ASB Securities Morning Brief for Monday, 02 May 2016
Monday, 02 May 2016

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose after Z Energy gained regulatory approval to acquire rival petrol chains, increasing its market share, while Skellerup Holdings suffered after a profit downgrade. The S&P/NZX 50 Index gained 30.6 points, or 0.5 percent, to 6,820.59. Within the index, 20 stocks rose, 20 fell and nine were unchanged. Turnover was $213.8 million... Read more

The New Zealand dollar extended its gains back toward 70 US cents as weaker US economic growth gave the Federal Reserve less reason to rush to hike interest rates, weighing on the greenback. The kiwi rose to 69.73 US cents as at 5pm in Wellington, from 69.33 cents late yesterday. It was last above 70 cents on April 21. The trade-weighted index rose to 73.31 from 73.14 yesterday... Read more

John Key says a free trade agreement with India is a priority for the Government and that he pushed "pretty hard" on the deal when meeting with President Pranab Mukherjee in Auckland. Speaking after the bi-lateral talks today, Key said the deal would take New Zealand's economic relationship with India to the "next level"... Read more

Air services deal between NZ and India hailed as tourism boost.... Read more

The new Global Impact Visa (GIV), announced today by the Ministry of Immigration, Michael Woodhouse, will be of great value to region's like Nelson. The visa aims to bring in migrant entrepreneurs who have the drive and capabilities to create and support innovation-based ventures in New Zealand and its regions, and provide them with the right support to rapidly operate effectively within the New Zealand business environment... Read more

Prime Minister John Key is signalling an ongoing enthusiasm for the job and is promising a strong Government budget this month.... Read more

The 'top of the South' is a regular competitor for the most sunshine hours in New Zealand each year and Stephen Dickens finds that for investors, rental property offerings look equally as bright. The Nelson, Tasman and Marlborough region is well known for the 'big five' industries of tourism, horticulture, forestry, seafood and pastoral farming. A lot of seasonal workers come and go, particularly in the viticulture and horticulture sectors, and demand for seasonal rental properties is high... Read more

New Zealand residential building consents fell in March, reversing gains February and led by a drop-off in Auckland Wellington and Otago while Canterbury recorded an increase. Seasonally adjusted consents across all dwellings fell 9.8 percent in March from February to 2,236, seasonally adjusted, Statistics New Zealand said. For houses alone, the decline was 4.1 percent to 1,643. On an unadjusted basis, new dwelling consents fell to 2,315 in March from 2,379 in February... Read more

More than 3000 New Zealand beef cattle have been sent to China to boost its breeding programme. The voyage is understood to be the first shipment of beef animals to China. Angus New Zealand president Jo Fouhy​ said angus heifers from throughout New Zealand had gone by ship from Napier, along with several hundred charolais cattle to China... Read more

Zespri is confident grease found on packaging will pose no risk to the health of kiwifruit lovers after 1.7 million trays were put on hold The Mount Maunganui-headquartered group has reassured customers that consumers were safe from kiwifruit still on-hold after an investigation into "potentially affected packaging"... Read more

Australian pet brand Petstock plans aggressive expansion in NZ. One of Australia's leading pet retail companies has crossed the ditch and has plans to grow aggressively. Petstock is a family-owned business with more than 100 stores across Australia and four stores so far in New Zealand.... Read more

Z Energy shares jumped to a record after the Commerce Commission approved its bid to buy rival Caltex and Challenge! petrol station chains, saying price coordination at some stations wasn't enough to turn it down but that regions where Gull stations operate are more competitive... Read more

Shares in Tegel, New Zealand's biggest poultry producer, are widely expected to trade at a premium to the offer price after the company lists on the NZX and Australia's ASX tomorrow. The Auckland-based company's initial public offering, the first on this side of the Tasman in 2016, was given a final price of $1.55 a share through a bookbuild with fund managers and brokers last month. That was the bottom of an indicative range up to $2.50... Read more

Weak prices for wholesale electricity in New Zealand and higher marketing costs saw Tauranga-based integrated energy and telecommunications utility Trustpower's operating earnings fall 1 percent in the year to March 31 in what is likely its last annual result before a proposed demerger. Earnings before interest, tax, depreciation, amortisatioin, fair value movements, asset impairments and discounts on acquisition, the company's proxy for operating earnings, came in 1 percent lower than last year at $329 million... Read more

The world's largest brewer is using Kiwi technology to overcome prohibition-era restrictions and sell more beer in United States bars. Hardware and software developed by Auckland mobile marketing company VMob lets bar owners create "specials" on their smartphones. The promotions can then be displayed as captions that are shown on top of TV sports broadcasts playing in their bars... Read more

