ASB Securities Morning Brief for Tuesday, 24 March 2015
Tuesday, 24 March 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares were mixed, with the benchmark index rising but more stocks in decline. Spark New Zealand led gainers while Kathmandu fell ahead of the release of the retailer's first-half earnings tomorrow. The NZX 50 Index rose 3.851 points, or 0.1 percent, to 5875.227. Within the index, 18 stocks rose, 21 fell and 11 were unchanged. Turnover was $176 million, of which $69 million was Spark and Fletcher Building alone... Read more

The New Zealand dollar rose to a new record against the euro ahead of a key meeting between Greek Prime Minister Alexis Tsipras and German chancellor Angela Merkel, who are at odds over terms of Greece's bailout, and produced a late afternoon burst against the US and Australian dollars. The kiwi climbed to 70.61 euro cents at 5pm in Wellington, and earlier touched a record 70.73 cents, from beating last week's high of 70.13 cents. The kiwi also surged against the greenback, trading at 76.60 US cents, from 75.65 cents at the New York close, having surged at the end of last week, and reached a post-float high The New Zealand dollar against the Aussie dollar of 97.72 Australian cents... Read more

Consumer confidence has strengthened over the past three months, the Westpac McDermott Miller survey found, thanks to a rebound in rural New Zealand. The survey's overall index rose 2.5 points to 117.4. That is comfortably above its long-term average of 111.5 and consistent with signs of buoyant retail activity in electronic card transactions data, said Westpac economist Felix Delbruck... Read more

A long-awaited free trade agreement between New Zealand and South Korea has been signed in Seoul by Prime Minister John Key and the Korean president, Park Geun-hye... Read more

Government targets cost of building consents. Councils may soon face private sector competition for issuing building consents again, as part of a Government drive to make housing more affordable... Read more

SBS Bank CEO Wayne Evans says his bank's 4.99% five-year home loan offer is being met by "heavy, heavy demand," and is an attempt by SBS to buy time with customers... Read more

NZ export log prices record first drop in eight months as Chinese inventories build... Read more

Dairy sector tipped to deal with EU boost. Industry faces number of challenges but outlook is still bright, says DairyNZ chief.... Read more

Rabobank NZ profit rises 31% to record, sees 'sustained' milk price recovery in 2016... Read more

2degrees buys Snap, announces fixed-line service launch... Read more

2degrees unlikely to shake up landline prices, market commentators say... Read more

Snap acquisition 'critical move'. 2degrees' acquisition of internet service provider Snap is being described as a logical move by analysts and allows the company to get into the rapidly growing movie and TV content business... Read more

New Zealand Oil & Gas has lifted its stake in Melbourne-based Cue Energy Resources to 41.55 percent amid signs it has picked up the 12 percent of Cue owned by Zeta Resources, a vehicle associated with NZOG director Duncan Saville... Read more

Pumpkin Patch says nothing certain after talk of approaches sends stock soaring... Read more

Pumpkin Patch's attempt to hose down market enthusiasm about a potential takeover failed to have the desired effect yesterday. Shares in the embattled children's clothing retailer traded as high as 31c, a 10.7 per cent gain on the opening price, before closing at 30.5c. That followed a 33 per cent jump in the stock on Friday... Read more

Auckland International Airport said international passenger numbers through New Zealand's busiest gateway rose 5.4 percent last month, as the later timing of Chinese New Year led to a surge in travellers from China... Read more

Air China's Auckland-Beijing service valued at $200m. Competition for air travel between New Zealand and China is set to intensify with plans by Air China to fly daily direct flights between Auckland and Beijing this year... Read more

Lightbox drops price on Netflix launch, 2degrees may need online TV too.... Read more

MediaWorks will launch a new nationwide radio station next month that will target 50-69 year-olds. 'Magic' will launch on April 20 and has secured radio veterans Mark Leishman, Bob Gentil and Mark Smith. Meanwhile, the private broadcaster announced last week that it would close Kiwi FM after 10 years of operation.... Read more

Trauma problematic, Fidelity boss says. Insurers offering stripped down trauma products may present a problem for advisers, it has been suggested.... Read more

Fletcher Construction has won a multimillion-dollar project at the University of Canterbury, adding to its rebuild construction wins. The subsidiary of listed Fletcher Building will construct stage one of the Regional Science and Innovation Centre. The two-stage centre is a $216 million project providing 25,000 square metres of accommodation for the College of Science... Read more

