ASB Securities Morning Brief for Monday, 29 June 2015
Monday, 29 June 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose as Meridian Energy and MightyRiverPower rebounded from recent lows. Diligent Corp and Fisher & Paykel Healthcare advanced as the kiwi dollar fell. The S&P/NZX 50 Index rose 22.16 points, or 0.4 percent, to 5755.45. Within the index, 25 stocks rose, 15 fell and 10 were unchanged. Turnover was $118 million... Read more

The New Zealand dollar is heading for a 0.3% weekly decline against the greenback as financial markets hang on the outcome of Greece's debt negotiations before its 1.6 billion euro loan comes due at the end of the month. The kiwi fell to 68.86USc at 5pm in Wellington from 69.08USc on Friday in New York last week. It traded at 69.02USc at 8am and 69.15USc yesterday. The trade-weighted index declined to 71.94 from 72.19 yesterday, and is heading for a 0.2% increase on the week... Read more

Dollar still at 'unjustifiable', 'unsustainable' levels, RBNZ says... Read more

New Zealand’s annual trade deficit unexpectedly shrank in May as exports rose more than forecast and imports lagged predictions... Read more

Ngati Whatua files court papers over Crown land in Auckland... Read more

The affordability of a typical first home in Auckland has deteriorated dramatically, new figures show. The latest First Home Buyer's Affordability Report shows entry-level housing is now considered affordable in every New Zealand region except Auckland, where the price of a lower quartile home has jumped by $170,100 (38.2 per cent) in the past two years alone.... Read more

NZ finishes 2014/15 wool season with smallest volume sold at auction in at least 7 years... Read more

Allan Barber compares the prospects of two trade agreements currently being negotiated - the TPPA and the Gulf States FTA - and finds murky waters. There’s a lot of activity going on with trade negotiations at the moment, but not much certainty about outcomes.... Read more

Tukituki decision a win-win for environment & economy. Federated Farmers is pleased the Tukituki Catchment Proposal Board of Inquiry has released a decision that has allowed for both the environment and economy to prosper. The Catchment Proposal Board of Inquiry has decided to let the Ruataniwha Dam go ahead with some amendments to the conditions around nutrient management... Read more

A schism has emerged between takeover target A2 Milk and its controlling shareholder Freedom Foods in comments from A2 boss Geoffrey Babidge reported by The Australian. The newspaper is reporting that Mr Babidge was blindsided by a takeover approach from Freedom and US company Dean Foods, revealed on Monday, after a disagreement with Freedom over strategy... Read more

Heartland New Zealand, the bank formed through the merger of Canterbury and Southern Cross building societies with Marac Finance, has dismissed media speculation that it is in the running to buy Fisher & Paykel Finance. The Christchurch-based lender said it is not participating in any process to acquire the F&P finance group of companies. In May, Fisher & Paykel Appliance Holdings, the Auckland-based manufacturer and consumer credit company owned by China's Haier Group, said it appointed First NZ Capital for the possible sale of the finance operations after being approached by potential buyers... Read more

Blackstone Group's Burger King chain in New Zealand continues to lose money as sales growth is swallowed up by finance costs and other expenses. The net loss for Tango Holdings NZ widened to $7.5 million in 2014, from a loss of $4.4 million a year earlier, according to its financial statements. As a result, income tax credits were $385,528, down from $1.4 million in 2013. Sales rose 1 percent to $177.6 million... Read more

Imarda NZ 2013 accounts, released ahead of Telematics merger, tagged by auditor over inventories... Read more

AMP Capital NZ lifts 2014 income, profit up on sale to parent... Read more

Crafters & Co expanding to open first craft beer warehouse in Wellington. A passion for craft beer has spurred a bar owner to expand his business to give Wellingtonians a million dollar taste of the industry. Wellington has become the craft beer capital, pulling away from mainstream beers and last year Hadleigh Petherick and his brother Spencer followed the trend, opening Crafters & Co bar on Victoria St... Read more