The first Queenstown night flights, which will offer passengers more choice, while boosting the Central Otago economy, are set to touch down later this month. The introduction of evening flights are set maximise the airport's current operating hours and reduce peak-time pressure from substantial growth in passenger and traffic volumes... Read more

Finalists Named in First Ever NZ RCSA Awards. Six leading New Zealand companies are among finalists announced in the inaugural New Zealand RCSA Awards for excellence, with one company being named in three separate Award categories... Read more

A new ransomware virus has emerged targeting business computers, reinforcing the danger posed by cyber criminals. The virus reportedly gains access to a computer through a malicious email (see image below). The content of the email is also shown below and it is targeted with the customer name in the subject line. Unlike some viruses, there is no attachment in the message. Rather it asks the user to click a red icon: "Get shipping label."... Read more

A real estate agent has been suspended and fined $10,000 after selling three properties to his niece without disclosing their relationship, then lying to investigators to cover his tracks. Former Barfoot & Thompson agent Yuding (Victor) Li lost his job with the company and was referred by Barfoot management to the Real Estate Agents Authority (REAA) after the offending came to light... Read more

National Urban Maori Authority boss Lance Norman puts the cost of failing a struggling child at $145,000 per year. He says an upfront investment of $28,000 a year in the right programmes can stop children going off the rails... Read more

Opinion - Bernard Hickey: Keep it low and wide. Bernard Hickey points out a 1% land tax on all property owners would now allow a 5.5% cut in personal tax rates or a 10% GST rate. So why won't John Key do another big tax switch? Now that the Prime Minister has let the land tax genie out of the bottle we should all have a good close look at it to see which version suits us best... Read more

Opinion - David Farrar: The need for unity on the right in Auckland.... Read more

Opinion - Brian Taylor: Brian Taylor asks, Can tax be used to stimulate the New Zealand economy?... Read more

Australian Headlines

Australian Market Report: Banks, energy drive stockmarket rally. At the official market close, the benchmark S&P/ASX 200 index had added 26.8 points, or 0.51 per cent, to 5,252.2, while the broader All Ordinaries index rose 26.6 points, or 0.5 per cent, to 5,316.... Read more

The Australian dollar is slightly higher as traders largely wait on the sidelines ahead of the Reserve Bank’s interest rate decision. At 6pm AEST on Friday, the local unit was trading at 76.35 US cents, up from 76.27 cents on Thursday.... Read more

Experts say RBA interest rate decision depends on jobs, property market and inflation... Read more

Solid commodity prices should help the Australian sharemarket stave off the full impact of falls on overseas markets. The local market is predicted to open slightly lower today after mixed economic data and earnings results in the US pulled share markets in the US and Europe lower on Friday... Read more

netwealth and Stanford Brown enter into $1b private label deal. Following an extensive tender process, Sydney-based boutique wealth management firm, Stanford Brown, has entered into a private label agreement with Australia’s largest non-institutional platform provider, netwealth, to provide its clients with managed account portfolios run by its internal investment committee.... Read more

Australian economic policy makers should boost budget spending and wages growth to help the economy rather than to rely on low interest rates, a senior United Nations economist says. Hamza Ali Malik, chief of macroeconomics at the UN's economic and social commission for Asia and the Pacific, (UNESCAP) says Australia should avoid focusing on inflation rates alone in setting interest rates and monetary policy... Read more

Tourism injects almost $48 billion into national and Gold Coast, says Australian Bureau of Statistics.... Read more

The West Australian government doesn't expect any new money in the upcoming federal budget after recently being promised $750 million in commonwealth payments. Prime Minister Malcolm Turnbull earlier this month pledged a one-off $490 million payment to make up for WA's low GST share... Read more

Young children struggling to learn to read should get the help they need earlier with the government's $1.2 billion boost to school funding. The extra funding over three years from 2018 - part of a $73.6 billion education package in Tuesday's federal budget - comes with conditions on the states and territories, including literacy and numeracy checks for children in Year 1... Read more

Treasurer Scott Morrison has confirmed wealthy Australians will pay more tax on their superannuation, as he frames his first budget in the shadow of an election. "We'll be ensuring that we better target the concessions that are there in superannuation, we've said that for some time," Mr Morrison said... Read more

Laneway Resources Ltd has started a 3,000 metres diamond drilling program at the company’s Southern Coromandel Gold Project in the Hauraki goldfield, on the North Island of New Zealand. The Southern Coromandel Gold Project is a joint venture between Laneway and Newcrest Mining Ltd. Newcrest will fund the initial two stages of the program to earn 80% of the project... Read more

The corporate watchdog has banned Black Mountain Resources from raising money without issuing a full prospectus as the fallout from an investigation of the business dealings of former executive director Peter Landau continues... Read more