New Talisman Gold Mines welcomes independent review of Water Management Plan of historic Gold Mine... Read more

Retail giant Cotton On has become the first company in New Zealand to try and take advantage of the new "tea break law", a union says. The Australian retail chain is looking to remove compulsory tea and meal breaks for its workers at their distribution centre in Auckland following the passing of the controversial Employment Relations Amendment Bill in October... Read more

Hundreds of people have taken to social media to voice their anger over Cotton On's proposal to end tea breaks for its employees at a distribution centre.... Read more

Port expansion: Plans to entice Aucklanders include use of Captain Cook Wharf. Ports of Auckland is planning an offensive this week to sell its expansion plans to Aucklanders, using the carrot of releasing Captain Cook Wharf for public use... Read more

The base training standard for financial advisers has had an update and also the cost of taking the course has risen by 36%.... Read more

Liquidators of the Ross Asset Management group of companies, found to be a Ponzi scheme, are looking to claw back $954,000 one investor withdrew before the scheme collapsed, in the first of three test cases. PwC's John Fisk, represented by lawyer Mike Colson, says liquidators have a claim on any funds withdrawn from the investment scheme since December 2010 under the Companies Act, on the basis investors would receive more than their entitlement under a liquidation... Read more

A Ross Asset Management investor who put in half a million dollars, received almost as much back in "fictitious" profits, according to lawyers for RAM's liquidator. But the investors says the money went into a property development that left him in debt and he cannot repay it... Read more

Homeowners join $100m class action on leaky houses. Couple facing $350,000-plus repair bill cannot go to tribunal because property is too old... Read more

Opinion - Geordie Hooft: Beauty of GST is its simplicity... Read more

New Zealand Herald Editorial: Housing call a message to Government... Read more

Opinion - Susan Hornsby-Geluk: Secret settlements also apply to workers. In the past year a disturbing trend has emerged of employees having a crack at their former employers, despite agreeing to confidential and full and final settlements. This is problematic, not only because the settlements are confidential, but because they typically contain non-disparagement provisions that require both parties not to speak ill of one another... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket has closed softer after coming within a whisker of the key psychological threshold of 6000 points, as investors sold off financial stocks. At the 4.15pm (AEDT) official market close, the benchmark S & P/ASX200 index was down 19.4 points, or 0.32 per cent, at 5956.1, while the broader All Ordinaries index had fallen 15.3 points, or 0.26 per cent, to 5921.... Read more

The Australian dollar has risen above US78 cents on expectations the US Federal Funds rate will stay at zero for longer. At 4pm (AEDT), the Australian dollar was at US78.21, up from US76.85 cents on Friday... Read more

Business groups have urged the Federal Government to be "bold" as it formulates the May budget. Prime Minister Tony Abbott made an about-face on the state of the federal budget last week when he insisted the outlook had improved, despite a string of budget savings being blocked by the Senate... Read more

It may not seem like it at times, but Australians are enjoying a boost in their standard of living for the first time in two years. A new analysis has found that despite subdued wages growth, households have been better off in the past year thanks to lower petrol and energy prices - the latter parrtly as a result of the scrapping of the carbon tax... Read more

ANZ Bank chief executive Mike Smith says the hunt for yield on global markets is failing to take proper account of risk and this is a key worry for the financial system. Asked how the system might cope in the event of another financial shock, Mr Smith on Monday said he believed the biggest problem over the next few years was "the huge amount of liquidity that's flowing around the world"... Read more

Primary Gold has raised $1.4 million to complete environmental studies for its high grade Toms Gully gold mine in the Northern Territory... Read more

Saracen Mineral Holdings says its Thunderbox project will enable it to double its annual gold production to 300,000 ounces a year by 2017 and join the ranks of mid-tier producers. Saracen shares were up half a cent, or 1.21 per cent, to 42 cents at the close.... Read more

Explosives maker Orica has appointed non-executive director and former BHP executive Alberto Calderon as its interim chief executive following Ian Smith’s sudden departure... Read more

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

Fortescue Metals Group said it could sell minority stakes in some of its mines as one way to raise new finance amid a slump in iron ore prices and after the ASX-listed company scrapped a $US2.5 billion ($A3.2bn) bond sale. Fortescue, the world's fourth-largest iron ore miner by volume, scrapped the bond sale last week, saying it couldn't get a price low enough to reduce its interest costs... Read more

