ASB Securities Morning Brief for Friday, 09 October 2015
Friday, 09 October 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares fell as investors sold dual-listed stocks after the kiwi dollar climbed against its Australian counterpart. Kathmandu Holdings, Fletcher Building and Sky City Entertainment Group. The S&P/NZX 50 Index fell 24.24 points, or 0.4 percent, to 5625.79. Within the index, 30 stocks fell, 17 rose and three were unchanged. Turnover was strong at $212 million... Read more

The New Zealand dollar was little changed as improving investor sentiment supported demand for risk-sensitive assets, helping push up Asian equities and supporting commodity-linked currencies. The kiwi slipped from a 6 1/2-week high, trading at 65.87 US cents at 5pm in Wellington from 66.05 cents at 8am and almost unchanged from 65.88 cents yesterday. The trade-weighted index traded at 71.04 from 71.17 yesterday... Read more

September 2035 Government inflation linked tender sees average yield at 2.4% up from last months 2.3%; increase in number of successful bids, breaking recent trend... Read more

The Trans-Pacific Partnership could halve the number of major foreign investments in New Zealand which need to pass "good character" and business experience tests. The Government requires foreigners who want to make an investment of more than $100 million to get approval from the Overseas Investment Office, which evaluates their business record and character. Under the TPP, the threshold will rise from $100 million to $200 million.... Read more

TPPA may open doors for processed wood products. The forest and wood processing industries have welcomed the removal of tariffs on wood products across the 12 countries of the Trans-Pacific Partnership (TPP). “We have yet to see the detail, but we understand that all tariffs on logs and wood products will be reduced to zero. That represents a $9 million saving,” says Wood Council chair Bill McCallum... Read more

TPP: Generic drug applications under greater threat of injunctions... Read more

Westpac economists see unemployment hitting 6.5% next year - in part driven by the high rate of net migration. However, they are forecasting that the large inflows will gradually taper off - and this could ultimately lead to disappointment for property speculators betting on continued large capital gains driven by population growth. The net gain in population through migration exceeded 60,000 in the year to August, which was a new record high.... Read more

40pc of New Zealand jobs could disappear, experts predict... Read more

Reliance on CVs ill-advised. Nearly half of Auckland investors believe the Council CV on their property is incorrect, new Crockers research shows – but are CVs reliable anyway? Almost all of the participants in the latest Crockers Property Investment Index survey had examined their investment properties’ most recent CV... Read more

Choice crucial to solving Auckland housing woes. Auckland Council has been urged not to buckle to community pressure and institute restrictive requirements under the Unitary Plan, by a speaker at the Property Council’s Residential Development Summit... Read more

Property Council has launched its residential arm, the Residential Development Council at its Residential Development Summit in Auckland today... Read more

More publicly-funded science is being commercialised after a decade of government 'pre-seed investment, according to an independent review released today... Read more

Science and Innovation Minister Steven Joyce is happy with the close association the country's seven Crown Research Institute have with their specific industries, even as their funding comes under review in the National Statement on Science Investment... Read more

NZ Super Fund lauds active management strategies... Read more

Combination of rising sharemarkets & falling NZ dollar help reduce NZ Super Fund's tax bill by almost 90%. Finance Minister Bill English, struggling to return the Government's books to surplus, may not be happy to hear the annual tax bill of one of the country's biggest corporate taxpayers has dropped nearly 90%.... Read more

Stronger NZ dollar lowers wool prices... Read more

Investment could turn sheep milking into NZ's next billion dollar industry... Read more

A2 Milk, which markets milk with a protein variant said to have health benefits, plans to raise $43 million through a share placement and share purchase plan, just months after it shelved an equity raising when its biggest shareholder expressed interest in making a full takeover... Read more

Landcorp forges accord with leading environmentalists. They have been some of farming's harshest critics; now six environmentalists are going to advise state-owned farmer Landcorp on how to be more sustainable. In the past there has been too much "them and us" between environmentalists and farmers, says Landcorp chief executive Steven Carden... Read more

