ASB Securities Morning Brief for Friday, 27 November 2015
Friday, 27 November 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares were mixed, with the NZX 50 Index gaining but more shares down than up. Fletcher Building and Spark New Zealand joined an Asia-wide rally, while Xero fell after founder Rod Drury trimmed his stake. The S&P/NZX 50 rose 18.76 points, or 0.3 percent, to 6087.9. Within the index, 20 stocks rose, 21 fell and 9 were unchanged. Turnover was $220 million... Read more

The New Zealand dollar gained against its trans-Tasman counterpart after figures showed Australian mining investment slumped in the third quarter, reigniting speculation the central bank may have to cut interest rates again. The kiwi rose to 90.96 Australian cents from 90.57 cents immediately before the release, and 90.38 cents yesterday. The local currency was little changed at 65.86 US cents at 5pm in Wellington from 65.70 cents at 8am and 65.78 cents yesterday... Read more

China pipped Australia to become New Zealand's top annual export destination in October, as increased sales of beef, milk powder and kiwifruit to Asia's largest economy contrasted with a decline in crude oil sales to Australia... Read more

Black Friday mania is set to hit New Zealand shores tomorrow, but it's unlikely the huge shopping event will out-do Boxing Day as the nation's most popular day to nab a bargain... Read more

A new levy on international visitors to pay for the growing costs of border control is inefficient, could deter up to 34,000 tourists from coming here each year, and dampen economic growth, the NZ Institute of Economic Research says. The border clearance levy due to be introduced from January 1 is $21.57 for air travellers and those arriving and departing on private boat, and $26.22 for cruise ship passengers... Read more

The government has formally hauled down the flag on its attempts to alter the balance of environmental and economic priorities in the Resource Management Act, unveiling a 180 page Resource Legislation Amendment Bill containing reforms that have enough political support to become law.... Read more

Big drop in investor lending. New tax and loan-to-value (LVR) ratios seem to have significantly dented bank lending to investors.... Read more

Lack of clarity reigns over the number of houses actually built under Auckland’s Housing Accord. Thanks to the Housing Accord which speeds up the consent process and established Special Housing Areas (SHAs), progress is being made in addressing Auckland’s housing shortage – according to the Government and the Council... Read more

Minister to take back inquiry appointment powers for EEZ applications. Environmental law reforms announced today include bringing the relatively new regime governing resource consents in New Zealand's vast offshore exclusive economic zone into line with Resource Management Act processes that apply on land and out to the 12-mile nautical limit... Read more

Resource Management Act (RMA) reforms won’t put an end to Auckland’s housing crisis.... Read more

Hawke’s Bay financial planning firm wins national KiwiSaver award for seventh consecutive year and also scoops Advisers Institute award... Read more

Energy Mad, the unprofitable lightbulb maker which counts NZX's SuperLife as its biggest shareholder, almost halved its first-half loss, after slashing staff costs and winding back sales commissions and other external fees. The net loss narrowed to $656,000, or 1 cent per share, in the six months ended Sept. 30, from a loss of $1.2 million, or 3 cents, a year earlier, the Christchurch-based company said in a statement... Read more

Dairy supply down as farmers react. Low product prices and bad weather have taken a toll on milk production. According to data from the Dairy Companies Association of NZ, national production fell 2.7 per cent in the peak producing month of October.... Read more

Former Fonterra director Ralph Norris spells out reasons for his departure... Read more

New Zealand dairy is well placed to compete in the global market as prices begin to recover in the coming 12 months, a visiting global dairy specialist has told localproducers... Read more

Mixed Wool Market... Read more

There is tentative support for the Ministry of Business, Innovation and Employment’s options paper, which will guide the Financial Advisers Act review. The paper outlines three packages of potential changes... Read more

Arvida Group, which operates 21 retirement villages and aged care facilities, posted first-half profit of about $7.4 million, putting it on track to meet its prospectus forecast for full-year earnings. Arvida will pay a second-quarter dividend of 1.05 cents a share, imputed to 0.35 cents, on Dec. 21, with a record date of Dec. 10.... Read more

