ASB Securities Morning Brief for Monday, 05 October 2015
Monday, 05 October 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose, lifting the NZX 50 Index from the lowest level in almost a month, on perceptions the market has become less over-valued after two quarters of decline. Z Energy rose, having slumped yesterday as 30 percent of the company changed hands. Infratil fell to its lowest in more than eight months. The S&P/NZX 50 Index rose 8.07 points, or 0.1 percent, to 5593.50. Within the benchmark index, 24 stocks rose, 15 fell and 11 were unchanged. Turnover was $151 million... Read more

The New Zealand dollar is largely unchanged against the greenback this week as improving local outlook eases fears of slowing growth, and as traders wait for US employment data, which will help them weigh up the timing and pace of looming Federal Reserve interest rate hikes. The kiwi traded at 63.90 US cents at 5pm in Wellington from 63.84 cents on Friday in New York last week. It was little changed from 63.97 cents at 8am, and 64.08 cents yesterday. The trade-weighted index traded at 69.73 from 69.82 yesterday, and is heading for a 0.9 percent weekly gain... Read more

New Zealand commodity prices rose in September, following the sharp rebound in dairy prices, and snapping a five-month decline for locally produced raw materials. The ANZ Commodity Price Index rose 5.5 percent to 239.5 last month, matching its July level. In New Zealand dollar terms prices climbed 9.3 percent to 199.4. On an annual basis, world prices were down 18 percent, and up 2.7 percent in New Zealand dollar terms... Read more

Bank of New Zealand: Time ripe to tackle home debt. Kiwis need to act now, with interest rates low, to avoid carrying crippling burden into retirement, bank says.... Read more

Former Reserve Bank (RBNZ) Governor Don Brash is warning the RBNZ is “taking on too much responsibility” regulating banks and insurers, describing the current system as "nuts". Speaking at Auckland University Business School on Thursday night, the former RBNZ Governor (1988-2002), National Party and Act Party leader, and current Industrial and Commercial Bank of China (ICBC) NZ chairman, argued the RBNZ’s heavy-handedness over banks and insurers puts it at risk of being liable in the event of a collapse or something going wrong... Read more

A good dairy deal under the TPPA is unlikely as talks begin to wrap up... Read more

Prime Minister John Key has hit back at "loss of sovereignty" critics of the Trans-Pacific Partnership (TPP) agreement, saying the controversial trade deal won't lead to lawsuits from big corporations. He told TV One’s Q+A programme that “There is genuinely some misinformation." People think, "‘We’ll lose our sovereignty; the New Zealand Government will get sued.' I mean, they’re great statements to make, but they’re fundamentally not true.”... Read more

The biggest free trade deal in a generation could be reached soon - but wrangling over next-generation drugs has held up progress. Trade Minister Tim Groser is in Atlanta, with last hurdles in the Trans Pacific Partnership (TPP) including pharmaceutical patents and dairy import limits... Read more

Fewer Chinese faces at auctions and buyers becoming more picky as we head towards summer... Read more

Mortgage-free by 65? Not likely, survey finds... Read more

Kiwis miss out on KiwiSaver millions. More than a million people did not receive any or all of the government's KiwiSaver subsidy in the last financial year leaving $300 million-plus on the table. Figures from the Inland Revenue Department show 573,231 KiwiSaver members did not get any of the $521 member tax credit in the year to June 30 because they didn't put any money into their account... Read more

Banking syndicate deadline gives Silver Fern too little time to mull alternatives, Grant Samuel says. Silver Fern Farms ran out of time to consider alternatives to a 50-50 joint venture with Shanghai Maling Aquarius, because of the looming deadline for its debt facility with a banking syndicate and the risk that lenders would withdraw support and tip the meat company into receivership if the deal isn't consummated, Grant Samuel says... Read more