A Canterbury company is finding success turning home-grown oilseed rape – regarded as a commodity crop elsewhere – into a high-quality food-grade oil, sought-after domestically and overseas. This is providing a stable long-term arable option, particularly in South Canterbury where much of the crop is grown... Read more

Michael Hill first-quarter sales rise 9.9%, sees stable gross margin after difficult second half last year... Read more

Pyne Gould shares suspended for second time in two years over tardy filings... Read more

Scott Technology, the industrial automation manufacturer, more than doubled annual profit as revenue was boosted by a weaker kiwi dollar and gains from its RobotWorx acquisition. Profit rose to $6.1 million in the 12 months ended Aug. 31 from $3 million a year earlier, the Dunedin-based firm said in a statement. The board declared a final dividend of 5.5 cents per share, taking the total dividend to 8 cents, unchanged from a year earlier. Scott Technology shares were unchanged at $1.38 and have declined 9.8 percent since the start of the year.... Read more

Tainui offers stake in mega-mall. Hamilton mega-mall Te Awa, The Base has hit the market in a $100 million-plus deal which could be one of this year's largest property transactions. Tainui Group Holdings is selling a half-share of the city's largest shopping centre, with a floor area of 8.5ha on a vast 31ha site at the country's largest single retail and entertainment destination... Read more

Foodstuff's Liquorland tipped to get benefits from The Mill deal. Foodstuffs' takeover of the The Mill liquor chain could increase the supermarket industry's dominance of the retail liquor trade at the expense of suppliers, an independent retailer believes. Twenty-one of The Mill's stores have been bought by Foodstuff's Liquorland arm and will be turned into franchised outlets of its existing Liquorland chain. The chain's nine or so other stores have been sold to other interests... Read more

Crowdfunding scene fit to burst. How many equity crowdfunding platforms is too many equity crowdfunding platforms? This newfangled area of capital raising, which allows shares in businesses to be offered to the public online, has become an incredibly busy space... Read more

Rival media companies Fairfax Media, NZME, Television New Zealand and MediaWorks have set up a platform to pool their advertising inventory in an effort to stave off the encroaching reach of global internet groups such as Google Inc, Facebook and Yahoo Inc... Read more

Solid Energy says no more mine closures with strong interest from market... Read more

Solid Energy plans to shut unprofitable Huntly East mine, sees no prospect of finding a buyer... Read more

Some workers are blaming Solid Energy, not coal prices, for the closure of the Huntly East mine in the Waikato.... Read more

Drive to encourage more Pasifika business owners continues. "The start-up phase for any business is crucial - it's all or nothing, really!" - Those are the wise words of Wellington Pasifika Business Network Chairman, Paul Retimanu. Retimanu is encouraging people to attend the network's Business Start-Ups workshop next Thursday as he believes it will equip people with all they need to know when starting their own business... Read more

Morningstar has appointed Carolyn Holmes as director of equity research for Australia and New Zealand.... Read more

18-month process gets Whangarei childcare centre owner back to face fraud charges.. A Whangarei woman has been extradited from Australia after an exhaustive 18-month process to place her before the courts for frauds against the Ministry of Education totalling $540,000.... Read more

If it seems too good to be true, it almost always is. An investigation by the Commerce Commission has revealed that people entering Event Cinemas' "Win $1 million" prize promotion were not really in the draw to win $1m. Instead, they were entering a draw to win the opportunity to play a game of chance, where the odds of winning the major prize were one in 1000... Read more

Opinion - Cecile Meier: Kiwi employees don't make enough fuss. Since moving to New Zealand, one thing I keep noticing is people's strong work ethic and desire to accommodate their employer in the workplace. In France, employees complain, protest, and strike regularly. For farmers, blocking motorways with tractors verges on a hobby... Read more