Aziana Limited is in the process of acquiring artificial intelligence company BrainChip Inc. that is focused on commercialising its hardware-only Neural Computing technology... Read more

Retailer Woolworths has jumped over Wesfarmers — which owns rival supermarket Coles — to become Australia’s second biggest revenue earner in 2014. Woolworths jumped from fourth spot in the prior year, with total 2014 revenue of $61.2 billion, according to market research provider IBISWorld. Wesfarmers dropped to third spot, with $60.5 billion in revenue... Read more

Solomon Lew's specialty retailer Premier Investments has notched up a hefty profit rise, but won't be celebrating with a takeover move on struggling department store Myer. Premier, the retailer behind stationery brand Smiggle and sleep wear maker Peter Alexander, has a lot of cash and little debt, fuelling more speculation that Mr Lew may make a bid for Myer... Read more

Billionaire retailer Solomon Lew has hinted that Myer should consider reducing the number of its department stores.... Read more

Osprey Medical Inc. has reeled in A$16.3 million from investor commitments for a heavily oversubscribed private placement of 30,800,000 CHESS Depositary Interests (CDIs) (representing 15,400,00 shares of common stock) at a price of A$0.53 per CDI... Read more

Premier Investments is reaping the rewards of its international gamble as stationery brand Smiggle makes a major splash in Singapore and Britain. The group’s shares soared 11 per cent on Monday to a record high on the back of a strong first-half result and the announcement of a special dividend payout... Read more

iiNet’s founder and former chief executive Michael Malone has rejected TPG Telecom’s $1.4 billion take-offer offer and called on iiNet’s board to resign if the deal falls over. Mr Malone, who alongside his family still owns about 4 per cent of iiNet, said he did not believe the $8.60-a-share cash deal was structured in the best interests of shareholders saying the offer was “appallingly silent” on how it would affect staff or customers... Read more

iiNet investors revolt over rival TPG's $1.4 billion takeover bid... Read more

Pacific Equity Partners is selling a 9.5 per cent stake in Spotless for $229 million through investment bank UBS, according to sources. The trade involves 104 million shares being sold at $2.21 per each in a deal that was highly anticipated to happen today, as flagged by Dataroom last week... Read more

Vista Group International has completed the acquisition of U.S. cinema software competitor Ticketsoft.... Read more

The corporate regulator says it has issued notices to UBS seeking more information about its so-called “Chinese walls”, after the investment bank amended a controversial equities research report into the heated NSW poles and wires privatisation process.... Read more

A record jail sentence for insider trading was adequate but fines need to be tougher, the corporate regulator says. Former National Australia Bank employee Lukas James Kamay, 26, was last week sentenced to seven years in jail for using market sensitive Australian Bureau of Statistics data to net $7 million... Read more

The head of the Australian Securities and Investments Commission (ASIC) backs calls for the regulator to be funded by the firms it oversees. The Federal Government's Financial System Inquiry and a Senate committee have both previously recommended that ASIC should be industry funded... Read more

Opinion - Adele Ferguson: More woes for National Australia Bank as Senator Sam Dastyari enlists British help... Read more

International Headlines

U.S. Market Report: U.S. stocks were little changed on Monday, following strong gains in major indexes the previous week, as investors assessed gyrations in the dollar and crude prices and their impact on equities... Read more

North/South Americas Market Report: North and South American markets are mixed today. The S&P 500 is up 0.16% while the IPC gains 0.03%. The Bovespa is off 0.05%... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The FTSE 100 gained 0.22%, while the DAX led the CAC 40 lower. They fell 1.19% and 0.65% respectively... Read more

Asian Market Report: Asian markets finished broadly higher today with shares in China leading the region. The Shanghai Composite is up 1.95% while Japan's Nikkei 225 is up 0.99% and Hong Kong's Hang Seng is up 0.49%... Read more

Oil prices rose close to $56 a barrel on Monday as a weaker dollar offset concerns over global oversupply after Saudi Arabia said it was pumping around 10 million barrels per day, near a record high. Brent crude oil futures were trading up 55 cents at $55.87 a barrel at 1436 GMT, after hitting a low of $54.12. U.S. WTI crude was up 34 cents at $46.91.... Read more