AFT Pharmaceuticals, the Auckland-based company whose products include Maxigesic pain medication and Maxiclear PE nasal decongestant, plans to list on the NZX and ASX next month after it has raised $33.2 million in an initial public offering... Read more

Xero founder Rod Drury and directors Craig Winkler and Sam Morgan sold shares on market in a multi-million dollar payday, taking advantage of a 35 percent rally in the stock this year... Read more

Scott Technology shareholders overwhelmingly backed a deal handing control of the robotics manufacturer to Brazilian meat processor JBS. Some 97 percent of voting shares were in favour of a scheme of arrangement between Scott and JBS Australia which will give the Brazilian company's subsidiary 50.1 percent ownership, buying 10 million shares at $1.39 apiece... Read more

20 more Pumpkin Patch stores to close.... Read more

Pumpkin Patch affirms guidance for weaker 2016 earnings, shares drop.... Read more

Utilities software developer Gentrack Group’s full-year results were mainly in line with its 2014 prospectus, although revenue was below forecast. Revenue grew 9.2% for the year ended September 30 to $42.1 million, although project delays and delivery challenges meant it was $2.6 million below prospectus forecast... Read more

Ruataniwha promoter seeks mix of equity, debt funding... Read more

American-headquartered Reading Entertainment this week opened the new eight-screen LynnMall multiplex and its Australian boss vowed further expansion, naming Ponsonby as a desirable location... Read more

Wilson Parking profit doubles as security, parking revenue climbs... Read more

Things were looking up for Intueri Education Group shareholders at the start of this month. On November 6 this column noted a 40 per cent gain in the stock since October 22, to $1.51, partly propelled the private training provider into reiterating, at an investor open day, that it was on track meet full-year earnings guidance. But things went abruptly south on Monday when Intueri revealed that regulatory review of two of its schools could impact funding and wipe up to $5 million off full-year earnings.... Read more

AIG Announce Richie McCaw as Global Ambassador... Read more

The Shareholders' Association has handed out its 2015 Beacon Award for outstanding leadership to Tony Carter, chairman of Air New Zealand and Fisher & Paykel Healthcare. Association chairman John Hawkins said Mr Carter was a remarkable leader, strategist and motivator, yet retained a down to earth manner, and was never afraid to seek a range of views including from the association... Read more

A secret report into taxpayer subsidies to encourage research and development spending found the rules governing the scheme were "ambiguous" and "contradict the purpose".... Read more

Hayden Duncan, former CEO for Harcourts, New Zealand’s largest real estate group, is to lead the company’s expansion into Canada. Mr Duncan, who left his role as Harcourts NZ CEO at the end of October, will move to Canada early in 2016 to take up the role of CEO of Harcourts Canada, with the aim of establishing a network of Harcourts franchises in the North American country... Read more

Auckland DHB boss' $60k+ pay rise. Auckland District Health Board chief executive Ailsa Claire's total pay package increased in a year by more than $60,000, or 10.3 per cent, according to data published today by the State Services Commission. But the DHB says the real increase is much smaller - "just below 1.5 per cent" - because of changes in the proportion of at-risk/performance pay in her total remuneration in 2014/15 and because she received this part of her pay in the financial year after it was earned... Read more

The country's peak business lobby group, Business New Zealand, is preparing to announce a replacement for long-serving executive director Phil O'Reilly, with speculation the current head of the New Zealand Bankers' Association, Kirk Hope, will be named for the role... Read more

Women in the public service are paid 14 percent on average less than men, which is 2.2 percent worse than New Zealand’s overall gender pay gap, the State Services Commission annual breakdown shows... Read more

Homeowners who suffered up to three days without power during a huge blackout will be compensated $50 each - but some are still angry. The October 2014 outage cut power to more than 75,000 Auckland homes, hit businesses with huge economic losses and brought parts of the city to its knees... Read more

