ASB Securities Morning Brief for Wednesday, 25 March 2015
Wednesday, 25 March 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares fell, led by Kathmandu Holdings as it posted a first-half loss. Spark New Zealand and Fisher & Paykel Healthcare Corp paced the decline. The NZX 50 Index fell 4.688 points, or 0.1 percent, to 5870.539. Within the index, 18 stocks fell, 26 rose and six were unchanged. Turnover was $121 million... Read more

The New Zealand dollar fell broadly after data showed weaker-than-expected manufacturing in the nation's No. 2 market of China, having reached new record highs against the Australian dollar and the euro, and a two-month high versus the greenback. The kiwi traded at 97.21 Australian cents at 5pm in Wellington, having hit a post-float high of 97.82 overnight, from 97.17 cents yesterday. The local currency traded at 76.30 US cents, down from a two-month high 76.63 cents overnight and from 75.89 cents yesterday... Read more

English says NZ$ highs vs A$ and Euro good but consumers, but headwinds for exporters; won't comment on if RBNZ should cut OCR... Read more

John Key is set for discussions with Japanese Prime Minister Shinzo Abe about getting the Trans-Pacific Partnership sealed.... Read more

National will push ahead with its attempts to reform the Resource Management Act even if the party is defeated in the Northland by-election. However the minister sponsoring the changes concedes a loss on Saturday will complicate matters and force further negotiations with the party's support partners... Read more

Kiwifruit growers give mandate, total grower control still some way off. Interim results show more than 90 percent of New Zealand kiwifruit growers support a new blueprint for the industry though one grower, who this month raised concerns about a Zespri junket for international visitors, claims it doesn’t fix the problem it set out to solve... Read more

DMS in support of KISP referendum. Post-harvest kiwifruit operators and orchard managers DMS are welcoming the announcement today of the interim results of the Kiwifruit Industry Strategy Project (KISP) referendum, which spells out the future of the industry... Read more

Zespri kiwifruit's million dollar golden-handshake stirs controversy... Read more

Pacific Islands Trade & Invest supports Solomon Islands Timber delegation seeking opportunities in Australia and New Zealand... Read more

US fund manager BlackRock, which manages more than US$4.7 trillion in assets worldwide, has built up a 5 percent stake in Fletcher Building. Shares of Fletcher last traded at $8.85 and have gained some 6.6 percent since the start of the year. The stock is rated an average of 'hold' according to 10 analysts surveyed by Reuters, with a median price target of $8.80... Read more

Kathmandu Holdings' first-half result is being described by analysts as disappointing but expected, after the outdoor retailer posted a net loss of $1.8 million. The company had forecast a loss of between $1 million and $2 million, compared with $11.4 million profit the previous year... Read more

Kathmandu Holdings, which operates 157 outdoor clothing and equipment outlets, is pulling back the pace of new store openings after aggressive price discounting slashed its margin in Australia and resulted in a first half loss. Kathmandu's shares fell 1.2 percent to $1.59 and have dropped 25 percent so far this year. The stock is rated a 'buy' according to analyst recommendations compiled by Reuters... Read more

Mad Group, operator of the Habitual Fix and Mad Mex fast-food chains, is gearing up for an equity crowdfunding campaign aimed at raising as much as $1.5 million in growth capital. Group managing director James Tucker said the offer, being made through the Snowball Effect platform, was expected to open within the next fortnight... Read more

Hamish Bohannan has resigned from Bathurst Resources after five years leading a coal miner whose expansion has been put on hold pending a recovery in coal prices... Read more

CallPlus unperturbed by big boys' market share. There is no advantage for most people in buying their home phone and broadband service from a mobile phone company, says the country's third-largest internet provider, CallPlus. 2degrees' purchase of internet provider Snap for a reported $26 million on Tuesday means the three mobile network operators, Spark, Vodafone and 2degrees, now control more than 80 per cent of the home broadband market... Read more

Spark chief executive Simon Moutter has taken a swipe at new competitor Netflix, saying the TV streaming company is taking advantage of GST loopholes to avoid paying tax, but a New Zealand tech company executive says it's a two-way street... Read more

Netflix ANZ has one eighth the titles of Netflix US. Netflix launched in Australia and New Zealand at midnight.... Read more