Gold futures end week on three-day win streak... Read more

Schlumberger sees prudence as new normal for U.S. shale oil... Read more

Economist Says U.S. Consumer Spending Is About to 'Surge'... Read more

Carlyle CEO says strong U.S. dollar won't deter long term investors... Read more

Buffett tells foreign investors good profits to be made in U.S... Read more

A growing number of U.S. companies, including MillerCoors and AIG, are stepping up the battle against online ad fraud by demanding proof that their ads have been seen by real people instead of computers hijacked by cybercriminals... Read more

DuPont, embroiled in a proxy war with activist investor Trian Fund Management LP for board seats, said it would hold its annual shareholder meeting on May 13. Trian is seeking four seats on DuPont's board, including one for its Chief Executive Nelson Peltz, to help it force the company to split into two... Read more

Merrill Lynch Says Market Underestimating Chance of No Rate Hike in 2015. The market may be mispricing the Fed... Read more

Merrill Lynch fined $2.5 million in Massachusetts.... Read more

What bubble? Many social media stocks are losers... Read more

The U.S. hedge fund P Schoenfeld Asset Management is weighing a challenge to the strategy of Vincent Bollore, the powerful chairman and largest shareholder of Vivendi, at the group's upcoming shareholder meeting, wrote the Financial Times... Read more

Draghi Rejects Accusation That ECB Is Blackmailing Greece... Read more

Greek Prime Minister Alexis Tsipras is meeting German Chancellor Angela Merkel amid mounting concern that Athens is running out of money. The two countries have been at odds over Greece's efforts to renegotiate the terms of its international bailout... Read more

Lagarde says IMF to co-operate with China-led AIIB bank... Read more

British bikes-to-car parts retailer Halfords said on Monday it had appointed an executive of burger firm McDonald's to be its new boss. Halfords named Jill McDonald as its new chief executive with effect from May 11, succeeding Matt Davies, whose departure to take charge of Tesco's UK business was announced in January... Read more

The senior independent director of Tesco is to quit, bringing yet more change to the board make-up of Britain's biggest retailer. Tesco said on Monday that Patrick Cescau will retire on April 7 after six years at the firm... Read more

The Royal Bank of Scotland is selling more of its stake in the US bank Citizens. The sale of the shares, worth up to $3.3bn (£2.2bn), will mean that the UK bank owns less than half of Citizens. It is part of a plan by the state-owned bank to concentrate more on its main UK retail business and reduce its operations abroad... Read more

Volkswagen will reduce shifts and lay off at least 150 workers at its Russian car plant, the German car producer said on Monday, to try to cut costs in a market downturn... Read more

Aberdeen oilfield services group Asco wins £100m BP deal... Read more

China National Chemical Corp (ChemChina) is to buy into Pirelli, the world's fifth-largest tire maker, in a 7.1 billion-euro ($7.7 billion) deal that will put the 143-year-old Italian company in Chinese hands. The deal, agreed with Pirelli's top shareholders on Sunday, is the latest in a series of takeovers made in Italy by cash-rich Chinese buyers, who can take advantage of a weak euro just as signs emerge that Europe is coming out of economic stagnation... Read more

Kuban agricultural holding seeks Asian investment to fund growth. The sanctions war with the West is forcing Russian farmers seek investors in Asia. Kuban Agricultural Holding – part of Oleg Deripaska's business group Basic Element – is in talks to sell a stake with a number of Asian funds and investment companies, including Chinese firm CIC, which is interested in Basic Element's livestock division... Read more

China could make billions of dollars from taxing gains made by employees of e-commerce giant Alibaba Group who are free to sell their shares for the first time since its IPO, as the country tightens up its leaky mechanisms for tax collection... Read more

Asian commodities trading giant Noble Group has said it will launch legal proceedings over allegations made against the firm. The move comes after little-known blog Iceberg Research released a series of reports over its accounting practices, claiming it inflated profits and understated its debt... Read more

Bank of Japan Governor Haruhiko Kuroda said he told Prime Minister Shinzo Abe on Monday that inflation is slowing due to a decline in oil prices but there is no change in the long-term rising trend for consumer prices as the economy improves... Read more

India Won’t Pick Up China’s Oil Slack. Of all the candidates oil investors are interviewing to replace China as the world’s center of demand growth, India seems the most promising. But India won’t turn out to be as reliable as China used to be... Read more

Opinion - Robert Peston: Why Greek default looms... Read more

Opinion/Analysis - Russ Britt: Tax returns exiting U.K., but don’t expect it in U.S.... Read more

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