ASB Securities Morning Brief for Tuesday, 09 February 2016
Tuesday, 09 February 2016

New Zealand Headlines

New Zealand Market Report: The New Zealand Market was closed in observance of Waitangi Day. On Friday 5 February 2016 the market New Zealand shares rose, led by milk marketer A2 Milk Co and Air New Zealand, although the value of trading continued to be relatively light as volatility in world markets and commodities kept some investors on the sidelines. Hallenstein Glasson dropped after posting weaker first-half profit and most retailers fell. The S&P/NZX 50 Index rose 16.09 points, or 0.3 percent, to 6,153.80. Within the index, 25 stocks gained, 14 fell and 11 were unchanged. Turnover was about $124 million... Read more

New Zealand trading was closed in observance of Waitangi Day. On Friday 5 February 2016 the New Zealand dollar fell from a month-high ahead of employment data in the US that may give investors more clarity on how much time the US Federal Reserve will take to raise interest rates again. The kiwi traded at 66.93 US cents at 5pm in Wellington, from 67.46 cents at the start of the day and from 67.25 cents late yesterday. The currency is heading for a 3.5 percent weekly gain against the greenback... Read more

New Zealanders spent more than $50 billion on credit and debit cards linked to the Paymark system last year, up 5.9 percent on 2014... Read more

Domestic manufacturing sales robust, but weaker exports. The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during January 2016, shows total sales in December 2015 decreased 2.84% (year on year export sales decreased by 10.76% with domestic sales increasing 9.02%) on December 2014... Read more

Domestic manufacturing sales increase but downturn in dairy prices could begin to bite... Read more

New Zealanders have dropped from the fourth to sixth-biggest gamblers in the world and are now losing less than half as much on average as the globe's champion gamblers - Australians. New 2015 data provided to the Herald by London researchers H2 Gambling Capital show that New Zealanders lost $661 for every adult last year, almost five times the global average of $138... Read more

Worry code changes slipping under radar. There is concern that changes to the Code of Professional Conduct for Authorised Financial Advisers, due to take effect this year, may have slipped under the radar for AFAs amid the bigger review of the Financial Advisers Act.... Read more

Hawke's Bay million-dollar property market grows... Read more

High property prices push Waikato sellers to auction. Sellers are taking a punt on a hefty sale price in a property market that has maintained its upward momentum into the New Year. Figures released on February 4 from show prices in Waikato are at a record high of $440,784 - up 6.3 per cent on the high set in December of $414,596.... Read more

TPP high on agenda as Parliament reconvenes... Read more

Fonterra Introduces Market-Linked Price for Organic Milk. The success of Fonterra’s organic business has prompted the Co-operative to introduce an independent organic milk price linked to market returns for organic products.... Read more

Can Hobbit Tourism Save These Troubled Dairy Farmers?... Read more

A virus common in cows nationwide could be costing Southland farmers up to $2.6 million a year. Bovine viral diarrhoea (BVD) is a virus which causes diarrhoea impaired reproductive performance, reduced immune function and mucosal disease in cattle... Read more

Analysts are anticipating solid earnings growth this results season, but warn the sky-high valuations of many companies means stock prices could take a battering if negative surprises are revealed... Read more

The sale of the 139 room Novotel Wellington marks the first major hotel transaction completed this year. Dean Humphries, Colliers International’s National Director of Hotels, the sole advisor for the transaction, says the undisclosed sale price, reflecting a yield around 7.6%, represented both a record yield and price... Read more

Axenic Ltd today announced that it has been accepted as a Partner by the Carnegie Mellon University Software Engineering Institute (SEI). As an SEI Partner, Axenic is licensed to provide official SEI services in Information Security... Read more

Visa doubles down as a technology player with the launch of Visa Developer... Read more

Air New Zealand is investing $25 million in advanced flight technology for its ATR fleet which should reduce weather delays for passengers. The national carrier is partnering with aircraft manufacturer ATR to equip its 68-seat ATR turboprop fleet with Required Navigation Performance (RNP AR) technology... Read more

Cruise industry may plateau after a decade of remarkable growth. The luxury liner business is pumping millions into Kiwi coffers, reports Rob Stock... Read more

Taxpayer money should be put up to help buy an idyllic, privately owned beach at the top of the South Island, Labour says. The 7ha on the Awaroa Inlet north of Motueka is being sold for $2 million. An online campaign has so far raised $1,128,403 through the crowdfunding website Givealittle... Read more

