ASB Securities Morning Brief for Saturday, 23 May 2015
Saturday, 23 May 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose, led by Coats Group after it said earnings were on track. Nuplex Industries advanced after it flagged it would lift its dividends. The NZX 50 Index rose 7 points, or 3.6 percent, to 5776. Within the index, 26 stocks rose, 19 fell and five were unchanged. Turnover was $128 million... Read more

The New Zealand dollar is heading for a 1.2 percent weekly decline this week as investors weigh up whether measures to reign in the country's housing market will free up the Reserve Bank to cut interest rates. The kiwi fell to 73.82 US cents at 5pm in Wellington from 74.72 cents on Friday in New York last week. It traded at 73.28 cents at 8am and 73.34 cents yesterday. The trade-weighted index rose to 76.30 from 75.94 yesterday, and is heading for a 0.4 percent weekly decline... Read more

Consumer confidence index 'perky' with a net 25% expecting to be better off next year. Consumer confidence has eased in the latest monthly ANZ Roy Morgan survey but remains on the positive side of its long-run trend. The survey index slipped five points to a "reasonably perky" 124, said ANZ chief economist Cameron Bagrie. Its long-term average is 118... Read more

The government decided to boost benefits for beneficiaries with children because the gap between benefit levels and the lowest income wage earners had become "a bit too wide," Finance Minister Bill English said at a post Budget breakfast meeting in Wellington... Read more

Chinese banks creeping into lending market. Some big Chinese banks are starting to set up shop in New Zealand, but what could that mean for the residential mortgage market?... Read more

Westpac has reduced its term deposit rates. What makes this change notable is that they have lead with reduced levels below their main rivals. In fact, for a term deposit of $20,000 Westpac now has the stingiest offer from almost any bank (although HSBC may have lower NZ rates)... Read more

Chinese take milk battle to Fonterra. Another Chinese dairy factory is setting up shop in Waikato and taking milk straight from the farm - at a time when our largest co-operative appears vulnerable... Read more

New Zealand wool prices jumped to multi-year highs at auction even as the volume on offer rose 78 percent, amid strong demand from exporters... Read more

Lake Ellesmere clean-up deal explained. Will dairy intensification pay for better water quality?... Read more

Financial advisers are not represented on the Financial Advisers Act review steering group. An issues paper for the review is due over the coming weeks but reportedly has to go to Cabinet before it can be distributed... Read more

The Financial Markets Authority (FMA) this week announced it has expunged 23 offshore entities from the Financial Services Providers Register (FSPR) so far this year. Given numerous such entities have dragged New Zealand's name through the mud over recent years this sounds encouraging... Read more

Coats Group, the NZX-listed UK threadmaker once part of the Guinness Peat Group empire, says sales growth has been in line with management's expectations in the first four months of the year, and affirmed its forecast for stable operating profit in 2015. Shares of the company last traded at 55c, and have gained 22% this year.... Read more

Ryman Healthcare, New Zealand's largest listed retirement village builder and operator, posted a 24 percent gain in annual profit as the value of its properties increased and revenue rose. Shares in the company last traded at $8.06 and have slipped 5.4 percent so far this year.... Read more

Lance Wiggs’ investment fund Punakaiki will use Snowball Effect to crowdfund up to $2 million. Mr Wiggs says the decision to pick Snowball Effect over PledgeMe was a difficult choice, as they are the best crowd funding platforms in the market. “It came down to the wire,” he says... Read more

Port of Tauranga expansion will see more trains. More train services and longer trains will be needed daily to cope with extra freight after next year's port expansion. Port of Tauranga will be expanding next year to accommodate 40 per cent larger ships and with this comes the need for more freight capacity... Read more

Serko, the online travel booking business, reported a wider annual loss in line with its prospectus forecast, while delivering slower growth in sales than anticipated, and is targeting profitability in the first half of 2017. The Auckland-based company posted a net loss of $6.43 million in the 12 months to March 31, more than the $6.33 million forecast in offer documents when the company was floated last year.... Read more

Hellaby buys auto parts, truck servicing businesses for 'less than $25M'... Read more

CBRE New Zealand retail services division has strengthened its retail activity by clinching the leasing agency for two major shopping centres. At Papamoa Plaza, Tauranga, CBRE retail services has been appointed sole leasing agent for a two-phase project that will see refurbishment of 14,000m2 of retail space opening in September this year, plus the addition of 6000m2 of new space over the next 12 months... Read more

