ASB Securities Morning Brief for Friday, 02 October 2015
Friday, 02 October 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares fell, led by a sharp drop and heavy trading in Z Energy as the market digested nearly a third of the stock changing hands. Z shareholder Infratil also fell. The S&P/NZX 50 Index dropped 7.94 points, or 0.1 percent, to 5585.420. Within the benchmark index, 22 stocks fell, 21 rose and seven were unchanged. Turnover was far higher than normal at $931 million, of which trades in Z made up $771 million... Read more

The New Zealand dollar rose after an official measure of manufacturing in China improved last month and traders bet next week's dairy auction will herald further gains in prices. The kiwi rose to 64.08 US cents as at 5pm in Wellington, from 63.65 cents late yesterday. The trade-weighted index advanced to 69.82 from 69.42... Read more

Investors told: Don't let softer dollar put you off. There is a warning that investors who hesitate about investing globally because of the fall in the New Zealand dollar run the risk of missing out... Read more

New Zealand is the 16th most competitive country in the world, according to this year’s Global Competitiveness Index*. The Index ranks countries according to their performance on factors such as innovation, market size, market efficiency, infrastructure, business sophistication and others. New Zealand has steadily climbed the competitiveness rankings, from 17th place last year and 18th the year before, and from placings between 20th and 24th in previous years... Read more

Former Prime Minister Helen Clark is backing the controversial Trans Pacific Partnership Agreement (TPPA), saying New Zealand cannot afford to be left out. The deal hangs in the balance at talks in Atlanta this week with one of the big sticking points being access to international markets for New Zealand dairy products... Read more

Trade tide runs in NZ's favour. The Port of Shanghai's deep-water facility at Yangshan shows no sign of slowing down. The 160ha site pumps through the equivalent of 13 million 20-foot containers every year, but even after several expansions it's still running at capacity... Read more

The Government has announced plans to cut ACC levies by $450 million for next year after changes to its funding policy and the removal of an old charge. Three-quarters of Kiwi businesses will have their levies reduced under proposals for the 2016/17 financial year, which have now gone out for public consultation. Work levies will be reduced by $171 million, earners' levies by $61 million, and motor vehicle levies by $218 million... Read more

D-day for new tax rules. Government tax measures intended to curb speculation in Auckland’s heated market come into effect today, but their arrival has been greeted with scepticism by some.... Read more

Hamilton beats Auckland's quarterly house price gain as boom spreads... Read more

Houses for sale drop to new low. Fewer residential properties are for sale nationwide than at any time since 2006, according to the latest data... Read more

QV says the average value of homes in Auckland is now $896,676, but there are signs the market is slowing... Read more

Government invites developers to build houses on Crown land in Auckland... Read more

NZ Super Fund and Infratil offload 29 pc of Z Energy with handsome gains... Read more

Infratil follows Z exit with $150m bond offer as it targets Pacific Hydro. Infratil shares fell 0.8 percent to $3.035, and have increased 3.3% this year... Read more

Prime cow prices lift... Read more

Medium to heavy prime lambs made another $5 a head at livestock sales at Coalgate last week... Read more

Steady wool market... Read more

Rabobank Beef Quarterly Q3 2015: Traded Volumes Are Reaching Quota Limits New Zealand and Australia beef exports to the US are set to reach their quota limits in Q4. Meanwhile, global economic conditions—such as the appreciation of the US dollar and the depreciation of the yuan and the real—are having an impact on beef trade, according to the Rabobank Beef Quarterly Q3... Read more

Fonterra CEO Theo Spierings' salary freeze offer too late, farmers say... Read more

Accounting software company Xero says it has passed a significant milestone in Britain where it now has 100,000 subscribers. That’s up from 83,000 at the end of March, which was a 77% increase on a year earlier... Read more

Pushpay tops 2,000 merchants, beating forecast at end of September... Read more

MyWave Holdings, the New Zealand company whose software attempts to personalise the relationship between consumers and businesses, has attracted Deutsche Bank's departing global head of equities trading Andre Crawford-Brunt to its second round capital-raising, which it expects to hit its oversubscription limit. Crawford-Brunt, a Deutsche Bank veteran of more than 20 years, made a $2.9 million personal investment in MyWave, pushing the total raised in the round to $4.5 million at a pre-money valuation of $50 million, or $3.45 per share, the company said in a statement. Most of the balance came from existing shareholders... Read more