A South Island vineyard owner, patron of the arts, and former casino boss is being sued for $3.5 million by two wealthy Las Vegas executives. Glenn Schaeffer owns Nelson's Mahana Estates and earlier this month hosted Prince Charles and his wife Camilla at the winery... Read more

The only person convicted of the Megaupload copyright charges over which Kim Dotcom is facing extradition has walked free from prison in the United States - but has a $266 million debt hanging over his head. Andrus Nomm was sentenced to a federal prison in the US in February this year after cutting a plea bargain deal with the FBI over his role in the Megaupload operation... Read more

iPredict closing down due to money laundering risk... Read more

Opinion/Analysis - Brokers view: Positivity may be returning for Kathmandu... Read more

Opinion - David Hargreaves: As a city Auckland will have to embrace philosophical and structural change if it is to overcome its current growing pains... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket has pared some of yesterday’s losses, with rises in bank and healthcare stocks more than offsetting declines in the materials space. At the 4.15pm (AEDT) official market close, the benchmark S&P/ASX200 index was up 17 points, or 0.33 per cent, at 5210.7, while the broader All Ordinaries index gained 14.5 points, or 0.28 per cent, to 5259.7.... Read more

The Australian dollar is lower on the back of weaker commodity prices and the release of disappointing capital expenditure figures. At noon (AEDT), the local unit was trading at US72.26 cents, down from 72.72 cents yesterday... Read more

netwealth celebrates $8bn FUM milestone. Australia’s largest non-institutional platform provider, netwealth, has exceeded $8 billion in funds under management, following strong inflows and continued growth across the IFA, private client and wealth management sectors... Read more

Australian business investment spending has yet to show any meaningful recovery from its recessionary levels, with capital expenditure falling 20 per cent over the year and another 9.2 per cent in the September quarter. It is the largest quarterly decline on record and the fifth quarter in succession where investment has fallen... Read more

Business investment is collapsing at a record pace as resource companies accelerate cutbacks amid slides in coal, iron ore and gas prices. New capital expenditure figures released on Thursday show investment collapsed 9.2 per cent in the September quarter – the biggest quarterly slide since records began almost 30 years ago. The 9.2 per cent slide eclipses those recorded during the early-1990s recession and the global financial crisis... Read more

Creating economic agility has been the Turnbull government's holy grail. Yet an Australian academies forum has found the job is made harder by a "piecemeal, opportunistic and almost invariably short-lived" innovation policy framework... Read more

The price of iron ore has held at a 10-year low as hopes for the regular late-year bounce appear optimistic. At the end of the latest session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US43.40 a tonne, in line with its prior close... Read more

Hong King-listed miner MMG has confirmed it will seek a secondary listing on the Australian exchange, saying it expects its shares to begin trading on the local bourse by December 14... Read more

Oilex Limited has been granted a trading halt this morning by the ASX, with its shares placed in pre-open... Read more

Mine rehabilitation funds unchanged by GST removal, Queensland Resources Council says... Read more

Gold-explorer Bligh Resources is preparing to reveal details of a significant capital raising, with the ASX granting the company a trading halt to prepare... Read more

Exploration company MinRex Resources has launched its prospectus to raise up to A$ 7 million as part of a transition into the real estate industry... Read more

The United Nations human rights agency has found mud from the Samarco tailings dam collapse in Brazil is toxic and the government and corporate responses to the disaster were "clearly insufficient". The UN's Office of the High Commissioner for Human Rights said new evidence showed the dam wall collapse in the Minas Gerais province "released 50 million tonnes of iron ore waste, which contained high levels of toxic heavy metals and other toxic chemicals in the river Doce."... Read more

BHP Billiton at odds with United Nations over Samarco toxicity claim... Read more

Western Australian focussed gold explorer Kin Mining has been granted a trading halt by the ASX this morning, with its shares placed in pre-open... Read more

