ASB Securities Morning Brief for Wednesday, 15 April 2015
Wednesday, 15 April 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose led by MightyRiverPower as the stock rebounded from a near six month low. Income paying stocks, such as Kiwi Property Group and Precinct Properties gained. Orion Health Group fell. The NZX 50 Index rose 27.79 points, or 0.5 percent, to 5882.109. Within the index, 29 stocks rose, 11 fell and nine were unchanged. Turnover was $103 million... Read more

The New Zealand dollar rebounded ahead of US retail sales data and the latest dairy auction this week, having been driven lower in the wake of weak Chinese trade data this week. The kiwi traded at 74.60 US cents as at 5:30pm in Wellington, from 74.20 cents at the start of the day and from 74.49 cents yesterday. The trade-weighted index was at 78.70, from 78.60 yesterday... Read more

A sharp slowdown in China would hurt commodity exporting countries like New Zealand and Australia and spill over into Pacific Island countries, the World Bank says in its latest East Asia Pacific Update... Read more

Business confidence softened slightly in the New Zealand Institute of Economic Research's quarterly survey of business opinion, but remains sturdy. Firms both report and expect a slight weakening of activity but only to levels indicative of annual economic growth slight above 3 per cent, NZIER economist Christina Leung said... Read more

National median price rise – thanks to “Auckland effect”. Property sales around the country increased in March, but an increase in the national median price was solely due to Auckland’s booming market, according to the Real Estate Institute of New Zealand... Read more

Million dollar homes drive Auckland house surge in March... Read more

RESIMAC Home Loans has reduced all fixed rates across its Prime Products including interest rates to the LVR bands above 80%.... Read more

The Wellington property market is perking up, with a rapid rise in the number of homes sold, and prices are ticking up after a flat patch. The median price in the Wellington region increased by 5.3 per cent on last year, which equated to about $21,000, according to latest Real Estate Institute figures out on Tuesday... Read more

Schools $244m boost 'disappointing' - Labour. Pre-Budget announcement fails to impress Little who says Government is merely meeting needs... Read more

The New Zealand equity market valuation remains stretched and the market is showing signs of rotation. In a world where the risk free rate is around zero for cash and money is being printed at such a fast pace it is difficult to discuss absolute valuations... Read more

The New Zealand Superannuation Fund has filed legal proceedings in Portugal against that country's central bank as it tries to claw back a loan to a failed Portuguese lender that resulted in a $200 million write-off. The loan - part of a US$784 million credit package US investment bank Goldman Sachs put together through its Oak Finance vehicle - was made one month before Banco Espirito Santo collapsed last year... Read more

The New Zealand Merino Company, which markets wool to customers on behalf of suppliers, has inked an $8 million one-year deal to supply 600 tonnes of New Zealand fine and medium micron wool to US sock and apparel manufacturer SmartWool... Read more

Flurry of IPOs tipped for NZX in coming months, says Nikko Asset's Williams... Read more

The private equity owners of Vitaco Health Group, the trans Tasman health foods manufacturer, are mulling a possible initial public offering or trade sale to Asian food companies, according to Australian media reports... Read more

Trilogy share price rally triggers 'please explain' notice. Shares in skin care and home fragrance company Trilogy have rallied as much as 25 per cent since Friday, prompting a "please explain" from the stock market operator. The NZX issued a price inquiry on Trilogy's stock on Monday, asking the company to explain the sudden rise in its market price. Trilogy shares traded as high as $1.25 on Tuesday before closing at $1.04, up 12 cents since Wednesday.... Read more

Air New Zealand and a global aircraft parts supplier AJW Group have done a deal to service components of Tigerair Australia planes.... Read more

Scott Technology, the industrial automation firm, posted a 40 percent gain in first half profit as sales from recent acquisitions helped drive revenue growth. Profit rose to $1.1 million in the six months ended Feb. 28, from $800,000 a year earlier, the Dunedin based company said in a statement. Sales rose 16 percent to $29.3 million. The company will pay an interim dividend of 2.5 cents a share, unchanged from a year earlier. The shares last traded at $1.38 and have declined 6 percent in the past 12 months.... Read more

Ports of Auckland: City councillors defend port company... Read more

Auckland’s so-called “taniwha tax’ is the topic of a discussion forum being held in Auckland this Wednesday. It is being held by the Auckland Property Investors’ Association, Auckland Ratepayers’ Alliance, Democracy Action and New Zealand Taxpayers’ Union... Read more

Smiths City names 'turnaround specialist' Roy Campbell as CEO. Its shares last traded at 53 cents, valuing the company at $28 million, and have gained 3.9 percent in the past year... Read more