Hellaby Holdings, the NZX-listed diversified investment company, still expects higher annual earnings in 2016, but warned the first-half will be down from the year earlier. Managing director John Williamson told shareholders in Auckland that earnings growth will be weighted to the second half, mainly due to the spread and timing of some major projects in its Contract Resources oil and gas services business and affirmed guidance that it expects to beat its record annual profit in 2016. The shares fell 0.3 percent to $3 and have declined 4.4 percent this year.... Read more

Pumpkin Patch: Living on the edge. As rumours swirled this week around ailing retailer Pumpkin Patch, it wasn't only the company's banker, ANZ, that was taking stock and hedging bets. Even the teddy bears for sale in the company's stores were being eyed up by its creditors... Read more

An overweight stance on global equities that was largely in place since September 2011 has been reduced to neutral by Nikko Asset Management’s Global Investment Committee (GIC) as the committee members were less optimistic about the outlook of corporate earnings and share prices in the United States, according to the company’s latest house view. The GIC noted that it has pushed back its forecasted timing of the U.S. Federal Reserve’s credit tightening to October from September... Read more

AIA makes major play in health insurance market. AIA has signalled its growth intentions with enhancements to its personal product range, and launching with a new health product that lifts medical cover to $500,000, with a discount regime to make their insurance products more affordable for customers... Read more

ANZ Group names chief financial officer Shayne Elliott as new CEO succeeding Mike Smith from 2016... Read more

The owners of the DB brewery in Timaru plan to spend $4 million on new equipment. Brewery manager Kim Haack said DB planned to install a returnable glass bottle line at the DB Draught brewery in Washdyke in 2016... Read more

Hamilton-based local fibre company, Ultrafast Fibre, has taken out the Deloitte Fast 50 Regional Award for Fastest Growing Technology Business in the Central North Island. The announcement was made at an event in Hamilton last night, where Ultrafast Fibre was also confirmed as listed in the Deloitte Fast 50 Index... Read more

Pyne Gould Corp risks having its shares suspended from trading for the second time in two years after again missing the deadline to lodge its annual report with the NZX. The company blamed the delay on auditors reviewing the accounts. Trading in the Guernsey based firm's shares was suspended for almost four weeks last year and the company was later fined and censured by the NZ Markets Disciplinary Tribunal over the delayed release of its 2014 annual report, which had been tagged by auditor PwC because the firm's inability to obtain sufficient information about PGC's investment in Torchlight Group and Torchlight Fund... Read more

Bath Street Capital will 'robustly defend' Pyne Gould's $22m claim, considering counterclaim... Read more

Puketi Logging sentenced over death of Eramiha Pairama.... Read more

Hundreds of Harvey Norman customers are irate after being told furniture they bought online in its "biggest ever retail sale" on Thursday morning had been priced incorrectly. After realising the botch up, the retailer sent a generic 'error' email to all of the 327 customers who purchased items in the sale, leaving some "fuming" their personal details had been shared.... Read more

The Commerce Commission is still wary about potential collusion through industry associations, which provides an avenue for rival firms to talk about the issues they collectively face and may lead to anti-competitive behaviour... Read more

Opinion/Analysis - Holly Ryan: Forget the credit crunch - food is the new global issue... Read more

Opinion/Analysis - Kirk Hope: Banking fraud or online scam? Dealing with your bank... Read more

Opinion - David Hargreaves: Indigestion is likely to be the order of the day in Government and Reserve Bank circles in the face of further strong house market figures. There will be some fingers, toes, and possibly a few other things, crossed in offices both of the Government and the Reserve Bank today... Read more

Opinion/Analysis - Anne Gibson: Are the Chinese the first to walk away from Auckland property? Moves to take the heat out of Auckland's housing market appear to be having an effect - and the Chinese could be the first to turn away... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket has started a fresh quarter on the front foot, rising 1.8 per cent higher to well above the 5000 point level. At the 4.15pm (AEST) official market close, the benchmark S&P/ASX200 index was up 90.5 points, or 1.8 per cent, to 5112.1, while the broader All Ordinaries added 85.5 points, or 1.69 per cent, to 5144.1.... Read more