Concerns over changes to dumping law. Heinz Wattie and Hawkes Bay fruitgrowers have lined up against what they say would be a relaxation of New Zealand's anti-dumping regime if Government proposals go ahead. A Government discussion paper, the consultation period for which ended last Friday, proposed an automatic termination period (ATP) for its anti-dumping and countervailing duties... Read more

Health minister Jonathan Coleman says tackling obesity was at the top of the Government’s priority list, but there was “no evidence” a sugar tax worked, and further regulation was unnecessary. “Marketing is an issue but we’ve got to work with the industry to turn that around, and if you look at the Advertising Standards Authority guidelines, which the industry has signed up to, there’s been major changes over time,” he said to Q+A’s Corin Dann this morning... Read more

Report shows New Zealand’s gender inequality in the workplace. Results from the Human Rights Commission’s Tracking Equality at Work report released today are shameful and show we need to do more to help women in the workplace, says the National Council of Women of New Zealand National President Rae Duff... Read more

Swapping New Zealand's national flag for a new and more colourful design could almost double the cost, flagmakers said this week. The purchase cost of a current, single national flag is around $75, but the price could rise to $120 if manufacturers are forced to use digital printers to produce it... Read more

The Ministry of Business, Innovation and Employment is in the hot seat again with ONE News revealing there has been a jump of 23% in MBIE staff earning more than $150,000. MBIE was already in the firing line for seemingly unnecessary purchases including a new sign (nearly $70,000), a state of the art fridge ($24,000), a special projection screen ($140,000) and hair straighteners ($400)... Read more

Colin Craig has been dumped from the party he founded and bankrolled. A newly appointed Conservative Party board suspended Mr Craig's membership "pending a more detailed board review" at a special meeting today, held at a budget hotel near Auckland Airport... Read more

Opinion - Rob Stock: Tighten those belts Auckland, it's rates rise time... Read more

Opinion - Bernard Hickey: Use overseas dosh for Auckland. This week's news from Auckland's housing market must have terrified first-home buyers and delighted property owners. First, Statistics New Zealand reported a record high 48,266 migrants arrived in Auckland in the year to May... Read more

Australian Headlines

Australian Market Report: Australian stocks slammed by Greece, China woes. At the 4.15pm (AEST) official market close, the benchmark S & P/ASX200 index was down 86.8 points, or 1.54 per cent, to 5,545.9, while the broader All Ordinaries index gave up 83.8 points, or 1.49 per cent, to 5,536.1.... Read more

The Australian dollar is lower on a quiet trading day, as investors remain focused on Greece’s deadlock with its international creditors. At 4pm (AEST), the local unit was trading at US77.18 cents, down from US77.30 cents yesterday.... Read more

Australian employers mostly expect to retain or increase staffing levels over the next six months in a sign of rising confidence, according to professional recruiting firm Robert Walters. The firm found that 35 per cent of hiring managers surveyed will be looking to increase headcount, up from 22 per cent in 2014, while 49 per cent expect employee numbers to remain stable... Read more

Australia 'well placed' for Grexit: Hockey... Read more

The economy in better shape than you think. Gloomy predictions of state’s economic outlook are misplaced and the business climate is improving, says a top accountancy expert. BDO managing partner Tony Schiffmann said business people could afford to be more confident and “ realise that things are not as bad as the rhetoric appears”... Read more

Australia's hot property market is expected to come off the boil by 2017. Economic forecaster BIS Shrapnel says low interest rates will fuel further house price growth in undersupplied residential markets, particularly Sydney and Melbourne in the 2016 financial year... Read more

New super laws set up new political clash. Abbott government reforms aimed at forcing industry superannuation funds to have more independent directors have been slammed by unions as another attack on them. The reforms put the government on track for a major fight with unions and the 15 not-for-profit, low fee industry super funds that deliver the best returns.... Read more

The mining industry is heading for another supply crunch unless major projects are approved immediately, according to a report from Ernst and Young. The report said the sector was in the middle of a super correction following the boom, but that an upturn was inevitable and not that far away. “The switch to growth is looming and assets are now relatively cheap and ripe for opportunistic acquisition,’’ the report said.... Read more