Opinion - Liam Dann: Wall St slump bodes ill for US-led rally. Wall St stocks and oil have slumped again amidst growing talk of recession risk for both the US and the world. In Friday trading (Saturday NZT), the Dow Jones fell 1.3 per cent, the Standard & Poor's 500 1.9 per cent and the Nasdaq 3.3 per cent... Read more

Opinion - Brian Gaynor: KiwiSaver fund choices leave money on the table... Read more

Australian Headlines

Australian Market Report: Local market defies weak leads with gains in materials stocks offsetting dips in the financial sector. The Australian sharemarket has closed flat — defying negative leads from Wall Street — with bargain buying in resource-related stocks offsetting slight declines in other sectors. At the 4.15pm (AEDT) official market close, the benchmark S&P/ASX200 index was down 0.8 points, or 0.02 per cent, at 4975.46, while the broader All Ordinaries index lost 3.5 points, or 0.07 per cent, to 5022.1.... Read more

The Australian dollar has lost ground in quiet trade as China observes a public holiday. At 1700 AEDT on Monday, the local unit was trading at 70.96 US cents, down from 71.82 cents on Friday.... Read more

Employer demand for staff is at a three-and-a-half year high, with more job gains tipped for the months ahead. The number of job ads on the internet and in newspapers rose one per cent in January, retracing a 0.1 per cent decline in December... Read more

Why renters are smiling while landlords are beginning to worry... Read more

Median rent growth at a standstill across Australia as mining bust weighs. Rents have risen in Sydney, Melbourne and Canberra, but not enough to stop slumping markets in Perth and Darwin from slowing growth over the past year to zero... Read more

Perth has recorded its first major commercial property deal for 2016 with Credit Suisse Real Estate Investment Management buying an office building at 190 St George’s Terrace for $64.2 million... Read more

Sharing economy services like Uber, Airbnb need federal regulations.... Read more

Premier says sale of Western Power could become an option if GST push proves fruitless. The West Australian government is running out of options to improve its finances and could sell Western Power if the ongoing push for greater GST revenue proves fruitless, the premier says... Read more

WA Treasurer Mike Nahan has described as "gut-wrenching" another credit rating downgrade for the State's finances, amid fears the government could be forced to sell utility Western Power. Ratings agency Moody’s this morning sliced its rating of WA debt to Aa2 from Aa1, citing falling revenue from resources royalties and the State Government's inability to cut spending... Read more

Agency cuts Western Australia credit rating as China slowdown hits mining state’s revenues. The prolonged mining downturn has pushed global ratings agency Moody’s to downgrade Western Australia’s debt rating, as the state is hit by a slowdown in China... Read more

The non-profit superannuation lobby has accused its bank-owned rivals of opposing new product disclosure "dashboard' rules in a bid to conceal "price-gouging", as new research shows retail funds charge higher fees. A new report produced by independent research house SuperRatings, commissioned by the Australian Institute of Superannuation Trustees, found consumers who select a "Choice" product from a retail provider are paying on average 85 per cent to 300 per cent more in fees than individuals in an equivalent option from a non-profit fund... Read more

NSW members pressure federal Labor to seek wind back of negative gearing, super tax breaks. Federal Labor faces pressure from NSW members of the party to wind back negative gearing and superannuation tax breaks... Read more

Banks and American Express argue changes to card rules planned by the Reserve Bank will reduce competition and merchants say they will be out of pocket because the new definition of surcharge costs will be too narrow... Read more

Queensland mines in battle for survival: QRC... Read more

BHP Billiton expected to cut dividend payouts to investors amid commodity rout... Read more

Consumers are subsidising the unprofitable coal seam gas industry. After all the heartache, trenchant opposition from local communities and a towering $1.8 billion in write-downs, AGL has jettisoned its coal seam gas program. Santos will likely to follow suit and walk away from its controversial Pilliga project. It makes no sense after all. Like Gloucester, Pilliga gas is high-cost to produce and environmentally high-risk to extract... Read more

Pantoro shares eye 12-month high on gold production ramp-up. Shares in Pantoro, (formerly Pacific Niugini), last traded at $0.083, with the gold producer insight of their $0.086 12-month peak reached back in April... Read more

Copper, coal, nickel and iron ore expected to continue wild ride after volatile January. The prices for key mineral and energy commodities fluctuated in January after drops in coal, iron ore and oil, according to ANZ research.... Read more

Asciano backs improved Qube offer. Takeover battle heats up as rival suitor Brookfield also prepares increased bid. Asciano says a sweetened Qube takeover offer has trumped a rival bid from Canada-based Brookfield Infrastructure... Read more