The Australian dollar has bounced higher, helped by weak European inflation data which leaves the option open for more economic stimulus from the European Central Bank. At 7am, the local unit was trading at US70.18c, up from US69.95c yesterday.... Read more

The falling Australian dollar is giving the manufacturing sector a boost, with activity rising for a third straight month. The Australian Industry Group's Performance of Manufacturing Index (PMI) rose 0.4 points to 52.1 in September, indicating activity in the sector is increasing at a faster pace... Read more

Talks on the ambitious Trans-Pacific Partnership remained stuck on a handful of tough issues including auto parts and drug protections as trade ministers moved to a second day of negotiations Thursday.... Read more

The new head of the national lobby representing the views of business says it is open to debating a review of tax breaks that primarily benefit the rich – including superannuation concessions, negative gearing and capital gains tax – if there's an economic case and any changes are delivered as part of a wider reform package... Read more

China's slowing economy has failed to dent the enthusiasm of people to travel overseas, including Australia, during this week's national holiday. The seven-day break is the first chance to gauge the economic impact on Chinese tourists since shares on the Shanghai and Shenzhen exchanges started dramatically falling in June... Read more

A renewed surge in Melbourne property prices is driving continued double-digit home price growth across the combined capital cities. While Sydney retains the highest year-on-year property price increase at 16.7 per cent, CoreLogic RP Data's figures show that it is slowing and Melbourne is rapidly catching up... Read more

Capital city home values have grown 0.9 per cent, led by a 2.4 per cent surge in Melbourne. September's rise in home values, reported by CoreLogic RP Data, pushed the annual rate of home price inflation to 11 per cent across the eight state and territory capitals. That is up from 10.2 per cent in the year to August... Read more

First blocks of land released in Stockland’s South Caloundra development. It's been 11 years in the pipeline but a futuristic new city to be built in Queensland is finally rolling out its first blocks of land. Deputy premier Jackie Trad today helped launch and unveil the largest masterplanned development ever undertaken in Australia under single ownership... Read more

Struggling steel and mining group Arrium is making fresh cost cuts and short-listing parties to run the rule over a business it has earmarked for sale. The company announced a strategic review in August in an effort to reduce debt, after being hit hard by the plunge in iron ore and steel prices... Read more

Arrium announces cost-cutting plans to save $100 million, number of job losses unknown... Read more

Carbon Energy closes $2M funding from cornerstone investor... Read more

Barrick Gold, seeking to sell operations to cut debt, would consider approaches for its half share in the Kalgoorlie Super Pit, the country’s biggest open-cut gold mine, according to a company adviser... Read more

Invigor Group has signed three new contracts that are expected to add by the end of 2015 $200,000 to its revenue with no change to cost base. This revenue will strengthen the analytical capability of the company’s Insights Retail and Insight Visitor solutions... Read more

Platypus Minerals has been granted an ASX trading halt in relation to a capital raising... Read more

Shares in OZ Minerals jumped after US-based private equity outfit KKR took a 10 per cent stake in the copper and gold miner... Read more

Pacifico Minerals has been granted an ASX trading halt regarding a capital raising. The halt will last until the earlier of the announcement being made or the start of trade on Monday, 5th October 2015... Read more

White Cliff Minerals has climbed 33% to $0.008 today after the company announced a highly anticipated drill program would commence at its Aucu Gold project in the Kyrgyz Republic. Visible gold was discovered at surface... Read more

Rio Tinto iron ore boss Andrew Harding has given evidence in the Supreme Court this morning over a dispute with the receivers of Forge Group. Mr Harding is the most senior of five Rio executives to have been summonsed by insolvency specialist KordaMentha Restructuring for public examination... Read more

Australia may hit Volkswagen with millions in regulatory fines... Read more

Australia's competition watchdog Thursday warned that Volkswagen could be hit with up to Aus$1.1 million (US$780,000) for each pollution-cheating device installed and in use in its cars in the country. The German auto giant is facing its deepest-ever crisis after admitting up to 11 million diesel cars worldwide were equipped with sophisticated software that covertly switches on pollution controls when they undergo an emissions test... Read more