Landcorp disappointed Fonterra to end guaranteed price... Read more

New Zealand stocks booked their worst quarter since June 2012, retreating for a second quarter, as a drop in global commodity prices and fears about emerging economies weighed on equities. The NZX 50 Index declined 3.5 percent in the three months to Sept. 30, adding to the June quarter's 1.9 percent decline, when it snapped 11 consecutive months of quarterly gains... Read more

Ngai Tahu Holdings Corp's net profit has fallen to $115.8 million as the margins on property deals tighten and the iwi business anticipates a decline in demand for residential homes. The result for the 12 months to June 30 compares with a bottomline of $160.58m reported by the commercial arm of South Island iwi Ngai Tahu in the 2014 financial year. That result included $33m of insurance proceeds. The entity, which acts as as a charitable trust, has subsidiary businesses in property, farming, seafood and tourism, as well as direct share investments... Read more

AFT Pharmaceuticals says decision imminent on dual listing in NZ, Australia... Read more

AdBlock joins rival AdBlock Plus in Acceptable Advertising 'extortion' scheme... Read more

Commerce Commission clears FedEx to acquire TNT. The Commission has given clearance to FedEx to acquire all the shares in TNT. Both FedEx and TNT are global companies active in the provision of logistics, freight and small package delivery services... Read more

Senior lawyer suggests simple solution to anti-money laundering law arbitrage opportunity, says judgment against FMA well constructed and logical... Read more

Requirements imposed by the Anti-Money Laundering Act are serving as a disincentive to clients thinking about putting their money with financial advisers, it has been claimed.... Read more

Bunnings workers protested at one of the country's newest DIY stores as the deadlock continues over new contracts. About 40 staff picketed outside Bunnings New Lynn in West Auckland on Saturday, just a few months after the mega-store opened. It is the latest strike action against Bunnings as workers protest new contracts across the country.... Read more

An independent consumer watchdog says more people are complaining about their phone company or ISP. David Russell, Chair of the Telecommunications Dispute Resolution (TDR) Council says in the year to June 30, 2015, complaints were up by 292 (18%) over the prior year... Read more

A second Palmers Planet franchisee has gone into liquidation this year, and between them the two owe $3 million to almost 300 creditors. Deblan Limited Partnership, which traded as Palmers Planet St James in Hamilton, was placed into liquidation this month owing $1m to almost 100 creditors. Its partner company, Deblan Management, has also been placed into liquidation... Read more

Volkswagen's New Zealand division has quarantined 36 new vehicles with emissions-cheating diesel engines, but acknowledges there are likely to be hundreds more on our roads.... Read more

The Commerce Commission has received dozens of complaints about a controversial telephone billing and equipment company in the past four years - but so far has only sent an advice letter. Documents obtained under the Official Information Act show that since 2011, the commission has received 43 complaints or enquiries about Intagr8, a telco based on Auckland's North Shore with more than 2500 business customers nationwide... Read more

A Palmerston North taxi firm has been ordered to pay a former employee $9000 after it tried to fire them under the 90-day trial law. The firm, Taxis Gold and Black, made the error when it failed to put a clause in Denise Jarden's contract saying the trial would apply. And the firm knew it was wrong, but said the case had to go to the Employment Relations Authority because they could not afford to resolve the dispute... Read more

SCIRT under investigation for worker injury but maintains safe record. The organisation leading the rebuild of Christchurch's roads and underground infrastructure is being investigated by WorkSafe New Zealand after a worker was injured. ... Read more

Opinion - Bernard Hickey: Bernard Hickey argues the Reserve Bank needs to adopt a Bank of England style monetary policy making committee with expert external members able to argue in public... Read more

Opinion - Graham Turley: Efficiency gains key to future. Innovation is needed to lift NZ dairy industry’s competitive position... Read more

Analysis - Nikko Asset Management: Nikko's new house view on global equities moves to neutral. An overweight stance on global equities that was largely in place since September 2011 has been reduced to neutral by Nikko Asset Management’s Global Investment Committee (GIC) as the committee members were less optimistic about the outlook of corporate earnings and share prices in the United States, according to the company’s latest house view... Read more