Mount Magnet South to reveal material acquisition... Read more

Shares in Argosy Minerals spiked after the company announced it had secured a two-year option to acquire a lithium project in Tasmania. Lithium is the metal de jour for many investors, with prices for the commodity expected to spike in coming years on growing demand for electric cars and home battery packs... Read more

Newcrest's partner in the Golpu gold mine insists it has the cash to participate.... Read more

Shares in Gold Road were firmer today after the company revealed a strong financial case for the development of its Gruyere gold project east of Laverton. Gold Road shares were up one cent, or 2.5 per cent, to 41 cents at the close after touching an earlier high of 42.5 cents.... Read more

Investors wiped more than $300 million off the market value of OzForex after the money transfer company abandoned takeover talks with global rival Western Union, and slashed its annual earnings guidance. OzForex says it terminated discussions after Western Union failed to submit a binding proposal to buy the company... Read more

Ardiden Limited is preparing to reveal details of an acquisition, with the ASX granting the company a trading halt to prepare. The company had $545,000 in cash at the end of 2015... Read more

Telstra sees potential in energy tech. Clean tech exec Ben Burge to oversee new division. Telstra is creating a new division that will focus on energy efficiency and renewable technologies, both internally at the telco and for the wider market... Read more

Electronics chain JB Hi-Fi has its sights set on a bumper rise in sales as it sets about luring customers from its troubled rivals Dick Smith and Masters. The retailer lifted its full year sales forecast from $3.85 billion to $3.9 billion after unveiling a strong rise in first half profit on Monday. JB Hi-Fi shares fell 12 cents to $22.00.... Read more

Ansell interim profit falls 21%... Read more

First Growth Funds shares halted... Read more

Home builder AV Jennings has lifted its first half profit by 39 per cent and expects demand for new houses to remain robust for some time. The house and land packages group made a net profit of $16.5 million for the six months to December 31 and expects a stronger second half. Shares in the company closed up two cents at 57 cents.... Read more

OzForex sinks 42% after takeover talks end... Read more

Big banks tight lipped as ASIC rate rigging probe intensifies.... Read more

Two charities have been bumped from the national charities register, as the regulator continues to crack down on organisations that are not what they appear to be. The Australian Charities and Not-for-profits Commission (ACNC) has revoked the charitable status of Help Save The Furry Ones and White Ridge Rescue Inc, which are based in South Australia and Victoria respectively... Read more

Opinion - Michelle Grattan: Parkinson has something to prove on tax reform... Read more

Opinion - Ian Verrander: Malcolm Turnbull's post-GST tax options... Read more

International Headlines

U.S. Market Report: Wall Street was deep in the red in volatile trading on Monday, as technology stocks continued to sell off and oil prices remained under pressure, sending investors scurrying to safe-haven assets. The technology-heavy Nasdaq Composite fell nearly 3 percent to its lowest since October 2014, weighed down by Microsoft, Amazon and Facebook, while the Dow Jones industrial average shed more than 350 points.... Read more

North/South Americas Market Report: North and South American markets are broadly lower today with shares in U.S. off the most. The S&P 500 is down 1.81% while Mexico's IPC is off 1.07% and Brazil's Bovespa is lower by 0.56%... Read more

European Market Report: European markets finished sharply lower today with shares in Germany leading the region. The DAX is down 3.30% while France's CAC 40 is off 3.20% and London's FTSE 100 is lower by 2.71%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 1.10% and the Hang Seng rose 0.55%. The Shanghai Composite lost 0.63%... Read more

Yellen to Balance Confidence With Caution in Testimony... Read more

Morgan Stanley is recommending investors stick with long-term Treasuries as traders continue to pare bets on how fast the Federal Reserve can raise interest rates before Chair Janet Yellen gives her semiannual testimony to Congress this week... Read more

2016 could be the year of the sugar tax, as several large nations consider levies on sweetened food and drinks to battle obesity and fatten government coffers. For years, public health advocates have called for such measures as one prong of an attack against a growing obesity epidemic that has fueled rates of heart disease, diabetes and other illnesses, in both the developed and developing worlds... Read more

Technology stocks will tumble further this year as investors flee to safety and buyers stay on the sidelines, according to Scott Minerd, chief investment officer for Guggenheim Partners LLC.... Read more

