ASB Securities Morning Brief for Monday, 17 October 2016
Monday, 17 October 2016

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose slightly, led by Summerset Group Holdings and Air New Zealand, while Steel & Tube Holdings also gained. The S&P/NZX50 Index rose 13.21 points, or 0.2 percent, to 7,133.26. Within the index, 26 stocks rose, 16 fell and eight were unchanged. Turnover was $111 million... Read more

The New Zealand dollar is heading for a 0.7 percent fall against the greenback this week as the Reserve Bank reminded investors it plans to cut interest rates again, while the Federal Reserve is looking more likely to raise rates in the US. The kiwi fell to 71.05 US cents at 5pm in Wellington from 71.58 cents on Friday in New York last week. It was up from 70.57 cents yesterday... Read more

Currency is top dollar. Over recent years the New Zealand dollar has become a prominent traded currency in the global market place, laying claim to the 10th most traded currency in the world. As CMC markets celebrates our 10th anniversary in New Zealand, we take a closer look at what makes our dollar tick and whether it can continue its outperformance over that of much larger economies... Read more

The government's decision to cut New Zealand's intake of migrants' family members from 5500 to 2000 a year was based on four-year-old information, Immigration Minister Michael Woodhouse admits. Its rationale for the cutback is that migrants' relatives are costing the country millions of dollars a year in healthcare and benefits... Read more

General Finance has increased its deposit rates by 50 basis points, taking its headline rate to 5.75% over three years... Read more

The cost of the credits New Zealand businesses have to buy to offset carbon emissions is skyrocketing. The price of a unit has more than doubled in the past year and is up from just $2 a tonne to nearly $19 in the past five years. The price spike follows Government moves to tighten the rules which previously allowed local businesses to buy cheaper foreign carbon credits and offered other concessions which effectively allowed a buy-one-get-one-free deal... Read more

Property investors claim they're helping renters. The Property Investors Association is disputing Labour's claim that speculators are behind the Auckland housing crisis. According to property analysts Core Logic, one in seven homes sold in Auckland are going to people with five or more properties already to their name.... Read more

Lift your game, KiwiSaver providers told. KiwiSaver's watchdog has warned the nine government-appointed default schemes to lift their game after it found low numbers of savers had made a decision about where to invest their money after being parked in such schemes... Read more

Employers are being challenged to take on 500 unemployed young people in the next 50 days to give young New Zealanders a break into their first jobs. Ten of the country's top chief executives have signed an open letter to all Kiwi businesses urging them to back what they're calling the "50/500" campaign.... Read more

The Commerce Commission wants Fonterra Cooperative Group to provide greater insight into the sale of reference products other than on the GlobalDairyTrade platform which feed into the regulated milk price. The antitrust regulator released its draft report on Fonterra's 2016/17 milk price manual, which for the first time includes sales outside GDT for whole milk powder, skim milk powder and butter milk powder. Each season the commission is required to review Fonterra's calculation of what it pays farmers for raw milk to ensure the world's biggest dairy exporter isn't abusing its legislated dominance... Read more

Nominations opened today for the 2016 Fonterra Elections. Elections are being held for two farmer-elected Directors for Fonterra’s Board of Directors, 13 members of the Fonterra Shareholders’ Council, two members of the Directors’ Remuneration Committee and one trustee of the Fonterra Farmer Custodian Trust... Read more

South Island dolphin swimming tour operators do not think TripAdvisor's new policy on animal tourism will affect them. TripAdvisor, and its booking company Viator, announced it will stop promoting tours that fail to meet animal welfare guidelines, particularly those involving "physical contact with captive wild animals or endangered species"... Read more

Heartland Bank, the NZX-listed lender, has lifted its stake in Harmoney Corp, injecting $4 million of new equity into the peer-to-peer lender. The Auckland-based bank paid about 50.9c apiece for almost 787,000 shares, increasing its stake to 13% , filings to the Companies Office show. That's the same price as was paid by Stone Ridge Ventures and P2P Global Investments when they pumped $8.8 million into Harmoney in its last capital raise in February... Read more

Northland excited as NZ-US internet cable rolls off the production line. Manufacturing has started of a 14,000 kilometre internet cable that will link New Zealand and Australia to the United States. The Auckland company behind the investment, Hawaiki Cable, said United States contractor TE SubCom had made the first 1000km of the fibre-optic cable and the construction of its undersea repeaters had also begun.... Read more

Social media provides a skewed view of public opinion and doesn't allow you to understand the people you want as your customers, according to Jason Mayden, the former lead designer for Nike's Jordan brand. Mayden spoke yesterday at Wellington's Te Wharewaka o Poneke, having been brought to New Zealand by Callaghan Innovation to share his insights on brand building, design-led innovation and culture with New Zealand businesses... Read more

Air New Zealand Australasia’s Leading Airline again. Travel and tourism professionals around the world have voted Air New Zealand as Australasia’s Leading Airline for the eighth year in a row as part of the prestigious World Travel Awards presented in Danang, Vietnam overnight... Read more

Low oil prices can be bad for airlines - analyst. A leading aviation analyst says the impact of low oil prices is bad in one way for airlines. Executive chairman of the CAPA, Peter Harbison, said low fuel prices were dominating the way airlines were thinking and working. They were allowing airlines to keep older, less efficient aircraft in service... Read more

