister from family trust... Read more

Teens out of pocket as Valleygirl goes into administration.... Read more

Kim Dotcom breached an asset freeze order by taking a loan from his lawyers on behalf of a trust for his children, a court has heard. Matt Sumpter, the lawyer for 20 Century Fox, which is suing Mr Dotcom for alleged copyright breaches, told Justice Patricia Courtney in the High Court at Auckland that the loan was $220,000, RNZ reports... Read more

The fight against live-streaming pay-per-view events is ramping up as private investigators hunt down and doorknock suspected online miscreants. A media law expert says the new tactics are legitimate as evidence is needed should streamers get hauled before the courts for allowing others to watch online for free... Read more

Opinion - Catherine Harris: A timely lesson from our Aussie supermarket cousins... Read more

Opinion - Liam Dann: Collapses give rise to robust NZ finance rules. Sometimes its takes a crisis to bring meaningful change. New Zealand's housing market, for example, is overdue the kind of painful crash needed to force some serious policy shifts in how we treat housing as an investment.... Read more





Australian Headlines

Australian Market Report: Dividend hunters drove the Australian sharemarket to a fresh 11-month high but resource stocks floundered as oil and iron ore prices dropped. The S&P/ASX 200 index climbed to a 0.9 per cent gain in early trade, but it slipped back to close up 35.4 points, or 0.64 per cent, at 5533.6 on volume well below average as gains in other Asian markets remained muted.... Read more

The Australian dollar has weakened as investors await key inflation data later this week that could determine whether the central bank cuts the interest rate next month. At 8.30AM (AEST), the local unit was trading at US74.65 cents, down from US74.88 cents on Friday.... Read more

WA slumps to seventh spot in CommSec State of the States economic report... Read more

Economists this week turned their attention to the inflation figures due on Wednesday and the strong chance of another interest rate cut next month. HSBC economists Paul Bloxham and Daniel Smith said the consumer price index numbers are always important for the Reserve Bank... Read more

If Australia increased the workforce participation of older workers it could boost the economy by up to $78 billion, a new report has found. Consulting firm PwC examined all OECD countries for its 'Golden Age Index' and found Australia to be in the middle of the pack for employing people aged 55 and over.... Read more

Shares in WA oil and gas play Australis Oil & Gas have made a steady debut on the ASX. The stock closed at 25.5 cents, up half a cent on its 25 cent issue price... Read more

Newcrest Mining has scraped into meeting its full year production guidance, despite posting lower output in the June quarter as it continued to struggle with disruptions at various operations. Australia's largest gold miner said it produced 2.44 million ounces of gold and 83,070 tonnes of copper for the full year ended June 30. The numbers were just inside its full year guidance of between 2.4 to 2.6 million ounces of gold and between 80,000 to 90,000 tonnes of copper. At 1155 AEST, Newcrest Mining shares were down 48 cents, or two per cent, at $23.57 each.... Read more

RungePincockMinarco expanded its suite of commodity based mine scheduling software solutions, through the launch of Stratigraphic Metals XPAC Solution... Read more

Melbourne-based Impact Investment Group (IIG) is seeking $100 million for its unlisted Solar Income Fund.... Read more

LWP Technologies Ltd has increased its cash balance by $214,100 following a share purchase plan which issued 42.8 million shares at $0.005. All directors subscribed fully for their allocation.... Read more

S2 Resources has taken advantage of its recent share price run to flag a capital raising. Shares in the gold explorer were placed in a trading halt this morning with the company foreshadowing a placement and an associated share purchase plan. It is believed the placement will aim to raise about $9 million at 40 cents a share through broker Hartleys. Shares in S2 last traded for 46.5 cents.... Read more

FirstWave Cloud Technology Ltd has booked $2.4 million worth of new contracts secured from 15 enterprise and government customers. The new orders are on the back of FirstWave’s B2B strengthened cloud security platform for Telstra Corporation Ltd’s (ASX:TLS) customers by the integration of Next Generation Firewalls (NGFW)... Read more

Emefcy Group has signed advisory agreements with several key China-based advisors in helping the company implement its China strategy. Emefcy has closed a 49,400,000 shares placement to raise a total of $31.6 million.... Read more