KiwiSaver-style model proposed. A KiwiSaver-style workplace insurance programme has been suggested as an option worth exploring to increase private health coverage in New Zealand.... Read more

With the local craft beer industry booming, two Cantabrians have started a business to deal with a packaging bottleneck facing indie brewers. After several years in beer distribution, Josh Simons and Andy Harris have joined forces to start Bottle Solutions, an independent bottling plant... Read more

PAA is to sell its portfolio of seven residential properties, which holidaying members have been renting for decades.... Read more

Auckland-based Rocket Lab has unveiled what it says is the world's first battery-powered rocket engine... Read more

AMP Capital NZ taps fixed-income chief Grant Hassell as managing director... Read more

The Treasury’s deputy chief executive and chief operating officer, Vicky Robertson, has been appointed chief executive of the Environment Ministry. The ministry is the government’s primary adviser on laws, regulations and policies and sets this country’s framework for environmental management... Read more

Unite union members working at fast food outlets will go on strike and stage protests around the country today over so-called "zero hour" working contracts. Zero hour contracts are where the employer is not obliged to provide workers with any minimum working hours, and the worker is not obliged to accept any of the hours offered... Read more

PrimoWireless switches off "Global Mode" legal threat... Read more

The Kiwi "she'll be right" attitude is leading to an increase in cybersecurity attacks as mobile and social media users download free apps and share links without checking privacy and security policies, according to a report... Read more

Westpac banking on Apple's smart watch... Read more

Who loses under new vehicle levy system? ACC Minister supports the fees, based on crash data from 85pc of country’s fleet... Read more

Liquidators of a failed milk exporting company, which became insolvent after losing an unfair dismissal case with employees, may force the company's Chinese based directors to pay back $145,200 to creditors. NCF International was tipped into liquidation last June, after former shareholders and employees David Cardno and Jan Wolyncewicz won an unfair dismissal case and were awarded $83,408 by the employment court in January 2014, according to a ShephardDunphy liquidators report by Iain Bruce Shephard and Heath Leslie Gair... Read more

Would-be insurer suers eye scale. Numbers needed for Canterbury quake-damaged property owners to pack a hefty punch in proposed group legal action against insurers... Read more

Real estate agent avoids punishment over termite house. A real estate agent who sold a house infested with termites to first-home buyers has escaped punishment for unsatisfactory conduct related to the sale of the house. Wayne Heron sold a Te Aroha home to Tobi Lawton and Sarah Lee, who were buying their first home in December 2013... Read more

Opinion - Ron Stock: Understanding KiwiSaver can be eye-opening... Read more

Opinion - John Armstrong: John Key's make-or-break Budget. Key will be eager to change the message but preamble so far is bereft of fresh ideas... Read more





Australian Headlines

Australian Market Report: Australian shares retreated further from 6,000 as mining and supermarket stocks fell. The benchmark S&P/ASX200 index closed down 0.2% at 5,946.6, despite a lift in the iron ore price, as Standard & Poor’s put eight high-profile miners on watch for investment ratings downgrades. Weakness in major supermarket stocks also weighed on the market... Read more

The Australian dollar has continued its retreat in offshore trade, falling to within 0.2c of a new post-crisis trough as data out of China painted a more negative picture for growth in the world’s second largest economy. At 7am (AEST), the local unit was trading at US75.89 cents, down from US76.01c yesterday. Over the past 24 hours the currency has seen a high of US76.68c and a low of US75.52c, desperately close to the six-year low of US75.34c set last month.... Read more

Nation put on notice as IMF tips slower growth. The world’s leading economic group has cut its growth forecast for Australia as the nation feels the crunch from the rout in commodity prices... Read more

IMF tips Aust jobless rate above 6%... Read more

netwealth unveils managed account service. Financial services group netwealth has launched its much-anticipated managed account service, in addition to announcing a $1.9 billion spike in funds under management (FUM) via its investment platform to $7.3 billion this financial year.... Read more

Australian banks' mortgage concentration worries analysts... Read more

Tony Abbott has washed his hands of responsibility for fixing the GST distribution — and put himself at odds with his Treasurer and Finance Minister who favour a Federal intervention. The Prime Minister said though he had “considerable sympathy” for WA over its plummeting share of the GST, it “can’t and shouldn’t” be changed unless all the States and Territories agree... Read more

UK-based recruiting firm Hays has queried the current make-up of Australia’s workplace regulations, saying they could be the world’s “most complex”, The Australian Financial Review reports... Read more