Nakedbus.com Acquisition Completed. ManaBus.com is proud to announce the deal is now officially complete. The acquisition was first announced on 7th of May by Sir Brian Souter of Souter Holdings Limited... Read more

Comvita lifts annual profit 28 percent, beating expectations. Comvita shares last traded at $4.15 and have gained 12 percent since the start of the year... Read more

Nuplex Industries, the specialty chemical and resin maker, expects to increase its annual dividend by nearly a third and has lifted payout ratio to 60% of profit. Nuplex shares closed at $3.68, the highest level since February 2011 and have gained 23% since the start of the year. ​... Read more

Costs of Government’s Telecommunications Levy to be passed on to consumers.... Read more

John Key says levy 'won't make a blind bit of difference' to tourist numbers. When is a tax not a tax? When the Prime Minister says so. John Key has denied going back on his word by introducing a "border clearance levy", which will sting travellers with $22 in arrival and departure taxes.... Read more

Work will start later this year on the first high-rise commercial tower to be built in Auckland in over a decade. Mansons TCLM has announced its intention to build a new 30-storey $675 million office, hotel and retail building on a 4258sq m block of land between Wyndham St, Albert St, Swanson St and Mills Lane in Auckland’s CBD. It will comprise 30 levels of office accommodation, a five-star, 125-room hotel and a variety of luxury brand shops at ground level... Read more

The Financial Markets Authority (FMA) this week announced it has expunged 23 offshore entities from the Financial Services Providers Register (FSPR) so far this year. Given numerous such entities have dragged New Zealand's name through the mud over recent years this sounds encouraging... Read more

The Mortgage Supply group has added three more advisers to its ranks.... Read more

Social media ban for departing workers plan. Workers rushing to update their social media profiles about a new job are being blocked by legal clauses in employment contracts.... Read more

Complaints only 'tip of iceberg'. Rotorua employees have made more than 30 complaints in the past three years under two pieces of legislation designed to protect workers from being ripped off by their bosses.... Read more

Commerce Commission says Christchurch Airport still targets excessive return... Read more

Opinion - Brian Gaynor: Takeovers make more money than schemes... Read more

Opinion - Gareth Morgan: Reserve Bank Warns of risks to financial stability... Read more

Opinion - Alex Malley: English deserves applause for impressive financial plan. As a picture of New Zealand's forecast financial performance and the Government's fiscal plans, Finance Minister Bill English's seventh Budget impresses... Read more

Opinion - Fran O'Sullivan: Fran O'Sullivan: English still Mr Relia-Bill... Read more

Opinion - Grant Davies: A Broker's View: Infratil... Read more

Opinion - Diana Clement: Generation debt can benefit from SavY advice. Many students don’t realise how difficult it will be to repay a loan... Read more





Australian Headlines

Australian Market Report: The Australian sharemarket closed flat as weak financial stocks and consumer staples offset gains in the mining and energy sectors. At the 4:15pm (AEST) official market close, the benchmark S&P/ASX200 index added 2.4 points, or 0.04 per cent, to 5664.7, and the broader All Ordinaries index gained 4.6 points, or 0.08 per cent, to 5668.2.... Read more

The Australian dollar is higher as the US dollar weakened amid speculation about when the US Federal Reserve will hike interest rates. The Australian dollar was worth US79.12c at 5pm (AEST), up from US79c yesterday... Read more

Economist urges caution on Australia's free trade agreements. The Nobel Prize winning economist Professor Joseph Stiglitz has warned Australia of hidden dangers in the proposed free trade agreement called the TPP, or Trans Pacific Partnership. Selling the budget this year, the Treasurer Joe Hockey said his assumptions about economic growth were based in part on recent free trade agreements. Professor Stiglitz urges caution on that too. (video only)... Read more

Australia urged to fix transport systems or face gridlock... Read more

Macquarie Group has joined the growing number of banks charging property investors higher interest rates, as it faces pressure to curb a rapid expansion in home lending. After a week in which banks have put the brakes on property investor lending, changes that took effect on Friday will mean Macquarie customers taking out fixed-rate investor or interest-only loans will pay higher rates than borrowers who live in their property... Read more