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

ThinkSmart, the WA retail point-of-sale finance company, is quitting the Australian Securities Exchange for London’s Alternative Investment Market. The company had been working towards a float of its core UK business by the end of the year, but instead said today it would delist from the ASX in favour of AIM... Read more

CV Check Ltd is heading to market with a capital raising, and the ASX has granted the company a trading halt pending details... Read more

Buddy Platform Ltd’s acquisition target Noveda Technologies, Inc. has been selected to be part of The New York State Energy Research and Development Authority US$36 million pledge to increase the energy efficiency of New York's commercial buildings. NYSERDA is a public benefit corporation promoting energy efficiency and the use of renewable energy sources in the State... Read more

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

Australia's 2016 grape harvest has been a good one, with higher prices paid for wine grapes, and a bigger intake of fruit. The wine sector's peak body, Wine Australia, says many in the wine sector are describing the 2016 vintage as "sensational"... Read more

Queensland sinks $1 million into drones. The Queensland government will hand over $1 million to fund the development of drone technologies that could benefit critical industries under a partnership with Boeing, Shell QGC and Telstra.... Read more

8common Ltd has migrated long-term customer Transport for NSW to its cloud-based expense management platform. The three year contract will provide a positive impact to this financial year's revenues and beyond with a minimum annual recurring revenue increase of 23% for this contract... Read more

Supermarket giant Woolworths will ramp up its offering of self-service checkouts for customers, as it looks to improve radically its service offering to regain lost market share from arch rival Coles and fast-growing discount supermarket chain Aldi. Woolworths chief executive Brad Banducci said he was looking to what he calls “self checkouts” as part of a broader plan to improve the company’s ability to get customers through stores more quickly... Read more

Wounded retailer Woolworths is finally closing some of its supermarkets. The great Australian chain has been bleeding for a long time — this week it stepped out of the fight to patch its wounds. It is going to shut 17 Australian supermarkets that are losing money and open a lot fewer new ones. It will use the savings to try to make the rest of its outlets more profitable. Woolworths has more supermarkets than Coles or Aldi, but it is not doing so well... Read more

Food delivery app UberEATS launched in Sydney, with a hatted eatery in the mix... Read more

Dick Smith creditors have voted to wind up the electronics retailer in a bid to recoup losses but many remain unlikely to see any of the $260 million-plus owed to them by the collapsed business. Administrator McGrathNicol will take over as liquidator of 10 companies within the Dick Smith group after creditors voted in favour of liquidation at a low-key meeting in central Sydney on Monday... Read more

Former federal trade minister Andrew Robb has joined the board of Ten Network as representative of mining magnate and significant Ten shareholder Gina Rinehart. Mr Robb, who retired from parliament ahead of the July 2 federal election, was announced on Monday as the replacement director for John Klepec, the chief operating officer of Ms Hancock's Hancock Prospecting... Read more

Telstra's COO is leaving the telco after 12 years... Read more

Telstra chief operating officer Kate McKenzie has announced her retirement from the beleaguered national carrier which has faced six months of crisis plagued by a series of network meltdowns. Ms McKenzie, 55, joined Telstra in 2004 and took over as chief operating officer in October 2013. Ms McKenzie was the face of Telstra during its string of network failures... Read more

Start-up boss planning to sue NRMA in David and Goliath intellectual property battle.... Read more

Perth A-lister indicted in “multimillion-dollar” fraud. Perth A-lister and tech millionaire Zhenya Tsvetnenko has been indicted in the US over a multimillion-dollar text messaging scheme which US authorities claim funded a “lavish lifestyle” of “expensive vacations and gambling”... Read more

Analysis - Vanessa Desloires: Australian dollar at 'crossroads' and likely to trend lower to year's end... Read more





International Headlines

U.S. Market Report: U.S. stocks fell from record highs on Monday as oil weighed on energy shares and investors awaited an avalanche of quarterly reports. Shares fell almost across the board, with energy stocks leading declines across 10 S&P 500 sectors and consumer discretionary a loan bright spot, helped by a 1.97-percent gain in Netflix... Read more

North/South Americas Market Report: North and South American markets are lower today with shares in Mexico off the most. The IPC is down 0.95% while U.S.'s S&P 500 is off 0.46% and Brazil's Bovespa is lower by 0.34%... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The DAX gained 0.50% and the CAC 40 rose 0.16%. The FTSE 100 lost 0.30%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Hang Seng gained 0.13% and the Shanghai Composite rose 0.10%. The Nikkei 225 lost 0.04%... Read more