Bankruptcies fell 11 per cent in the first three months of 2015, the fourth straight quarter of falls... Read more

The Australian government should outsource social services to the private sector by providing tax breaks to corporations behind business ideas that help the vulnerable, leading US business scholar Mark Kramer has said... Read more

Credit demand from businesses has perked up in an indication that the economy could be heading for better times. That's the assessment of credit data provider Veda after its business credit demand index rose by annual rate of 2.4 per cent as of the March quarter and following a soft result three months earlier... Read more

Shock and ore as S&P credit rating downgrades loom for Australian miners... Read more

Standard and Poor’s has placed Western Australia’s long term credit rating on negative watch because of the state’s weakening budgetary position.... Read more

Australia's mining giants are expected to review their shareholder payouts as weak iron ore prices continue to put the industry under immense financial pressure. Plunging prices and no sight of a recovery has prompted ratings agency Standard & Poor's to place eight of the world's largest iron ore producers on CreditWatch negative... Read more

Arrium at risk of breaching debt covenants in FY16 – Credit Suisse. Shares in Arrium, which raised $754m in an equity raising at 48c-a share last September, currently trade at 14c each... Read more

Carnarvon Petroleum has received an Outperform and a Target Price $0.25 from Taylor Collison. The target is more than double the $0.115 last traded price... Read more

Fortescue Metals has restructured its rosters to urgently cut costs in a sign it may axe hundreds of jobs because of plunging iron ore prices. Fortescue's announcement added to fears about its viability unless iron ore prices improve and the belief that a domino effect has begun among the struggling miners in Western Australia's Pilbara region... Read more

Unions have slammed Fortescue Metals Group for failing to consult mine workers before making significant roster changes. The iron ore miner is restructuring rosters from a cycle of eight days on, six days off to a cycle of two weeks on, one week off, in its latest response to plunging iron ore prices... Read more

Waratah Resources has issued 45,454,546 fully paid ordinary shares at an issue price of $0.0022 per share to raise around $100,000 under a share placement to sophisticated investors... Read more

Stonehenge Metals shares lift on wave energy... Read more

Energy Resources of Australia is making major progress on its proposed new underground uranium mine but won't say it is optimistic about it going ahead... Read more

Toll road operator Transurban has posted a healthy lift in third quarter revenues.... Read more

Toll Holdings has moved a step closer to be taken over by Japan Post in a $6.5 billion deal.... Read more

Shares in Vmoto were up sharply after the scooter maker announced it expected stronger revenue and profit over the 2015 calendar year... Read more

Urbanise has executed a conditional share purchase agreement with the owners of the Mystrata Group of companies. Mystrata operates a platform technology business which will complement Urbanise’s current technology platform... Read more

Growing wealth in Asia and a boom in high-roller spending is expected to drive revenue in Australian casinos to $6.2 billion by the end of the decade. Market researcher IBISWorld says the opening of three new casinos in the next five years, all aiming to attract foreign high rollers, will be the main driver of gambling growth... Read more

NSW govt embraces PayPal, Apple Pay... Read more

Britain's financial regulator has fined Clydesdale Bank a record £20.7 million ($40 million) for failings in how it handled insurance mis-selling claims, including providing false information to Britain's financial ombudsman... Read more

Big four professional services firm EY (formerly Ernst & Young) is moving to quickly grow its technology operations via the acquisition of two Australian analytics providers. EY today announced it would take over predictive analytics firm ISD Analytics - whose platform models human behaviour - for an undisclosed sum... Read more

GPT’s Michael Cameron named Suncorp chief.... Read more

Opinion - Howard & Josser & Green; AusPost must embrace digital disruption... Read more

Opinion - Callam Pickering: A brighter outlook for business investment... Read more





International Headlines

U.S. Market Report: U.S. stocks were flat on Tuesday as investors digested the initial major earnings of the first-quarter reporting season, which showed some weakness though companies topped lowered expectations... Read more

North/South Americas Market Report: North and South American markets are mixed today. The IPC is up 0.08% while the S&P 500 gains 0.08%. The Bovespa is off 0.54%... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The FTSE 100 gained 0.16%, while the DAX led the CAC 40 lower. They fell 0.90% and 0.69% respectively... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 0.34% and the Nikkei 225 rose 0.02%. The Hang Seng lost 1.62%... Read more

OPEC should cut production by at least 5 percent: Iran oil minister... Read more

Gold futures log April’s lowest settlement... Read more

Small business confidence fell in March as hiring and capital spending plans weakened, adding to signs that economic growth braked sharply in the first quarter. The National Federation of Independent Business said on Tuesday its Small Business Optimism Index dropped 2.8 points to 95.2 last month. The decline in the NFIB is in line with softer data on employment growth and manufacturing... Read more