Opinion - Susan Hornsby-Geluk: Good faith employment contract bargaining is a two way street... Read more

Australian Headlines

Australian Market Report: The Australian stock market looks set to open lower following a weak lead from Wall Street. At 0703 AEST on Friday, the December share price index futures contract was down 18 points at 5,063... Read more

The Australian dollar is lower as weak US manufacturing data and caution about upcoming US jobs figures weigh on the currency. At 7am (AEST), the local unit was trading at US70.30c, down from US70.64c on Thursday.... Read more

The Reserve Bank is tipped to leave the cash rate unchanged on Tuesday, and most economists are predicting there will be no more rate cuts for the foreseeable future. All 14 economists surveyed by AAP expect the RBA to keep the cash rate at two per cent at its October meeting, and only three are predicting that there will be another interest rate cut. Of those surveyed six are predicting the cash rate will be raised late in 2016... Read more

US, Australia near agreement on TPP... Read more

Central banks tipped to buffet ASX this week. Australia's volatile market and currency could be in for a bumpy week as a tranche of central bank meetings and minutes are released, including the Reserve Bank of Australia's monthly interest rate decision... Read more

A dispute between Australia and the US over patent protections for pharmaceuticals is holding up the Trans-Pacific Partnership. Negotiations between the 12 countries in the US city of Atlanta have been extended for an extra day, as the US seeks to increase the length of time patents for new biologic drugs are protected. The move is being resisted by Australia and Japan... Read more

Queensland’s population growth rate a far cry from glory years... Read more

Perth Lord Mayor Lisa Scaffidi has suggested a tunnel under Kings Park as an option for the future of the city’s transport network. Ms Scaffidi made the comment at yesterday’s election debate, where she and mayoral rival candidate Reece Harley clashed over red tape, how to address falling office vacancies and the need to promote economic diversification... Read more

Penalty rates to be election issue... Read more

Retail sales rebound, larger stores win out. Retail sales bounced back from a mid-winter fall with a solid 0.4 per cent rise in August, although large stores appear to have been the main winners... Read more

An Australian company behind a gold mine in Thailand has denied reports it is at the centre of alleged corruption. Thailand's National Anti-Corruption Commission has told Thai media that it is investigating an allegation that Kingsgate Consolidated engaged in corrupt conduct to obtain a gold mining concession.... Read more

New Talisman Gold directors acquire shortfall shares. New Talisman Gold executive director Matthew Hill and chairman James McKee have demonstrated their confidence in the company with each acquiring NZ$70,000 (A$63,730) worth of shortfall shares. Hill and McKee each acquired 10 million shares priced at NZ$0.007 each... Read more

Glencore may sell rural assets... Read more

Glencore backs WA nickel mine. Glencore has been at the forefront of curtailing production and closing mines while metal prices fall but its Murrin Murrin nickel mine in the Goldfields is not in the firing line, says the commodity giant’s global nickel boss Peter Johnston... Read more

Origin Energy has raised $1.35 billion from the first component of its massive capital raising venture aimed at reducing debt. The majority of new, discounted shares offered to institutional investors were taken up, with the small shortfall of shares bought for a higher price in a bookbuild, Origin said. The offer of new shares to retail shareholders will open on October 13 and is expected to raise another $1.2 billion.... Read more

Otto Energy has received US$21.3 million from BHP Billiton in relation to drilling costs for the recent Hawkeye-1 exploration well in the Palawan Basin offshore Philippines... Read more

Mayor upset by bank demands for big mortgage deposits in mining downturn region. Mining communities on Tasmania's west coast are disappointed they will be subject to tighter home lending requirements by a major bank. The NAB is demanding a 30 per cent deposit for residents in towns including Queenstown, Rosebery and Strahan... Read more

Peninsula Energy has completed the 40 for 1 share consolidation of its listed ordinary shares on the Australian Securities Exchange ahead of a listing on the NYSE MKT later this year. On 24th September, shareholders approved the consolidation during the extraordinary general meeting. The company now has 173,422,794 ordinary shares. Last trade was $1.01.... Read more