Opinion - David Farrar: TPP: The battle for the IP chapter... Read more

Opinion - Pattrick Smellie: Tax system playing catch-up with globalisation. One of the many mildly hysterical social media memes to emerge since the conclusion of the Trans Pacific Partnership talks is a claim that global retailers will be able to sue the New Zealand government if it tries to collect GST on purchases from overseas websites... Read more

Opinion - Robert Scollay: New world of market access outweighs imperfections. It may be difficult at first for observers - especially New Zealanders conditioned to think of trade only in terms of dairy products - to grasp the magnitude of what has happened with the agreement on trade liberalisation just reached in the TPP... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket has closed higher for a fourth day, despite giving back most of an early rally, as resources stocks continue to build momentum on the local bourse. At the 4.15pm (AEST) official market close, the benchmark S & P/ASX200 index added 12.5 points, or 0.24 per cent, to 5210.4, while the broader All Ordinaries rose 13 points, or 0.25 per cent, to 5241.4.... Read more

The Australian dollar fell today, ending a rally of six consecutive trading days with gains against the US dollar, as investors recalibrated their bets as China returned to the market from a week of holidays. The currency climbed above US72 cents overnight, the highest level since the US central bank meeting in mid-September, but weakened rapidly in Asian midday trading. At 4pm (AEDT), it was trading at US71.74c.... Read more

Australian bond futures prices are slightly higher despite a number of factors weighing on the market. Nomura head of macro products Jon Linton says the gains made during the day are just a temporary bounce and believes that the Australian bond market is on a weakening trend... Read more

Indonesia seems to be more upbeat about relations with Australia following Malcolm Turnbull's elevation to the prime ministership. Indonesia Ambassador Nadjib Riphat Kesoema has declared the relationship is once again on an "upward trajectory" after alluding to tension in recent years over issues such as the executions of two Australian drug smugglers, boats, cattle and a phone tapping scandal... Read more

Government amends 'Netflix' tax bill for GST on digital goods. The Australian government has released its revised exposure draft of legislation that would see GST added to all locally-bought digital products and services sold by overseas vendors by July 2017... Read more

Calls grow for government to release FSI response... Read more

Housing downturn bigger risk to Australia than Chinese hard landing: economist... Read more

Rents across each of Australia’s capital cities is getting cheaper... Read more

Transport Minister Dean Nalder has handed Chris Ellison’s Mineral Resources a win at its Pilbara iron ore operations, approving a trial of so-called Super Quad road trains on public highways. At 60 metres long, the massive rigs are 6.5m longer than standard road trains that haul Pilbara iron ore and Mr Nalder said yesterday they would be the longest road trains in the country... Read more

Metallum Limited to make material operational update... Read more

Nickel price to double: analyst. The price of nickel will almost doubt to $US20,000 a tonne by March 2017, according to investment bank and corporate advisor Alto Capital... Read more

Ventnor Resources, Sandfire Resources eye copper-gold growth... Read more

Galaxy Resources has been granted an ASX trading halt pending details in relation to the Mt Cattlin spodumene project, located in Western Australia... Read more

Magnis Resources is heading to market with a capital raising, and the ASX has granted the company a trading halt to prepare... Read more

'Future still bright for Nickel West'. BHP Billiton nickel boss Eddy Haegel says struggling Nickel West needs to develop a “junior miner mindset” to survive the nickel price crisis and thrive in the future... Read more

Leigh Creek coal might produce gas and fertiliser under ambitious plan after SA mine closure. Plans are advancing to produce gas and fertiliser from the coal deposits of outback Leigh Creek in South Australia after mining ends next month. Appraisal drilling of known coal deposits is about to start, the chairman of the Leigh Creek Energy Project, Daniel Justyn Peters, told 891 ABC Adelaide... Read more

Jobs go at Wheatstone LNG. As many as 200 white-collar jobs have been axed at the Chevron-run $US29 billion ($40.4 billion) Wheatstone LNG development near Onslow this week as part of corporate belt-tightening that has been exacerbated by collapsing oil and gas prices... Read more

Port Kembla job losses: BlueScope Steel to shed 500 jobs, unions agree to wages, bonus freeze... Read more