Bankwest has tightened its investment lending limits as mortgage lenders step up a push to take the heat out of the investor property marke... Read more

MP pushes for iron ore royalty floor in a bid to reduce the impact on WA's coffers... Read more

Forrest takes a black eye, but vows to punch on... Read more

The head of Gina Rinehart’s $10 billion Roy Hill project has warned that Australia’s iron ore industry faces continued competition from foreign producers, with the sector to remain under pressure to improve its efficiency... Read more

Atlas Iron has accepted a royalty relief package from the West Australian government which will provide a $12.5 million cash injection for the struggling miner.... Read more

TNG Limited has been granted an ASX trading halt in relation to a material capital raising.... Read more

Shares in Venturex Resources closed up sharply after the company announced the sale of its Pilbara copper/zinc project for $14 million... Read more

Caravel Minerals is preparing to outline details on its Calingiri Project in Western Australia, with the ASX granting the company a trading halt to prepare... Read more

The Australian Federal Police has confirmed it is still investigating BHP Billiton, as more details have emerged of a $30 million fine handed to the mining giant by US authorities. The US Securities and Exchange Commission last night announced the penalty imposed under America's Foreign Corrupt Practices Act, over lavish hospitality given to government officials as BHP sponsored the 2008 Olympic Games in Beijing... Read more

Perth mayor didn't disclose BHP gifts... Read more

Masters losses were more than $66m in three months, US hardware giant claims... Read more

Woolworths shares 'definitely looking cheap' despite Masters, fund managers say. Some institutional investors are cautiously expressing interest in Woolworths' shares again, despite deepening losses in its controversial Masters hardware division. ... Read more

Fairbrother wins $2 million contract to refurbish Spirit of Tasmania ferries... Read more

The heavy sell-off in bank shares has deepened — led by ­Westpac’s dive into “bear ­market” territory — wiping off ­billions of dollars of shareholder value as the four-year yield trade wanes and investors brace for stricter capital rules. Closing out a bleak week for shareholders, Westpac yesterday fell a further 0.28 per cent to $32.56 — taking it down more than 20 per cent from its April high of $40.07 — breaching the threshold for a bear market... Read more

Shares in Oroton have nosedived after the luxury fashion retailer scrapped its forecast for earnings growth. The company had been expecting earnings in the second half of its fiscal year to be higher than in the same period a year earlier, but third quarter earnings fell by more than $2 million... Read more

Fruit processor SPC opens $100m redevelopment, credited with saving Goulburn Valley manufacturer... Read more

IAG makes first foray into Indonesia with stake in PT Asuransi Parolamas... Read more

Alchemia Limited in halt relating to profit share for anti-coagulant drug... Read more

Casino rivals have final roll of the dice in bid to develop Queen’s Wharf. Rival casino giants James Packer’s Crown Resorts and Echo Entertainment yesterday had their last toss of the dice in their at-least-$3-billion bids to build the Queen’s Wharf precinct in Brisbane.... Read more

Aldi shoppers ‘buck the trend’, love store brands. Are Aldi shoppers actually different from Coles or Woolworths customers? Yes, in one significant way, according to new research by Roy Morgan.... Read more

Funeral homes and cemeteries operator InvoCare has withdrawn a proposed termination benefits package for former chief executive Andrew Smith following concerns by some larger shareholders.... Read more

Liquidators of the failed company behind music festivals Summadayze and Future Music are looking at suing some former directors and company officers as creditors remain millions of dollars out of pocket. Music Events Holdings was placed into liquidation in September 2013, but 52 former suppliers are still short of ­almost $3 million while nine former employees remain about $200,000 out of pocket... Read more

Queensland Health aims to be off XP in 12 months... Read more

It is a "sad day" for Tasmania-based chocolate maker Cadbury Australia which will shed 20 per cent of its workforce from its factory in Claremont, unions say. The company has been notifying staff of the 80 redundancies ahead of the weekend... Read more

Opinion - Bill Evans: Weekend Economist: A healthy dose of confidence... Read more

Analysis - Peter Ryan: How a non-existent inquiry hurt Twiggy and Abbott. Both Tony Abbott and Twiggy Forrest have come out of this failed push for an iron ore inquiry looking a little dishevelled. Perhaps it's time to remember the adage: when you're in a hole, stop digging. Peter Ryan writes... Read more