Mighty River Power will close Southdown station at the end of 2015... Read more

Brazilian jet maker targets NZ routes. Embraer says its aircraft for 80 to 130-plus passengers a good fit with NZ secondary holiday airports... Read more

Scrap over zoning of land on Waiheke. Waiheke's biggest landowner is challenging zoning classifications on parts of its holdings on the island's eastern tip in the Stony Batter Historic Reserve war fortifications vicinity... Read more

Tourism battling 'war zone'. Visitors to Christchurch all too regularly make comments that the city "still looks like a war zone," and "there are no people around, where have the business and office workers gone?" Christchurch & Canterbury Tourism boss Tim Hunter says... Read more

Christchurch convention organisers say they are winning a significant number of business tourism events. But the city's share of the national market will remain flat until a couple of big projects reinvigorate the quake-hit city, they add... Read more

AMP been granted a DIMS licence and says it was essential to go down this route, although it is unlikely to make any extra profit from offering the service to advisers... Read more

FMA takes AML action. Concerns about compliance with the anti-money laundering legislation have driven the Financial Markets Authority to issue warnings to a number of the businesses that report to it.... Read more

Workers in limbo as bosses earn more. Unions say pay increases are overdue as worker anger rises at growing salary gap.... Read more

A Wellington charity that employs dozens of people with mental health problems has been forced into voluntary liquidation after a District Health Board withdrew funding. The Mana Recovery Trust in Porirua, which runs second-hand store Trash Palace, told its 35 employees on Tuesday night it would cease operating next month... Read more

Cotton On Group will maintain paid tea breaks... Read more

The Commerce Commission has found Wilson Parking New Zealand’s 2013 acquisition of a rival’s parking assets hasn't substantially crimped competition and deemed that public transport will keep a lid on any price hikes... Read more

A real estate agent who left a vendor liable for a second commission while pocketing a $47,500 fee from a buyer has been found guilty of misconduct. Ian Morgan denied the charges but the Real Estate Agents Disciplinary Tribunal found the Matamata agent acted with serious negligence when he took the fee without the knowledge of his employer while the farm in question was still part of an agency listing with PGG Wrightson Real Estate... Read more

An Auckland man has appeared in the Auckland District Court charged with trying to bribe an Auckland Council resource consent officer. Johnson Yuejun Li was charged with bribery and corruption by the Serious Fraud Office over his November application to subdivide a Hillsborough property... Read more

Opinion - Simon Moutter: Netflix has immediate advantage by avoiding GST. Spark's Simon Moutter says rival Netlix enjoys an unfair tax advantage and should have to make an equal contribution to New Zealand society... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket closed higher, crawling slowly towards the key 6,000 threshold as resources stocks rose after a rebound in copper and oil prices. At the 4.15pm (AEDT) official market close, the benchmark S&P/ASX200 index had added 13 points, or 0.22 per cent, to 5,969.1, while the broader All Ordinaries index lifted 13.5 points, or 0.23 per cent, to 5,934.5.... Read more

The Australian dollar briefly pushed past US79c for the first time in almost a month, helped by rising commodity prices and expectations of good Chinese economic data. The Australian dollar was worth US78.60c at 4.10pm, up from US78.10c yesterday. During the morning it peaked at US79.03c, its highest level since February 26... Read more

Lump sum superannuation payments for retirees could end. Australians entering retirement will most likely be stopped from taking their superannuation as a lump sum and will have to access it through a structured self-funded pension, a top Treasury official says... Read more

Deal of the century: Australia borrows $4b for 20 years at 2.865 per cent... Read more

Australian households benefitted from a rare recent jump in living standards last quarter as the cost of living remained unchanged. Analysis by the National Centre for Economic and Social Modelling (NATSEM) and SAS shows that Australians' average standard of living rose 0.7 per cent in the December quarter and 1.2 per cent over the past year... Read more

A new report investigating the economic contribution of science has found that physics, chemistry and maths directly add $145 billion to the Australian economy every year. The report, commissioned by the Office of the Chief Scientist and the Australian Academy of Science, was produced by the Centre for International Economics... Read more

Mount Magnet South has been granted an ASX trading halt in relation to the sale of a material asset... Read more

Bandanna Energy administrators appoint adviser... Read more

Fortunis Resources has been granted an ASX trading halt in relation to a material acquisition transaction.... Read more