Port and rail operator Asciano will spend $100 million on a new freight terminal in western Sydney as part of its strategy to move more freight from Port Botany on to rail. The company plans to develop the terminal on 17 acres at St Marys in western Sydney. It will have capacity to handle up to shipping containers... Read more

Bank of Queensland posts record full year profit... Read more

Bank of Queensland hopes to benefit from the house price boom outside its home state after it announced a record full year profit of $318 million. The bank announced a 22 per cent increase in net profit for the 12 months to August 31 and, although Queensland accounted for less than half its total lending for the first time, chief executive Jon Sutton said the organisation could benefit as people head north in search of more bang for their housing buck... Read more

Macquarie Group is forking out $8.2 billion for a major car leasing and finance business from ANZ, and seeking financial support from shareholders to fund the deal. The investment bank has also flagged a big rise in half year profit to over $1 billion, but lowered its expectations for the following six months... Read more

BGD Corporation has been granted a trading halt today pending details of a material acquisition.... Read more

Woolworths could unlock 'treasure chest' by dumping Masters. Australia's largest retailer could release billions of dollars in capital if it cuts its losses with Masters, sells BIG W and goes back to being a food-and-liquor retailer with a strong gaming operation... Read more

Britain's John Lewis — the department store that DJs and Myer dream about — just may be putting a toe in the Australian market. It is 7:30am and Andy Street, chief executive of Britain's top department store, bounds into his boardroom in the John Lewis London head office and enthusiastically offers an outstretched hand... Read more

Shares in NRW Holdings have skyrocketed after the contractor had another court victory over Roy Hill project manager Samsung C&T over their payment disputes... Read more

Qantas eyes TPP boost. Qantas Airways’ long-haul operations have helped the airline return to profit and should benefit from the Trans-Pacific Partnership trade accord, alongside deepening ties with American Airlines and Emirates Airline, the Australian carrier's chief executive said... Read more

A devastating fungal disease has been found at a Queensland banana farm for the third time this year. The Department of Agriculture on Thursday confirmed one plant had tested positive for the soil-borne Panama TR-4 at the Robsons' Tully banana farm... Read more

7-Eleven changes model yet franchisees still fume. 7-Eleven has offered to radically change its business model in an attempt to improve the financial position of its franchisees following the worker exploitation scandal that has rocked the convenience store giant. But franchisees were unconvinced, raising the prospect of class actions... Read more

Women join Western Power’s board. Western Power has emerged with arguably its most high-profile board in the State Government utility’s history following the appointment today of Sharon Warburton and Vicki Krause as the latest non-executive directors.... Read more

A group of 34 first home buyers say they are devastated after losing a major class action lawsuit launched in a bid to prevent their property developer going through with a ‘sunset clawback’. The group, who purchased 34 out of 94 off-the-plan units in a Wolli Creek apartment complex between November 2009 and April 2010, launched the class action earlier this year against the developer, Kaymet Corporation, after it rescinded their contracts in March 2013... Read more

IOOF says it will "vigorously defend" any claim brought against the company, including a planned class action being run by Maurice Blackburn that could burn a $100 million hole in the company's bottom line. On Thursday, Fairfax Media revealed Maurice Blackburn was preparing a class action against the financial services giant... Read more

Opinion - John Quiggin: Bitcoins are a waste of energy - literally. Vast amounts of electricity go into feeding the Bitcoin delusion. Fortunately, it's unlikely that the digital currency will survive long enough to generate the environmental disaster that would arise if it became a major part of the financial system, writes John Quiggin... Read more

International Headlines

North/South Americas Market Report: North and South American markets are mixed. The Bovespa is higher by 0.12%, while Mexico's IPC is off 0.12%. Shares in U.S. are unchanged with the S&P 500 at 1,995.73... Read more

European Market Report: European markets finished higher today with shares in London leading the region. The FTSE 100 is up 0.61% while Germany's DAX is up 0.23% and France's CAC 40 is up 0.18%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 2.97%, while the Nikkei 225 led the Hang Seng lower. They fell 0.99% and 0.75% respectively... Read more