Oro Verde to divulge material joint venture... Read more

ACCC cool on Asciano deal... Read more

Roy Hill accuses Samsung of delay... Read more

Gordons Cairns makes right noises on Woolworths, but time is running out... Read more

Maybe it was the 40-degree heat. A colourful cast of Woolworths shareholders ripped into the company’s senior executives about everything from the ‘Masters disaster’ and the failure to tackle Aldi to the reliance on pokie-machine revenue and the awful ‘Cheap Cheap’ advertising campaign at a rowdy annual general meeting in Sydney on Thursday afternoon... Read more

Shares in troubled law firm Slater & Gordon have slumped more than 50 per cent to their lowest level on record after the company warned that UK government proposals could restrict the right of people injured in road traffic accidents to obtain compensation... Read more

The proposed buyer of Tasmanian dairy giant Van Diemen's Land Company (VDL) is Moon Lake Investments, an Australian company set up specifically for the purchase by Chinese businessman Lu Xianfeng. It was announced last week that an unnamed foreign, privately owned company had made the $280 million bid for Australia's largest and oldest dairy farming company and paid a $20 million non-refundable deposit... Read more

Apartment developer Finbar says it has reached practical completion of its $75.6 million Arbor North joint venture complex at The Springs precinct in Rivervale. The company said the 154-apartment project had been completed on time and budget... Read more

Homeland security provider XTEK has drawn down $250,000 under a $10 million funding facility struck with Kentgrove Capital in July 2015. At XTEK's behest, it can determine whether or not it will request a subscription from Kentgrove Capital, and the placement amount between $100,000 and $500,000... Read more

China Waste Corporation has been granted a trading halt by the ASX pending details of a joint venture with China's national scientific research organisation... Read more

The Insurance Commission of Western Australia says it is still reviewing offers for Perth CBD office portfolio after selling two suburban shopping centres to the listed Vicinity Centres for $319 million. ICWA chief executive Rod Whithear said Vicinity’s offer was “highly competitive” and best addressed the commission’s sale objectives... Read more

Freight Link residents need certainty. Residents potentially affected by the contentious Perth Freight Link project deserve certainty sooner rather than later, Finance Minister Mathias Cormann says... Read more

Telstra chief executive Andy Penn has urged Australian investors to become less risk averse, flagging the possible use of the $2 trillion saved in superannuation funds to help Australian start-ups... Read more

Telstra to cut 150 jobs from enterprise services group... Read more

Gender pay equality in Australian workplaces has barely improved in the past year, with women earning an average $27,000 less than men and dominating the part-time employment market. Data from the Workplace Gender Equality Agency's annual report shows that full-time female employees took home a base salary 19.1 per cent less than men last financial year - or an average $17,423 less... Read more

Troubled private training provider Vocation has been placed into voluntary administration. The ABC understands existing students can continue their courses but the company will stop taking new students until it assesses its options... Read more

Thousands of Australian Volkswagen car owners file for compensation in court... Read more

Opinion - Paul Budde: Turnbull's NBN more pain than gain. The National Broadband Network’s convoluted journey to completion has hit another pothole and this time it’s the poor condition of the Optus HFC network that’s the culprit... Read more

International Headlines

When do U.S. markets close during Thanksgiving week?... Read more

North/South Americas Market Report: North and South American markets are mixed on Wednesday. The Bovespa is up 0.13% while the IPC gains 0.05%. The S&P 500 is off 0.01%... Read more

European Market Report: European markets finished broadly higher today with shares in Germany leading the region. The DAX is up 1.35% while France's CAC 40 is up 1.08% and London's FTSE 100 is up 0.88%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 0.49%, while the Shanghai Composite led the Hang Seng lower. They fell 0.34% and 0.04% respectively... Read more

Cyber-thieves are preparing malware and spam campaigns in a bid to catch out retailers and shoppers during the run-up to Christmas, experts say. One gang had updated the sophisticated malware it used to target tills in stores, security company iSight said... Read more