Opinion/Analysis - Victoria Thieberger: What keeps top fund managers awake at night... Read more





International Headlines

U.S. Market Report: Global equity markets dipped but remained near record highs on Friday after Federal Reserve Chair Janet Yellen said she expected interest rates to rise this year, a view that lifted bond yields and was bolstered by rising core consumer prices... Read more

North/South Americas Market Report: North and South American markets finished broadly lower today with shares in Brazil leading the region. The Bovespa is down 1.33% while Mexico's IPC is off 0.50% and U.S.'s S&P 500 is lower by 0.22%... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The FTSE 100 gained 0.26%, while the DAX led the CAC 40 lower. They fell 0.42% and 0.07% respectively... Read more

Asian Market Report: Asian markets finished broadly higher today with shares in China leading the region. The Shanghai Composite is up 2.83% while Hong Kong's Hang Seng is up 1.70% and Japan's Nikkei 225 is up 0.30%... Read more

Oil futures settled lower on Friday, with the U.S. benchmark scoring its 10th straight week gain by a thread, as concerns over the global glut of crude supplies persisted ahead of a long holiday weekend... Read more

OPEC may condemn the world to an oil glut for years... Read more

A global study warns the gap between rich and poor is widening at a dramatic pace. The Organisation for Economic Cooperation and Development, or the OECD, has found that the world's richest 10 per cent earns nearly 10 times more than the poorest 10 per cent.... Read more

Treasurys end week lower on strong CPI... Read more

Yellen: Fed can't risk 'overheating the economy'... Read more

Microsoft Corp. had reportedly been in talks to buy Salesforce.com earlier this spring but the discussions fizzled out after the two failed to see eye-to-eye on price, according to CNBC... Read more

Many retailers have reported disappointing results this quarter. Best Buy was not one of them. The electronics chain lived up to its name Thursday, posting sales and profits that topped Wall Street's forecasts. The company also gave a solid outlook for the next quarter. Shares of Best Buy were up 4% Thursday on the news.... Read more

QE Great for Europe Stock Markets, Not So Much for Pension Funds... Read more

EU Said to Tap Michelis as Greek Bank-Rescue Fund Chief... Read more

Merkel, Hollande Tell Greece to Take Route A to Agreement. Angela Merkel and Francois Hollande told Greece there’s no alternative to dealing with creditors as it seeks to unlock bailout funds, after another round of negotiations failed to break the impasse over aid... Read more

The economic skies above Europe are clearing after the long years of crisis and governments should take advantage of this to get their economies in order, European Central Bank president Mario Draghi said on Friday. "The economic outlook for the euro area is brighter today than it has been for seven long years," Draghi told an economic forum in Sintra, Portugal... Read more

Bank of England Accidentally E-mails Brexit Plans to The Guardian... Read more

British banks planning for EU 'no' stymied by lack of European office space. A shortage of prime office space in rival European financial centres may torpedo plans by some of London's banks to quit the UK capital if Britain opts out of European Union membership... Read more

Deutsche Bank hit by shareholder investor revolt... Read more

French telecommunications group Altice SA is talking to several banks about raising debt for a potential bid for Time Warner Cable Inc, the second-largest U.S. cable operator, according to people familiar with the matter... Read more

EU agrees 1.8bn-euro loan to cash-strapped Ukraine... Read more

US tech giant Hewlett-Packard is selling a 51% stake in its Chinese server business for $2.3bn (£1.4bn) to Tsinghua Holdings. The deal brings together HP with the investment arm of China's Tsinghua University in a joint venture called H3C, worth $4.5bn... Read more

China offers to build Hunchun-Vladivostok high-speed railway... Read more

China's richest man lost $15 billion in one hour. China's richest man, Li Hejun, is having a really bad week. The chairman of solar panel firm Hanergy lost $15 billion on Wednesday when shares in the company plummeted 47% in Hong Kong trading -- in about an hour. The company saw $18.6 billion wiped off its market value.... Read more

Bank of Japan holds fire on stimulus after upbeat GDP data... Read more

Mazda and Mitsubishi recall cars over Takata airbags... Read more

The earthquake that struck Nepal will likely slow the Himalayan country’s economy this year and next, the Asian Development Bank said Friday in its first detailed assessment of the damage. The ADB now expects the Nepalese economy to grow 3.8% in the fiscal year ending July 15... Read more

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