Oil prices bounced back in Asia Thursday as investors weighed a rise in US crude inventories and production against a forecast by OPEC's chief of rising demand. US benchmark West Texas Intermediate for November delivery climbed 23 cents to $48.04 and Brent crude for November gained 21 cents to $51.54 in late-morning Asian trade.... Read more

Growth is set to slow in each of the world's three largest economies, according to leading indicators released on Thursday by the Organisation for Economic Cooperation and Development. ... Read more

Now 'right moment' for carbon tax: IMF chief... Read more

US jobless claims fall to 263,000... Read more

End of the road for corporate tax cheats? Life is about to get much tougher for global corporations that use loopholes to avoid paying taxes. Finance officials from the world's top 20 economies are about to approve a package of new rules that should help governments crack down on corporate tax avoidance... Read more

Beer battle: AB InBev urges SABMiller to accept takeover... Read more

The National Retail Federation expects sales to rise 3.7% this holiday season, less than the 4.1% gain last year, as sluggish U.S. job growth and other economic factors continue to weigh on consumer spending... Read more

Bill Gross sues Pimco for breach of contract... Read more

Etsy's stock on track for a selloff after Amazon launches rival service... Read more

Ferrari Said to Push for $12.4 Billion Valuation in IPO. Ferrari’s coveted status as a maker of cars for the super rich is helping push up its value in an initial public offering to as much as 11 billion euros ($12.4 billion), according to people familiar with the matter... Read more

UK interest rates held at 0.5% after 8-1 Bank vote... Read more

The UK telecoms watchdog has cast doubt on the merger of O2 and Three winning regulatory approval. Ofcom chief executive Sharon White said in a speech in London on Wednesday night that "four operators is a competitive number"... Read more

German police raid Volkswagen HQ... Read more

VW chief: Scandal is 'hard to believe'. Volkswagen's U.S. boss blamed unnamed engineers at the company for the deceptive software that cheated emissions testing, and denied that anyone in senior management made a decision to break the law... Read more

Europe's export powerhouse is stalling. Germany has just experienced its biggest monthly fall in exports in more than six years -- and that was before the Volkswagen scandal broke last month.... Read more

Ex-Deutsche Bank Trader Pleads Guilty in U.S. Libor Case... Read more

Deutsche Bank stock swings after warning of $7 billion loss. Deutsche Bank just warned that it anticipates a multi-billion dollar bust. Germany's largest bank reported that it will take a nearly $7 billion loss in its third quarter for a write down related to its corporate banking unit.... Read more

Sochi forum: Sanctions curbing foreign investment in innovation in Russia. Participants of the recent International Investment Forum in Sochi say that U.S. and EU sanctions on Russia are impeding international investment in innovative start-ups, with foreign companies not aware of what they can do under the new conditions. Meanwhile, according to Russian observers, several new innovative clusters may be created in Russia, including in Soch... Read more

Statoil reports oil spill off Norway coast... Read more

China's versions of Groupon and Yelp have joined forces in a mega tech merger. The startups, Meituan and Dianping, offer online-to-offline services that allow users to make lunch reservations, buy weekly groceries or order takeout from a mobile app. The combined company could be worth $15 billion, according to state media. The merger is even more notable because Meituan and Dianping are backed by two of China's largest tech companies: Alibaba and Tencent... Read more

What the IMF Said About India’s Growth Outlook... Read more

Why the New Trans-Pacific Partnership Could Hurt India’s Competitiveness. This week’s historic trade pact among Pacific Rim countries underlines the degree to which India—despite its efforts to modernize and open up its economy, Asia’s third-largest—has lagged behind its neighbors in lowering commercial barriers... Read more

Indian Court Bars Company from Selling Generic Version of Merck Drug... Read more

Opinion/Analysis - Tom Osegowitsch and Susan Trenholm: Volkswagen fallout shows how not to manage a crisis... Read more

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