Breaker Resources NL received binding commitments to raise $500,000 from a share placement along with $500,000 from an underwritten share purchase plan (SPP), to enable further drilling at the company’s Lake Roe Gold Project. The new shares will be issued at $0.13 per share, which represents a 19% discount to the volume weighted average price over the last five days prior to the company’s trading halt on 27 April 2016... Read more

Big miners are offloading coal mines to smaller players at fire sale prices as coal prices languish around five-year lows. However, local communities in the Hunter Valley in New South Wales fear the smaller companies will not have enough money for rehabilitation if their ambitious plans do not succeed... Read more

Chevron expects to restart the $US54 billion Gorgon LNG project within the next few weeks after telling investors overnight that repairs to fix a major mechanical issues on Barrow Island were almost complete... Read more

The Nine Network has severed ties with its long-standing regional partner WIN and is switching to rival broadcaster Southern Cross Austereo from July. In a major blow to WIN, owned by billionaire Bruce Gordon, Nine has signed a five year deal that will see its content shown in regional Queensland, Southern NSW and regional Victoria on channels owned by Southern Cross... Read more

E-commerce player Ensogo Ltd has witnessed monthly business growth averaging more than 100% during Q1 2016, after launching a cross-border marketplace business in January 2016. Ensogo, operating primarily in South East Asia and Hong Kong, increased the number of products available for sale in the company’s marketplace from 77,268 in Q4 2015 to more than 4 million in Q1 2016... Read more

Morrison’s ruling on Kidman & Co sale redefines the national interest test... Read more

Australia's consumer watchdog has issued its first report on the state of play in the NBN wholesale market, revealing TPG is leading the pack in acquiring the highest speed NBN wholesale services. The ACCC has decided to publish quarterly reports on the NBN wholesale market, counting the number of access services for state-based geographies, traffic class, each access network technology, speed tiers, and services per access seeker (the likes of TPG, Telstra, Optus etc)... Read more

Customers owed money following the collapse of six LJ Hooker branches in Melbourne will be able to access compensation, the Victorian Government says. Consumer Affairs Victoria has shut down six LJ Hooker branches and is investigating allegations of missing money belonging to more than 100 customers... Read more

IBAC denounces members of Ultranet 'boys club'. Victoria's corruption watchdog has published its first report into "serious and systemic corruption" at the top of the state’s Department of Education, implicating many of the central players who stand accused of manipulating the $180 million Ultranet project... Read more

A proposal to extend NSW’s controversial lockout laws across the state are among hundreds of suggestions submitted to a government review. “The measures have been proven to work in the greater Sydney CBD, so it is important other communities can now benefit from the decrease in alcohol-fuelled violence,” a submission from the Last Drinks Coalition says... Read more

Opinion - Dominic Knight: Game of homes: Housing looks like child's play but it's not... Read more

Analysis - Donna Weeks: How has Japan reacted to its failed bid to build Australia’s new submarines?... Read more

Opinion - Michael Janda: Is Morrison right about 'mums and dads' and negative gearing?... Read more

Opinion - Barrie Cassidy: The paradox of Turnbull and the budget. Nothing about this time in politics makes much sense. We have a budget that could not be more politically important, but no one wants to sell it. And we've got a Prime Minister who loves the grey when everything we know about elections calls for black and white. Barrie Cassidy writes... Read more

International Headlines

U.S. Market Report: Earnings beats this season have been cheapened, with lower-than-usual expectations making for little fanfare with investors when companies top the Wall Street consensus. Stocks finished with a weekly loss Friday as the Dow Jones Industrial Average DJIA, -0.32% and the S&P 500 index SPX, -0.51% failed to produce a third straight week of gains, with both the Dow and the S&P 500 declining 1.3%. The Nasdaq Composite Index COMP, -0.62% turned in its second week of losses, shedding 2.7%. The Dow and the S&P both held on to monthly gains... Read more

North/South Americas Market Report: North and South American markets finished mixed as of the most recent closing prices. The IPC gained 0.56%, while the Bovespa led the S&P 500 lower. They fell 0.74% and 0.51% respectively... Read more

European Market Report: European markets finished sharply lower on Friday with shares in France leading the region. The CAC 40 is down 2.82% while Germany's DAX is off 2.73% and London's FTSE 100 is lower by 1.27%... Read more

Asian Market Report: Asian markets finished broadly lower on Friday with shares in Japan leading the region. The Nikkei 225 is down 3.61% while Hong Kong's Hang Seng is off 1.50% and China's Shanghai Composite is lower by 0.25%... Read more

IEA chief says oil price bottoming depends on global growth... Read more

A Facebook Inc shareholder filed a proposed class action lawsuit on Friday in a bid to stop the company's plan to issue new Class C stock, calling the move an unfair deal to entrench Chief Executive Mark Zuckerberg as controlling shareholder. The lawsuit, filed in the Delaware Court of Chancery, followed the social networking company's announcement on Wednesday of its plan to issue the shares... Read more