Rescued CITEC digs up $12m in savings. Will it be enough to get earnings back on track?... Read more

iCollege acquiring project management trainer... Read more

Australian banking giant ANZ's chief executive Mike Smith, who oversaw a big push into Asia, said he was stepping down Thursday after eight years in the top job. England-born Smith will be replaced by chief financial officer Shayne Elliott on January 1, 2016 but will serve as a non-executive adviser to the Australia and New Zealand Banking Group's board for at least a year due to his "invaluable understanding of and connections in Asia", the bank said... Read more

'Brutal' removal of David Jones chief Iain Nairn spins rumour mill... Read more

Suncorp welcomes new CEO. Suncorp's new chief Michael Cameron has taken control of the insurance and banking giant... Read more

Customer data stolen in Kmart Australia hack. Retailer Kmart has revealed it is "urgently" working to address a privacy breach which saw customer data stolen by external attackers. The company yesterday informed affected customers their name, email address, delivery and billing addresses, phone numbers and product purchase details had been taken in the attack... Read more

The new chairman of 7-Eleven, Michael Smith, will front franchisees at a series of meetings next week after confirming it is looking at the business model and "everything is on the table" including opening hours... Read more

Opinion - Adele Ferguson: 7-Eleven scandal: Worker exploitation destroys the economy. It was September 2014 when consumer advocate Michael Fraser first heard about ozYoYo, a website only known to foreign nationals looking for jobs at stores including 7-Eleven and other household names... Read more

International Headlines

U.S. Market Report: Wall Street started the last quarter of the year in the red on Thursday as Apple fell and investors parsed mixed U.S. data. Apple was down 2.2 percent at $107.83 on a report that chip suppliers were concerned the iPhone maker would cut chip orders for the fourth quarter. The stock was the biggest drag on the three major indexes... Read more

North/South Americas Market Report: North and South American markets are mixed. The Bovespa is higher by 0.24%, while the S&P 500 is leading the IPC lower. They are down 0.67% and 0.26% respectively... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The FTSE 100 gained 0.18%, while the DAX led the CAC 40 lower. They fell 1.57% and 0.65% respectively... Read more

Asian Market Report: Asian markets finished broadly higher today with shares in Japan leading the region. The Nikkei 225 is up 1.92% while Hong Kong's Hang Seng is up 1.28% and China's Shanghai Composite is up 0.48%... Read more

Oil prices fell as much as 1 percent on Thursday as the government's storm monitor altered forecasts for the path of the latest U.S. hurricane, snuffing out an early rally that was prompted by fears of storm damage U.S. East Coast oil installations. Brent LCOc1, the global benchmark for oil, was down 55 cents, or 1.1 percent, at $47.82 a barrel by 12:22 p.m. EDT (1622 GMT) after hitting a one-week high at $49.84. U.S. crude CLc1 was down 15 cents, or 0.3 percent, at $44.94. At its session high, it had been up more than $2 or 4 percent.... Read more

Platinum slipped US$6.50 to US$910 an ounce overnight, and is set for its biggest quarterly fall in more than seven years... Read more

U.S. factories show vulnerability to chill in global economy... Read more

The United States is the place to be for global investors. Foreigners can't get seem to get enough of U.S. assets. They view the American economy as safe as many other parts of the world struggle, including China... Read more

The Federal Reserve could get enough new information by its late October policy meeting to spur officials to raise short-term interest rates then, Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, said in an interview... Read more

Global economy loses steam as Chinese, European factories falter... Read more

Glencore's share price eased again on Thursday despite the company's assurances to investors that its debt-cutting plans remain on track and a decision by board member and legendary banker John Mack to buy $600,000 worth of stock. ... Read more

Alliance Trust CEO steps down from board as Elliott forces overhaul... Read more

Apple Inc. added former Boeing Chief Financial Officer James Bell to its board of directors on Thursday. Bell, who was a 38-year veteran of Boeing until he retired in 2012, served as the company's head of finance for nearly nine years... Read more

Wal-Mart Stores Inc is planning to lay off hundreds of people at its headquarters in Arkansas as part of the retail giant's efforts to pare costs, people familiar with the matter said. Fewer than 500 employees are expected to lose their jobs and an announcement could be made as early as this Friday, according to one of sources, who declined to be named because the move had not been made public... Read more