Heritage Bank’s new boss says branch of future will be high tech. Bank branches are here to stay but prepare for more iPads and apps than traditional tellers and deposit slips, new Heritage Bank chief executive Peter Lock advises. Mr Lock, who will replace John Minz as head of the Toowoomba-based customer owned-bank next month, said people still wanted to have face-to-face contact with branch staff as well as access to the latest banking apps... Read more

IMX Resources defuses legal headache, jumps 17%... Read more

OneAll International will raise only $2.5 million through its initial public offering in a deliberately unusual strategy to convince investors it can be trusted. The premium outdoor furniture company designs and makes its products in China, sells worldwide and has a predicted market capitalisation of $118.5 million when it lists on the Australian Securities Exchange on October 22... Read more

Volkswagen and Audi have withdrawn popular models from sale in Australia as part of the diesel emissions scandal rocking the car industry. The development comes two weeks after Volkswagen was found to have tricked environmental regulators with secret software in 11 million cars that allows diesel models to meet strict standards in test environments before exceeding maximum pollution levels in the real world... Read more

'We no longer trust them': AMP China Growth Fund investors revolt... Read more

Redundancies raise worker stress levels. Corporate cost-cutting has taken its toll, with up to half of staff in some workplaces reporting acute job-related stress or anxiety, a leading mental health expert says. Director of mental health consultancy Blooming Minds, Tasha Broomhall, said as many as 50 per cent of the participants at each of the 20 companies involved in her programs claimed to suffer an anxiety disorder... Read more

Labor's trade spokeswoman Penny Wong says reports the Liberal Party is launching advertisements labelling anyone opposing the China free trade agreement a racist shows nothing has changed under Malcolm Turnbull. She says former prime minister Tony Abbott resorted to the race card instead of answering genuine questions about the FTA... Read more

Opinion - Bill Evans: The Reserve Bank of Australia board meets next week on October 6. There is little chance that the board will decide to change rates. Markets are giving a less than 10 per cent probability to a move in October rising to a 25 per cent probability by November and 50 per cent by December... Read more

Opinion - Michael West: eBay base laid bare in court case. EBay's lawyers fired off an email to Westpac last February. Its attachments were titled "Project Claw – Freezing Orders". The subject of these freezing orders – also the targets of the sinister "Project Claw" – are Glen Gaunt and Dana Joab, a couple who used to work at eBay and whom eBay is now suing... Read more

Opinion/Analysis - Tony Crescenzi: Volatility from a phantom rate hike... Read more

International Headlines

U.S. Market Report: The US economy added just 142,000 jobs in September, lowering the chance of an interest rate rise this year. The figure was far lower than the 205,000 increase forecast by economists. The number of jobs created in July and August were revised down by a combined 59,000. Wall Street opened sharply lower, with the Dow Jones and S&P 500 indexes both down about 1.3%.... Read more

North/South Americas Market Report: North and South American markets finished broadly higher on Friday with shares in Brazil leading the region. The Bovespa is up 3.80% while U.S.'s S&P 500 is up 1.43% and Mexico's IPC is up 0.09%... Read more

European Market Report: European markets finished higher on Friday with shares in London leading the region. The FTSE 100 is up 0.95% while France's CAC 40 is up 0.73% and Germany's DAX is up 0.46%... Read more

Asian Market Report: Asian markets finished broadly higher on Friday with shares in Hong Kong leading the region. The Hang Seng is up 3.17% while China's Shanghai Composite is up 0.48% and Japan's Nikkei 225 is up 0.02%... Read more

Saudi Arabia on Sunday made deep reductions to the prices it charges for its oil, hard on the heels of cuts last month by rival producers in the Gulf. With U.S. production still increasing despite lower oil prices, members of the Organization of the Petroleum Exporting Countries are battling to keep their share of the last growing markets in Asia... Read more