American Airlines won't accept Argentina's money. The airline announced that it will no longer allow customers to pay for flights with Argentine pesos... Read more

Tesco will pay $12m (£8m) to settle legal action by US shareholders which claimed that accounting irregularities inflated the supermarket's share price. The lawsuit alleged that Tesco's overstatement of its profits guidance, revealed last year, breached certain US securities laws... Read more

Iran offers huge economic potential. Can it deliver? It's been described as the Germany of the Middle East, with nearly 80 million people, an educated workforce, and a proud tradition of manufacturing. Throw in the world's largest oil and gas reserves, and it's easy to see why investors and international companies are getting very excited about Iran.... Read more

President Dilma Rousseff’s austerity program to fix Brazil's shaky finances is again in trouble after her point man in the Senate was arrested in a widening corruption scandal, and it could reignite calls for her impeachment. "The arrest felt like a nuclear bomb here in the presidential palace," said a Rousseff aide who asked for anonymity. "Unfortunately the political crisis deepens further and complicates our agenda in Congress."... Read more

CEO of Brazil's largest investment bank arrested... Read more

Private sector loans expanding in EU The volume of loans to the private sector in the euro area expanded in October, with a bigger bounce recorded than the previous month, ECB data show. The data are for the European Central Bank a key indicator of economic health, as borrowing is a main source for corporate investment which in turn should boost the eurozone's currently weak economy... Read more

Paris is suffering a huge drop in tourism following the deadly attacks two weeks ago. The number of tourists who canceled their trips to Paris in the week following the attacks jumped up 21% compared to cancellations during the same week last year. New bookings dropped by 27%, data from travel data company ForwardKeys showed. Bookings for Christmas are down 13% compared to the same period last year... Read more

UK retailers are gearing up for the Black Friday shopping phenomenon with analysts predicting record sales. Consultants Experian and online retail group IMRG are predicting online purchases will hit £1.07bn, the first time they have passed £1bn in one day... Read more

Spain's economy expands at post-crisis high. Spain's economy grew in the third quarter at the fastest annual rate since the 2008 financial crisis, official data showed Thursday... Read more

UK watchdog fines Barclays $150m... Read more

Britain hikes taxes on investors to cool housing market. Governments don't usually hike taxes and get cheers for it. But Britain's decision to levy a higher rate of tax on investors in its red hot housing market will be welcomed by many. Finance minister George Osborne said Wednesday people buying a second home, or a home for rental income, will have to pay an extra 3% of the purchase price in tax.... Read more

"Very significant" government spending cuts will still be imposed before the next general election, an influential think tank has warned. Paul Johnson, director of the Institute for Fiscal Studies, said that George Osborne's Spending Review on Wednesday was "not the end of austerity".... Read more

Russian gas supplies to Ukraine stop because prepayments ended... Read more

Russia seeks economic revenge against Turkey over jet... Read more

4 reasons Russia and Turkey can't afford a trade war... Read more

The World Bank wants to raise $16bn to help Africa adapt to climate change. By boosting the continent's resilience to global warming and increasing renewable energy it hopes the scheme will prevent millions of people from sliding into extreme poverty. The Africa Climate Business Plan will be presented at COP21, the global climate talks in Paris... Read more

The publisher of Hong Kong's South China Morning Post (SCMP) has confirmed that it is in talks to sell the popular English-language newspaper. In a filing to the Hong Kong Stock Exchange, the SCMP Group said it has received a "preliminary approach" from a third party to purchase its media assets, including the newspaper... Read more

Singapore adding millionaires faster than Hong Kong... Read more

The Philippine economy grew 6% year-on-year in the three months to September, slightly below forecasts but still leaving it on track to be one of Asia's fastest growing economies this year. Arsenio Balisacan, the country's economic planning secretary, said the numbers were an encouraging sign of a steadily growing economy... Read more

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