Ventnor Resources gears up for equity raise... Read more

Inca Minerals has been granted a trading halt by the ASX.... Read more

Sirius begins debt drawdown. Sirius Resources says it has begun drawing down funds from its $440 million debt facility to progress development of its Nova nickel project near Balladonia... Read more

Aurelia Metals has been granted a trading halt by the ASX, with its shares placed in pre-open... Read more

Contactor Valmec says it has won $7.5 million in new oil and gas service contracts. The contracts, which are based in WA and at Moomba in South Australia, extend across land infrastructure, oil and gas maintenance services and construction... Read more

Valmec Limited has secured $7.5 million worth of additional service contracts through its gas and infrastructure divisions, further building its existing service contracts book... Read more

Resonance Health lands two-year services contract for use of FerriScan... Read more

Shares in Australia's biggest supermarket chain Woolworths have risen as much as 5% in Sydney on media reports of a possible takeover. The Australian newspaper reported fresh rumours that US private equity giant KKR had a bid that could be "almost ready" for consideration... Read more

Telstra's Air wi-fi network goes private... Read more

Insurance payouts from the 2011 Margaret River bushfire have hit almost $60 million and are set to rise, according to figures showing the cost of the devastating incident... Read more

Brandis hits telcos with new security reforms. The federal government is planning to introduce new laws that would force telcos and ISPs to hand over details of network changes and procurement plans or be hit with civil penalties for non-compliance... Read more

Free trade agreement: Removal of electrician skills assessment in China-Australia deal endangers community, union says. Removing a requirement to assess the skills of Chinese electricians on temporary work visas will endanger the Australian community, the Electrical Trades Union (ETU) says. The Government agreed to remove the mandatory skills assessment requirement for Chinese workers in 10 occupations, including electricians, as part of its new free trade agreement with China... Read more

IOOF research division under fire over report copying... Read more

Mr Fluffy: NSW sets aside up to $250 million to buy back houses contaminated with asbestos. New South Wales has finally thrown a lifeline to grief-stricken families caught up in the Mr Fluffy asbestos crisis, ending decades of uncertainty... Read more

Why Qantas wants to silence CEO Alan Joyce's long-time speechwriter. The long-time speechwriter for Qantas chief executive Alan Joyce has left the airline's top lawyers working overtime to ensure her revealing manuscript about one of the most controversial episodes in its history never sees the light of day. Matt O'Sullivan reports... Read more

Opinion - Malcolm Maiden: Australia Post's future is no longer in the mail. Thge letters business is a loss-maker for Australia Post, but the group still has a future... Read more

Opinion - Victoria Thieberger: Yes minister, prices are growing strongly. The contortions of senior Treasury officials to avoid using ‘the B word’ for the housing market at the parliamentary inquiry into home ownership on Friday had all the hallmarks of a classic episode of Yes Minister. Their boss, Treasury Secretary John Fraser, recently declared there was “unequivocally” a housing bubble in Sydney and parts of Melbourne... Read more

Opinion - Tony Peacock: One bright idea that could transform innovation in Australia. When it comes to fostering innovation and the commercialisation of world class research, there is something the United States has that we lack. We ought to learn from the successes of the US in this area, and emulate one program they have pioneered to give our own innovative industries a much needed kick start... Read more

Opinion - Ross Gittins: IMF research confirms paying more to the poor will build the economy... Read more

International Headlines

U.S. Market Report: Sporting gear giant Nike lifted the Dow into positive territory, while disappointing results from chipmaker Micron Technology pushed Nasdaq into the red. The Dow Jones Industrial Average gained 56.66 points on Friday (0.32 per cent) to 17,947.02.... Read more

North/South Americas Market Report: North and South American markets finished mixed as of the most recent closing prices. The Bovespa gained 1.58% and the IPC rose 0.42%. The S&P 500 lost 0.04%... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The CAC 40 gained 0.35% and the DAX rose 0.17%. The FTSE 100 lost 0.80%... Read more

Asian Market Report: Asian markets finished broadly lower on Friday with shares in China leading the region. The Shanghai Composite is down 7.40% while Hong Kong's Hang Seng is off 1.81% and Japan's Nikkei 225 is lower by 0.31%... Read more