The United Arab Emirates, the fourth-biggest OPEC producer, is sticking with investment projects to boost energy output even after the plunge in oil prices in the past year. “Investments are ongoing, we are a mature producer,” Energy Minister Suhail Al Mazrouei told reporters at a conference in Abu Dhabi, the U.A.E.’s capital and largest emirate... Read more

Qatari stocks rose to the highest in almost three weeks, tracking gains in global markets Friday that were fueled by the fading prospect of an increase in U.S. interest rates this year. Dubai shares declined... Read more

Ugly jobs report casts doubt over 2015 Fed rate hike... Read more

Federal Reserve Vice Chairman Stanley Fischer said he doesn’t see immediate risks of financial bubbles in the U.S., while raising concerns that the central bank’s policy tool kit to deal with such occurrences is limited and untested... Read more

Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said the U.S. central bank would have been “totally justified” if it had increased policy stimulus to combat low inflation when it met last month, adding that negative interest rates could be a useful policy tool... Read more

U.S. Democratic presidential front-runner Hillary Clinton, who has been vying with challenger Bernie Sanders for the support of organized labor, scored a win on Saturday with an endorsement from the National Education Association, a huge teachers union. The NEA, the largest U.S. labor union with 3 million members, is the latest in a string of unions to support Clinton, including the American Federation of Teachers and the machinists' union... Read more

Target Corp. will become the biggest retailer to offer the Apple Watch, throwing support behind a device that’s fighting for mainstream acceptance this holiday season. The Apple Inc. product will debut in some Target stores this week, before reaching all of its locations by Oct. 25, the Minneapolis-based retailer said on Friday... Read more

The United Auto Workers union and Ford Motor Co. said they have averted a strike at a factory in Kansas City, Mo. that builds the company's best-selling F-150 pickup trucks. Ford said in a statement Saturday that they "resolved the open items" at the Kansas City Assembly Plant and have agreed to a tentative local agreement, without elaborating... Read more

Citigroup Hires Deutsche Bank’s Locala to Strengthen M&A Team... Read more

Greek Prime Minister Alexis Tsipras will unveil his government’s policy plans for its new term in office on Monday, including a draft budget for 2016, as he tries to win back the trust of the country’s European partners... Read more

Sepp Blatter has fired back at Coca-Cola: I "will not resign." The president of FIFA responded Friday to a call from Coca-Cola to step down immediately. McDonald's (MCD), Visa (V) and Anheuser-Busch (BUD) also issued calls for Blatter's resignation shortly after the Coca-Cola statement came out... Read more

The Volkswagen emissions scandal was a "dramatic event" but would not inflict lasting damage on Germany's reputation, Angela Merkel has said. The German chancellor said on Sunday that the car maker now needed to provide the "necessary transparency"... Read more

VW Chief Warns Cheating Scandal May Threaten Company's Existence... Read more

Pound Traders Turn to BOE After Fed Rate-Increase Outlook Dims. After a week that saw currency traders push back their expectations for a Federal Reserve interest-rate increase, investors will turn their attention to the Bank of England’s decision on Oct. 8.... Read more

Tory conference: Tax credit cuts to go ahead, says David Cameron... Read more

Ukraine’s government will have to wait a bit longer for the third installment of a $17.5 billion bailout from the International Monetary Fund. “Understandings were reached on most issues,” Nikolay Gueorguiev, the IMF mission chief for Ukraine, said Saturday in an e-mailed statement after several days of discussions with the country’s officials... Read more

Portuguese Start Voting to Give Verdict on Bailout Years... Read more

Russian companies have good chances to return to Iranian projects - Russian energy minister... Read more

India Asks Rich Countries to Help Fund Environmentally Friendly Development... Read more

Opinion/Analysis - Matt Egan: Brace for worst year on Wall Street since 2008. It's shaping up to be the crummiest year for U.S. stocks since the implosion of Lehman Brothers... Read more

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