Fortescue Metals Group may have to sell a stake in its iron ore mines or rail infrastructure as it looks to pay down debt after abandoning a $US2.5 billion refinancing. The Pilbara iron ore miner recently abandoned plans to refinance $US2.5 billion ($A3.28 billion) worth of debt because of unfavourable terms and conditions on US credit markets... Read more

The long-expected jobs cull at Chevron is set to start in earnest after 4000 staff were told over the past week to prepare for the company's move from construction to production at its massive LNG projects in the State's North West... Read more

Northern Iron in talks with financiers of Norwegian subsidiary... Read more

Australia's biggest national park to be created in WA's Kimberley as mining companies relinquish tenement... Read more

General Electric has no plans to sell any other Australian businesses, having offloaded GE Capital last week for $8.2 billion to a private equity consortium, and its head of global operations, John Rice, says the deal does not mean GE lacks confidence in Australia... Read more

TPG posts strong results ahead of proposed iiNet buy... Read more

Internet provider TPG indicates it is unlikely to improve its $1.4 billion offer to take over rival iiNet, despite unrest among some key shareholders. The founder of iiNet, Michael Malone, is among those who are calling for the bid to be rejected and for the board members recommending it to be replaced... Read more

TPG Telecom chief executive David Teoh insists he is willing to meet iiNet founder and former boss Michael Malone to alleviate his deep-seated concerns about the $1.4 billion takeover of the Perth-based internet service provider... Read more

McDonald's is having a hard time. Its profits are down significantly and it’s just had to install a new chief executive to get it out of its bottom line-destroying funk. Last month, its sales in Asia Pacific dropped a further 4.4 per cent after an already worryingly long string of declines. Globally, it went down 1.7 per cent while its American stores saw a decline of 4 per cent... Read more

US-based Saban Brands has made its second acquisition of an Australian beachwear label this year, continuing a trend among cashed up foreign investors to mine the country for brands they hope will appeal to fashion conscious shoppers from Los Angeles to Shanghai... Read more

Coretrack Limited is proceeding to complete the acquisition of Ecopropp, which produces fly-ash based ceramic proppants for use in the hydraulic fracturing of oil and gas wells globally... Read more

Mortgage lender Pepper Group has picked Goldman Sachs and Macquarie as advisers for its potential $1 billion initial public offering. The IPO has been slated for the second half of the year. Pepper earlier appointed Highbury as its financial adviser to help with the float plan... Read more

Jatenergy has agreed to acquire Nanyang Ling Feng Electronic Technology Company, a group of Chinese manufacturing companies producing LED lights which are distributed and sold globally... Read more

Government seeks to limit Telstra advantage in NBN Co data flows. The federal government is seeking to remove any perceived or actual advantage to Telstra as a result of the information it receives from NBN Co on the network rollout... Read more

A partnership between Qantas and China Eastern is stuck on the runway due to concerns it will lift prices and reduce seats to China. The Australian Competition and Consumer Commission (ACCC) intends to reject plans by Qantas and China Eastern to co-ordinate services between Australia and China, saying that could give the airlines the ability and incentive to limit capacity or increase fares... Read more

Qantas link with China Eastern may be an air bridge too far... Read more

A landmark deal that will slash weekend penalty rates for retail workers in South Australia looks unlikely to be replicated in WA unless business groups put better overall wages and benefits on the negotiating table... Read more

Wright family's $25m saga continues... Read more

International Headlines

U.S. Market Report: Stocks were little changed on Wall Street on Tuesday, with slight moves in tight lock step with currency variations as traders focused on the dollar's strength and its possible effect on corporate earnings. The Nasdaq outperformed other major indexes, boosted by a 2 percent gain in Google shares. Morgan Stanley's chief financial officer is leaving the bank to join Google... Read more

North/South Americas Market Report: North and South American markets are mixed. The IPC is higher by 0.29%, while the Bovespa is leading the S&P 500 lower. They are down 0.96% and 0.26% respectively... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The DAX gained 0.92% and the CAC 40 rose 0.67%. The FTSE 100 lost 0.26%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 0.10%, while the Hang Seng led the Nikkei 225 lower. They fell 0.39% and 0.21% respectively... Read more