Did you know copper added 2.6% for the week?... Read more

Gold trades higher in New York to break five-day losing streak... Read more

Downpours and Drought Send Wheat to Biggest Gain in Three Years.... Read more

The US sportswear maker Nike reported a 24% increase in profit from selling more high end shoes and clothes. The company said net income rose to $865m (£550m) in the three months to the end of May, an increase from $698m a year earlier. That was better than analyst expectations.... Read more

SpaceX Rocket Explodes Minutes Into Space Station Mission... Read more

Sam Adams is about to be kicked out of the ‘craft beer’ category... Read more

Three visiting U.S. senators said on Saturday they hoped Congress would support President Barack Obama's opening toward Cuba, including lifting a ban on U.S. citizens traveling to the Communist-run island. Democratic Senators Patrick Leahy of Vermont and Ben Cardin of Maryland joined Republican Dean Heller of Nevada on a trip to Cuba where they met First Vice-President Miguel Diaz-Canel, Foreign Minister Bruno Rodriguez and ordinary Cubans... Read more

Near-zero interest rates could become chronic in the world's major economies unless "a firm hand" is used. That's the message in an annual report issued on Sunday from the Bank for International Settlements based in Basel, Switzerland... Read more

Greek lawmakers approve call for a referendum. Greek lawmakers gave the green light early Sunday to a proposal by the coalition government to hold a referendum on whether austerity measures demanded by lenders in exchange for further aid should be accepted by the crisis-hit nation... Read more

IMF’s Lagarde: Still open for discussions with Greece... Read more

Greek banks will be closed and capital controls will be imposed, Prime Minister Alexis Tsipras says. Speaking after the European Central Bank (ECB) said it was not increasing emergency funding to Greek banks, Mr Tsipras said Greek deposits were safe... Read more

Tourists urged to carry cash in Greece... Read more

The man who coined the term “Grexit” in February 2012 to describe the risk of Greece leaving the euro area now thinks the country will stay after all. “We expect the referendum to result in a comfortable majority for the ‘Yes’ camp, and expect no Grexit this year and a lower risk of Grexit in subsequent years,” Citigroup Inc. economists including Ebrahim Rahbari wrote in a research note for clients on Sunday... Read more

'Nein Danke' - smaller German firms see U.S. trade deal as threat... Read more

The president of Armenia has suspended an increase in electricity prices that led to more than a week of protests. Serzh Sargsyan said that the government would temporarily cover the cost of the electricity price rise pending a review. Protesters have been blocking the main avenue in the capital, Yerevan... Read more

Center for Reforms may be set up in Russia to search for economic development ways... Read more

A federal judge in Argentina has ordered the seizure of assets of five companies drilling for oil in the Falkland Islands. Tierra del Fuego judge Lilian Herraez ordered the authorities to seize boats and other assets worth $156m... Read more

Blackstone Said to Advise Abu Dhabi’s Taqa on Rising Debt... Read more

China's central bank says it will again reduce interest rates by 25 basis points, its fourth such cut since November as it tries to boost growth. The benchmark interest rate would be reduced to 4.85 per cent and the deposit rate to 2 per cent from Sunday, the People's Bank of China (PBoC) said on Saturday on its website... Read more

Bruce Richards, co-founder of the hedge fund firm Marathon Asset Management, said Chinese stocks are due for a big decline and depressed prices on emerging-market debt are presenting opportunities in Latin America and Asia... Read more

India Attracts Enough FDI to Join Global Top Ten... Read more

India’s State-Owned Banks Strained by Bad Debt, RBI Warns. The gulf between India’s healthy private banks and its fragile state-owned lenders is widening, sparking concerns that the swelling pile of bad debt is straining government-controlled banks and preventing them from growing, a report by the country’s central bank warned Thursday... Read more

Opinion/Analysis - Isabella Zhong: China Stocks Plunge: 3 Risks to Watch. As Shanghai nears bear territory investors should watch out for margin loans, IPOs and capital raisings... Read more

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