Forget the Federal Reserve meeting and second-quarter gross domestic product. The biggest news this week could be a relatively obscure indicator —the employment cost index for the second quarter — to be released by the Labor Department on Friday. The data could show that, according to certain measures, wage growth hit at seven-year high in the April-June quarter, unabashedly good news for the U.S. economy... Read more

U.S. emerges as safe haven amid chaotic world. Contrary to the ominous picture painted by Donald Trump, America has once again emerged as a port of safety for investors navigating the stormy world. The U.S. stock market is sitting near record highs and the Dow is up an incredible 3,100 points since the mid-February low.... Read more

US internet firm Yahoo is being acquired by American telecoms giant Verizon Communications for nearly $5bn (£3.8bn) in cash. Yahoo will be combined with AOL, another faded internet star, which Verizon bought last year... Read more

Marissa Mayer's payday: 4 years, $219 million... Read more

Don’t cry for Yahoo--the stock has raced past previous leaders of the dot-com era. The internet company’s shares have lapped the ‘four horsemen’ of the dot-com boom at least three times... Read more

The DKNY fashion brand is heading back to New York, where designer Donna Karan started the clothing business. Founded in the 1980s, the Donna Karan label styles itself as "an icon of the New York Fashion scene". It was bought by French luxury giant LVMH in 2001, but the loss-making business is now returning to the US in a $650m (£500m) takeover.... Read more

Tesla Motors Inc. is scrambling to finish building its massive $5 billion battery factory here years ahead of schedule to meet demand for its coming cheaper sedan and provide power for new types of vehicles Chief Executive Elon Musk says are under development. Tesla TSLA, +3.94% has doubled the amount of people constructing the “gigafactory,” which sits on more than 3,000 acres near Reno. Now, 1,000 workers build seven days a week on two shifts in an effort to start churning out lithium-ion cells by early 2017... Read more

Starbucks Corp on Monday said it was tweaking its management structure as part of a long-range growth strategy that includes opening new retail concepts, including upscale coffee shops and bakery outlets. Cliff Burrows, head of Starbucks' U.S.-dominated Americas business for eight years, will lead a new group called Siren Retail... Read more

Apple Inc. is expected to report its second straight quarter of iPhone declines on Tuesday, but the company’s software and services business could provide growth that hardware sales have lost. Apple is on tap to report results for its fiscal third quarter after the market closes Tuesday. The company has struggled to grow hardware sales in recent quarters as customers await next-generation devices, take longer to upgrade and opt for cheaper competitors more often than in the past... Read more

EU working with consumer groups to pressure Volkswagen for compensation... Read more

Two leading European airlines -- Ryanair and easyJet -- are warning about the damaging effects of the Brexit vote. On Monday, Ryanair issued a statement saying it would "pivot our growth away from U.K. airports and focus more on growing at our European airports over the next two years."... Read more

A British retail magnate could be stripped of his knighthood following the release of a blistering parliamentary report on the collapse of department store BHS. The new report by British lawmakers is sharply critical of Sir Philip Green for his role in the demise of BHS, which left a £571 million ($750 million) hole in the company's pension scheme and could result in up to 11,000 job losses... Read more

Chinese technology and smartphone giant Huawei has reported a 40% surge in revenue for the first half of 2016. The firm reported 245.5bn yuan ($37bn, £28bn) in revenues, up from 175.6bn yuan for the same period last year. It did not disclose its net profit but said the operating margin was 12%, down from 18% in the first half of 2015... Read more

Nintendo has some bad news for investors: It's not expecting a huge profit boost from Pokemon Go. Shares in Nintendo plummeted the daily limit of 18% on Monday after the legendary gaming company told investors that Pokemon Go will have only a "limited" effect on its bottom line... Read more

General Motors has put on hold a planned $1bn investment in India as it reassesses its strategy in the country. Its sales in India have fallen nearly 40%, and its share of the passenger vehicle market has also dropped. A regulatory crackdown on diesel vehicles has also led the company to rethink its plans... Read more

Opinion - Jason Notte: Beating Budweiser at its own game is just the beginning for craft beer. The craft beer lobby scores big in Washington as age-old distribution agreements unravel... Read more

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