Lehman Brothers is synonymous with financial catastrophe, but one entrepreneur hopes the brand will make him a fortune -- as a range of Scotch whiskey. James Green, 34, is launching three whiskies with Lehman Brothers on the label. The most popular of the range, "Ashes of Disaster," claims to have a "wicked suggestion of burning banknotes, a hint of ripe autumn fruit about to fall."... Read more

VTech Holdings Ltd. said it agreed to acquire struggling educational toy maker LeapFrog Enterprises Inc. for about $72 million in cash, capping an end to a former powerhouse in the toy industry. LeapFrog, whose electronic learning devices for children were once highly popular, has seen the demand for its offerings crimped by a string of unsuccessful product launches and a competitive landscape... Read more

Shares of Fiat Chrysler fell more than 7% on Monday as an investigation into its vehicles widened. The US National Highway Traffic Safety Administration (NHTSA) doubled its investigation to cover 856,000 Jeeps, but has not requested a recall... Read more

Chesapeake Energy denies bankruptcy rumors... Read more

Natural gas producer Chesapeake Energy has tapped existing adviser Kirkland & Ellis to explore restructuring options, people familiar with the matter told Reuters. The company's shares plunged 51 percent to $1.50 in early trading.... Read more

Apple supplier Imagination Tech warns of loss... Read more

Draghi Boxed In by Unforgiving World Dragging Down Inflation... Read more

Franco-German central bankers call for creation of eurozone treasury. EU must push forward with quantum leap in euro integration as only way to ensure survival of single currency, say Bundesbank and Banque de France chiefs... Read more

Financial market turmoil could blow a hole in Osborne's budget plans, says IFS. Chancellor's 'inflexible' budget surplus rule could come at a high cost, warns IFS, leading to big tax rises or spending cuts... Read more

Chancellor George Osborne's "inflexible" budget surplus target may mean sudden tax rises or spending cuts, independent economists suggest. The Institute for Fiscal Studies (IFS) said that Mr Osborne's pledge to run a budget surplus "in normal times" from 2019-20 was simple but would require a "precarious balancing act"... Read more

Mortgage rates hit nine-year low. But banks are charging borrowers higher fees in a bid to boost their margins... Read more

Npower has become the fourth major UK energy supplier to announce a reduction in its gas price - with a 5.2% cut taking effect on 28 March. The date of the change is likely to bring renewed criticism that prices are cut only towards the end of the coldest months... Read more

Credit Suisse Chief Executive Officer Tidjane Thiam has asked the bank's board to cut his 2015 bonus by between 25 percent and 50 percent, the Financial Times reported on Monday, after the bank posted a 2.94 billion Swiss franc ($2.96 billion) loss last year... Read more

Small businesses taking off in Russia, thanks to the crisis... Read more

Why Rolls-Royce sales are soaring in Russia as other brands slump. Moscow's Land Rover/Jaguar showroom was never crowded, but since in the last two years the pound sterling rocketed from 53 to 115 rubles, the premises have been particularly empty. Yet Rolls-Royce sold 100 cars in Russia in 2015, making it a successful year... Read more

Signs of Japanese slowdown: OECD... Read more

Reserve Bank of India Battles Capital Flight... Read more

India bucks global trend with 7.3% growth... Read more

Growth star India overtakes China as world's fastest growing major economy. GDP growth in India hits 7.3pc at the end of 2015 and will rise to as high as 7.6pc in 2016... Read more

India will struggle to meet high economic expectations. Earlier predictions of bullish economic growth are unlikely to eventuate if India fails to push ahead with vital economic reforms.... Read more

Cash Tide Is Ebbing at India’s Startups... Read more

Facebook's campaign to offer free Internet access to hundreds of millions of people in India has been blocked. India's telecoms regulator ruled Monday that service providers must charge the same price for all content, dealing a crushing blow to "Free Basics," a Facebook initiative that had come under withering criticism from tech activists... Read more

The World Bank says that 2015 economic growth in the Middle East and North Africa likely came to just 2.6 percent, falling short of a 2.8 percent forecast in October as war, terrorism and cheap oil took their toll... Read more

Opinion - Andrew Hammond: Britain faces crossroads in 2016. This will be a crucial year for the future of the UK with an in-out referendum on European Union membership expected in the second half of the year and Scottish elections in May... Read more

Opinion/Analysis - Joseph Stiglitz: What's holding back the world economy? QE and low interest rates have disproportionately created wealth in the financial sector and inflated asset bubbles. It has done little for the real economy. The rules of the market need to be rewritten... Read more

Opinion - Kamal Ahmed: Osborne's big worry - lack of wage growth... Read more

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