Brent crude oil fell on Tuesday as the dollar regained its footing against the euro and fears of global oversupply persisted, while U.S. crude's losses were limited by strong domestic economic data. The fall in Brent came after the dollar reversed early losses to rise 0.4 percent against the euro EUR=, making dollar-priced commodities more expensive in the euro zone. Brent futures for May delivery fell 80 cents to trade at $55.10 at 11:43 EDT (1643 GMT). U.S. crude oil was down 15 cents down at $47.30.... Read more

Oil ETF investors, not just OPEC, hold sway over crude market... Read more

Global demand to help oil prices despite U.S. glut-senior Gulf OPEC delegate... Read more

Gold futures finished higher for a fourth session in a row overnight in New York with concerns surrounding Greece’s debt problems and a sharp drop in the U.S. dollar providing support for the metal. Gold for April delivery on the Comex added 0.3% to settle at US$1,187.70 an ounce... Read more

US Federal Reserve board member Dr John Williams says an interest rate rise should happen in the US by the end of this year. Mr Williams told an Australian Business Economists function via video link that conditions in the US were looking better. "In fact, they're downright good," he said... Read more

U.S. consumer prices rebounded in February as gasoline prices rose for the first time since June, and there were also signs of an uptick in underlying inflation pressures, keeping the Federal Reserve on course to raise interest rates this year... Read more

US consumer prices rebound in February... Read more

Fed’s Williams makes case for not delaying rate hike... Read more

Fed's Bullard says zero U.S. rates no longer appropriate... Read more

Two Analysts Just Upped Their Price Targets on Netflix... Read more

U.S. automakers General Motors Co and Ford Motor Co are considering asking the United Auto Workers union to create a new tier of lower-paid union workers in their U.S. factories, Bloomberg reported, citing people familiar with the matter... Read more

Morgan Stanley Chief Financial Officer Ruth Porat is leaving the bank to become Google Inc's CFO, the latest Wall Street executive to move to Silicon Valley, where fortunes can be built fast but businesses can also become irrelevant overnight. Google shares rose 1.8 percent in early trading, while Morgan Stanley shares slipped 0.7 percent.... Read more

Greece will run out of money by April 20 unless it receives fresh aid from creditors, a source familiar with the familiar with the matter told Reuters on Tuesday. Athens is scrambling to send a list of planned reforms to its European lenders in the coming days in the hope of unlocking fresh aid and averting bankruptcy... Read more

UK inflation rate fell to 0% in February, the lowest since records began, official figures show. Lower prices for food and computer goods helped to cut the rate from 0.3% in January, official figures show... Read more

Hungary’s central bank returned to monetary easing after a seven-month pause and pledged to keep cutting interest rates to counter deflation... Read more

Telefonica has finalised a deal to sell its O2 mobile phone network to Hutchison Whampoa for £10.25bn. The companies said they had reached a "definitive agreement" on a deal, which will create the UK's biggest mobile operator. Hutchison, run by Hong Kong businessman Li Ka-shing, owns the Three mobile network, the UK's smallest operator... Read more

A U.S. law firm is asking Tesco shareholders to join a group that wants to bring a lawsuit and seek billions of pounds in compensation for losses relating to the British retailer's overstatement of profit last year. Tesco said on Sept. 22 it had overstated first-half profit by 250 million pounds. It raised that figure to 263 million pounds when it published first-half results on Oct. 23... Read more

A former senior tax official has expressed "surprise" that just one person has been prosecuted in the UK over alleged tax evasion by clients of HSBC's Swiss banking division. Dave Hartnett, who was head of tax at HM Revenue & Customs, said: "I'd always expected there to be be more."... Read more

Russia is to pump about US$425 million into fuelling its crisis-hit automobile industry as Volkswagen became the latest manufacturer to cut back operations in the country. Prime Minister Dmitry Medvedev yesterday announced the plan to boost the beleaguered sector that has seen sales plummet on the back of economic turmoil in Russia caused by falling oil prices and Western sanctions over Ukraine... Read more

China manufacturing gauge at 11-month low: HSBC... Read more

Activity in China's factory sector dipped to a 11-month low in March as new orders shrank, a private survey showed, signaling persistent weakness in the world's second-largest economy that will likely fuel calls for more policy easing to support growth... Read more

China to set more free-trade zones... Read more

South Korea's Hyundai Motor aims to boost its U.S. sales by 4.7 percent this year, ahead of the industry's projected growth rate, despite a consumer shift to SUVs and pick-up trucks... Read more

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