U.S. economy still on track for best year since 2005... Read more

Detroit, Stockton bankruptcies may flag wider problems: Fed's Dudley... Read more

Top 20% pay more than 80% of income taxes... Read more

Cyber threats must be addressed without trade barriers: U.S. commerce secretary... Read more

SEC investigating sale of complex securities to mom-and-pop investors: official. A top regulator on Tuesday said the Securities and Exchange Commission will bring more enforcement actions against companies selling complex securities and risky structured products to retail investors.... Read more

Avon Products Inc. is exploring strategic alternatives for the company, including a possible sale of its struggling North America business, people familiar with the matter said. The review is behind the long-struggling beauty company’s cancellation Monday of its planned analyst meeting next month, the person said... Read more

Department store chain J.C. Penney Co Inc said a senior executive inadvertently disclosed information on its same-store sales in the first quarter so far to an analyst. The company's shares fell 3 percent to $9.12 on the New York Stock Exchange.... Read more

Dick's Sporting Goods DKS, affirmed on Tuesday its fiscal first-quarter and full-year earnings-per-share outlooks ahead of a gathering of Wall Street analysts later in the day... Read more

Citigroup Inc is seeking a buyer for its retail forex brokerage CitiFX Pro as part of efforts to streamline the banking world's biggest currency trading operation, a source familiar with the situation told Reuters on Tuesday... Read more

Wells Fargo & Co, the largest U.S. mortgage lender, reported a drop in quarterly profit for the first time in five years as employee costs rose at a time margins are under pressure from low interest rates. Wells Fargo's shares fell 2 percent to $53.58 on Tuesday.... Read more

JPMorgan profit rises as fixed-income trading rebounds... Read more

Embattled BNY Mellon Corp CEO Gerald Hassell, under fire from activist investors, received a public rebuke on Tuesday at the bank's annual meeting for lagging past performance, but also a vote of support to make improvements going forward. The words of criticism and support came from Ed Garden, who joined BNY Mellon's board in December. Garden is a senior executive at Trian Fund Management LP, the activist hedge fund run by billionaire Nelson Peltz that owns about 2.6 percent of BNY Mellon's stock... Read more

Ford Motor Co on Friday will announce an investment of about $2.5 billion in Mexico, industry sources said, the latest multibillion-dollar outlay in the country's booming auto sector... Read more

The International Monetary Fund (IMF) has warned that global growth remains moderate, with "uneven prospects" across the main countries and regions. Compared with 2014, it says the outlook for advanced countries is improving, but growth in emerging and developing economies is projected to be lower. It says there will be weaker prospects in 2015 for some oil-exporting nations... Read more

Centrica names Mark Hodges as new British Gas chief... Read more

UK inflation rate remains at zero in March... Read more

Holcim and Lafarge outlined an even split of seats on the two cement groups' post-merger board, but there was no place for Holcim investor Filaret Galchev, who has yet to announce his support for the proposed $40 billion deal... Read more

Nokia is in talks to buy French rival Alcatel-Lucent in a deal that could create a European telecoms equipment group worth more than €40bn (£29bn). In a joint announcement, the two companies said there could be "no certainty at this stage" that the discussions would result in a deal... Read more

South Africa's Eskom said on Tuesday it will rehire 1,700 employees fired after a strike at the Medupi power plant the utility is building, in an attempt to end a row that has hobbled construction at the facility. The contract workers were dismissed on March 27 for vandalizing property during the one-day strike over better working conditions and higher pay... Read more

Putin’s Mideast Gains Trump $27 Billion Loss From Iran Agreement... Read more

Russia is set to increase its commodity turnover with Indonesia by 100 percent to $5 billion a year in 2016. In order to reach this target, Russian companies are planning to supply Indonesia with new vessels and redevelop its seaports. However, they will be competing with players from China and South Korea... Read more

China premier says downward pressure on economy still increasing: state radio... Read more

The yen is fairly valued around current levels, a key economic adviser to Prime Minister Shinzo Abe said on Tuesday, a day after comments he made were taken to mean the yen was too weak... Read more

India's biggest online retailer has pulled out of a controversial deal after a social media backlash. Flipkart had agreed a deal with phone network Airtel to let customers browse its site for free, with Flipkart picking up their internet data costs. But critics said this went against net neutrality... Read more

India's future purchase of Rafale fighter jets will only come through direct talks with the French government, the defence minister has said, effectively killing talks on a massive deal... Read more

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Latest reports