Yahoo CEO Marissa Mayer stands to make $55 million if the struggling company gets sold -- and she gets booted. The company revealed Mayer's severance package and her 2015 pay when it updated its annual report on Friday evening. Mayer's golden parachute would be a huge payout for a chief executive who hasn't been able to stop the technology behemoth's free fall. In 2015, the value of her company's stock fell by 33%... Read more

Billionaire activist investor Carl Icahn has sold all his shares in Apple over concerns about the technology firm's prospects in China. "We no longer have a position with Apple," he told CNBC. Reports say Mr Icahn made $2bn (£1.4bn) from selling his stake in Apple. At one point last year, he owned 53 million shares worth $6.5bn... Read more

Buffett says Berkshire 'fine' with Trump or Clinton... Read more

Dozens of Berkshire Hathaway Inc. subsidiaries will be showing off their products Saturday as Chief Executive Officer Warren Buffett hosts the company’s annual meeting in Omaha, Nebraska. Below are some numbers highlighting the scope of the company and its units.... Read more

Buffett Says Hedge Funds Get ‘Unbelievable’ Fees for Bad Results... Read more

Mike Ashley: I'll save BHS and all its staff... Read more

Former BHS owner Sir Philip Green has been invited to appear before two parliamentary committees to answer questions about the High Street chain's collapse into administration. Sir Philip owned BHS - which went into administration on Monday - for 15 years before selling it for £1 in 2015. The work and pensions and business committees have asked to question him... Read more

Cheap drinks and tobacco could make a comeback on to flights if Britain votes for Brexit – but any perks may be wiped out by increased costs and red tape weighing on air travellers. An analysis by KPMG of the likely impact on air travel of Britain leaving the EU highlights that the UK government may bring back duty-free on travel within Europe – which was abolished in 1999 – but warns of the potential for greater downsides... Read more

UK consumers using their mobile phones in Europe will see reductions in their bills from Saturday. Further caps are coming into effect on roaming - or connection - charges within all 28 countries of the European Union (EU). From June next year, roaming charges in the EU will be abolished completely... Read more

Nicola Sturgeon has said no deals will be done with a Chinese consortium if legitimate concerns about the firms involved are uncovered. The SNP leader signed a memorandum of understanding potentially worth £10bn last month. The Herald newspaper said China Railway Group Limited (CRG) and subsidiaries were named in an Amnesty International report on human rights abuses... Read more

Germany's finance minister Wolfgang Schaeuble has criticized the executive board of scandal-ridden carmaker Volkswagen for not waiving bonuses despite bringing the company to the brink of collapse. "I have no sympathy for managers who first drive a large blue chip-listed company into an existence-threatening crisis and then defend their own bonuses in a public debate," Schaeuble told German weekly Frankfurter Allgemeine Sonntagszeitung... Read more

Venezuelans lost half an hour of sleep on Sunday when their clocks moved forward to save power, as the country grapples with a deep economic crisis. The time change was ordered by President Nicolas Maduro as part of a package of measures to cope with a severe electricity shortage... Read more

NantKwest Inc., a cancer-research firm that went public last year, gave Chief Executive Officer Patrick Soon-Shiong a $147.6 million pay package for 2015, the highest reported by any company so far. Soon-Shiong’s compensation exceeds that granted Google Inc. CEO Sundar Pichai, who received $100.5 million last year to run the search-engine unit of parent Alphabet Inc... Read more

With new data suggesting that China’s economy stabilized in April amid a property recovery and credit surge, analysts say there is little need for stepped-up monetary easing in the immediate future. China’s official factory gauge, the manufacturing purchasing managers index, stood at 50.1 in April, the nation’s statistics agency said Sunday. That is the second consecutive month the indicator has moved above 50, which indicates improving conditions... Read more

Malaysia’s 10-year government bonds completed the biggest weekly drop in almost three months as a debt default by a state investment company damped demand for the nation’s assets. The country’s currency also weakened as 1Malaysia Development Bhd. missed an interest payment on a $1.75 billion bond, triggering cross-defaults on 7.4 billion ringgit ($1.9 billion) of the company’s debt, including borrowings that are guaranteed by the sovereign... Read more

Facebook Receives Highest-Ever Number of Requests for Indian User Data. Officials made 5,561 requests for data on users' accounts in India in final 6 months of last year... Read more

India’s top court extended a ban on registration of new large diesel-powered vehicles in New Delhi to curb pollution, dealing a blow to automakers such as Daimler AG’s Mercedes-Benz and Toyota Motor Corp.... Read more

India Asks U.K. to Deport Vijay Mallya. Indian authorities are investigating whether Mr. Mallya diverted funds from Kingfisher Airlines... Read more

Hackers May Pocket About $70 Million in Bangladesh Cyber Heist... Read more

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