Rivals Microsoft Corp. and Google Inc. agreed to dismiss patent-related lawsuits between the two companies, in a sign of the cooling intellectual-property wars among technology giants. Microsoft and Google had roughly 20 lawsuits pending between them over uses of patents in mobile phones, Wi-Fi, Web video and other technologies... Read more

Hewlett-Packard board approves split into two companies... Read more

British tech entrepreneur Mike Lynch on Thursday said he would file a claim against Hewlett-Packard for $150 million in damages over allegations the U.S company made about his role in the acquisition of his software company Autonomy in 2011.... Read more

Dunkin' Brands Group Inc estimated slower comparable sales growth at its U.S. Dunkin' Donuts stores for the third quarter and said it would close 100 stores in the country. Shares of the company, which said it would close the stores this year and in 2016, fell as much as 13 percent on Thursday... Read more

General Motors Co told Wall Street on Thursday that its recovery is gathering momentum with improving margins, strong brands, new markets for high-tech vehicles, and prospects for stronger profits in coming years. The No. 1 U.S. automaker said it is targeting an increase in earnings per share to between $5 and $5.50 per share before items, from the $4.50 per share that Wall Street analysts expect for this year. GM earned $3.05 per share in 2014 before items... Read more

Generic drug giant Teva said Thursday it will acquire Mexican company Representaciones e Investigaciones Medicas (Rimsa) for $2.3 billion to strengthen its presence in the second-largest market in Latin America... Read more

Canada's Bombardier Inc is exploring the sale of a stake in any of its business areas, not just its rail unit, to ensure it can finish development of its delayed CSeries jet, according to four sources familiar with the situation... Read more

Uber has hit another snag in its quest for world domination. Rio de Janeiro's mayor has signed a bill into law that will fine drivers providing transport through informal taxis, including Uber. Other Brazilian cities, such as Sao Paulo, are pursuing similar bans... Read more

The European Commission says it is "following up" two reports that raise concerns that software used in TVs may be skewing their energy rating scores. One study indicates that some Samsung TVs nearly halve their power consumption when a standardised test is carried out... Read more

Italy's biggest bank by assets, UniCredit, appointed Bernardo Mingrone as its new group chief financial officer, it said on Thursday... Read more

Volkswagen is suspending the sale of 4,000 vehicles in the UK in the wake of the emissions scandal. The company said the vehicles may be equipped with the device that cheated emissions tests in the US... Read more

Houston is suing Volkswagen for $100 million claiming its cars that evaded U.S. emission standards "spew dangerous chemicals" in the air surrounding the Texas city. The Harris County attorney filed a lawsuit against Volkswagen Group of America on Wednesday. The city's air quality is below national standards, and the county attorney said the Volkswagen vehicles that skirted emission regulations set back Houston's clean-up efforts... Read more

VW says emission scandal investigations to take months... Read more

As if the Volkswagen scandal wasn't bad enough for Germany's reputation, state prosecutors admitted Thursday that they jumped the gun by announcing an investigation into the company's former CEO. In a statement on Monday, prosecutors in Volkswagen (VLKAY)'s home state of Lower Saxony said they had launched a preliminary investigation into Martin Winterkorn on suspicion of fraudulently selling diesel vehicles with rigged exhaust emissions... Read more

China's factories are still struggling... Read more

Toshiba may axe TV & PC workers, seek partner for nuclear operations-CEO... Read more

Japanese shares ended higher despite a key quarterly survey showing business confidence among big manufacturers worsened in the third quarter. The Bank of Japan's Tankan survey's headline index fell three points to plus 12, which was below expectations as business sentiment worsened for the first time in three quarters... Read more

SoftBank leads $1 billion investment in U.S. fintech startup SoFi... Read more

Opinion/Analysis - Howard Schneider and Balazs Koranyi: From heroes to bystanders? Central banks' growth challenge... Read more

Analysis - Tony Garcia: Is Ralph Lauren’s new CEO upmarket enough? Choice of Stefan Larsson as CEO is seen as ‘forward-thinking’... Read more

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