Samsung Galaxy Note 7 banned from airlines... Read more

Companies cash-strapped as new Wellington City Council computer runs into trouble. Businesses have been left cash-starved after Wellington City Council's new $16 million computer system, dubbed Project Odyssey, ran into major troubles and neglected to pay the bills. Wellington City Council confirmed on Sunday that payment for a number of contractors had been delayed after its new computer system had "minor teething problems"... Read more

NZTA takes aim at illegal Uber drivers but stays mum about 'aiding and abetting' legal advice... Read more

Leaky-building class action gets go-ahead. A group of leaky building owners with properties clad in Harditex and Titanboard hasreceived permission from the High Court to proceed with a representative action against James Hardie. The group has also secured an opt-in period for those who have not already issued proceedings... Read more

Opinion - Gareth Vaughan: Why the RBNZ should not cut the OCR on November 10. Gareth Vaughan argues the Reserve Bank's inflation targeting regime is broken and it's time for a change... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket finished marginally lower today after jitters over the sharp fall in Chinese trade eased overnight. Wall Street finished down 0.3 per cent last night having pared a one per cent loss, but the S&P/ASX 200 index eased 1.5 points, or 0.03 per cent, to 5434 as firmer Chinese producer price inflation soothed global deflation fears... Read more

The Australian dollar has recovered some lost ground against the US dollar, which came under pressure in the wake of poor Chinese trade data. At 1700 AEDT on Friday, the local unit was trading at 75.77 US cents, up from 75.31 cents on Thursday.... Read more

Stocks of interest on the Australian stock exchange this week... Read more

Chinese banks a bigger risk to Australia than domestic ones: RBA. The Reserve Bank is more relaxed about Australian household finances than it was six months ago, but more worried about the threat of a Chinese debt crisis. The RBA cited slowing home price growth and better lending standards as key factors allowing it to cut the official interest rate further in August, to a fresh record low of 1.5 per cent.... Read more

Apartment boom risks start showing: RBA. The risks of oversupply the Brisbane and Melbourne apartment markets are “coming to the fore”, the Reserve Bank warns. The RBA says the financial system is in good shape overall, particularly with home price growth slower than a year ago, tighter lending standards and slower credit growth to households... Read more

Economists have turned their focus to oversupply pressures in the housing market, as well as employment and crucial inflation data soon to be released. As the Reserve bank released its half yearly Financial Stability Review, including the usual warning about a looming oversupply of apartments in the big eastern capitals, the UBS economics team stepped back and had a look at housing valuations... Read more

NSW government's land titles move will make property less affordable: developers. House hunters will ultimately bear the cost of a NSW government decision to increase the registration fees for land and property, with developers saying they will pass the price hike on to home buyers... Read more

Population growth masking weak economy, making households worse off: CBA economist... Read more

New data reveals the states where Australians work the longest and shortest hours each week. The average work week has shrunk in the past decade for every state and territory, coinciding with a shift toward measuring employee output rather than time on the job. Queensland and South Australia tied for the largest decrease, at two hours less than 10 years ago... Read more

The architect of the Gonski education reforms, David Gonski, is forking money out of his own pocket as part of a $5.25 million gift to needy public schools across Australia while the federal government refuses to provide billions of dollars in funding for the final two years of his reforms... Read more

The WA Property Council will challenge the State’s politicians to create conditions to allow the industry, which contributes $31.8 billion to the State economy, to take over where the resources industry left off. Property Council WA executive director Lino Iacomella will today unveil the industry’s wish list #KeepWAGrowing... Read more

Pilbara Minerals to place order for long-lead items for Pilgangoora. Pilbara Minerals will place orders for several key long-lead items required for Pilgangoora lithium-tantalum project near Port Hedland. The company said the orders were part of its fast-track development strategy for Pilgangoora, ensuring that appropriate infrastructure, access and logistics support were in place to allow construction to begin as soon as project finance was secured... Read more

Court orders $12m Roy Hill payout... Read more

The future of BHP Billiton's Samarco iron ore mine in Brazil has been thrown into doubt after the mining giant admitted for the first time that it cannot guarantee that it will be reopened. The FTSE 100 miner warned that the operation would need to be economically viable to justify a restart and therefore its future was "not assured", it told London's The Sunday Telegraph... Read more

An emerging brewer with its eyes on China has enjoyed a strong debut on the share market, adding $4.2 million to its value. Shares in Broo soared 40 per cent in their first day of trade, up eight cents from their issue price of 20 cents, taking its market value to $14.8 million... Read more

Salmat will launch a $15 million raising to fund the purchase of MicroSourcing International, acquired in August 2016.... Read more

The global retail giant behind Freedom Furniture and Snooze has launched a takeover bid for discount rival Fantastic Furniture. South African-listed Steinhoff International is offering Fantastic Holdings shareholders $3.50 a share — a hefty 43 per cent premium to the closing price on Thursday... Read more

AirAsia X facing multiple safety investigations in Australia. Airasia X is facing its sixth investigation by the Australian Transport Safety Bureau in 18-months, after another incident in southeast Queensland... Read more

Qantas, Virgin Australia and Singapore Airlines are the latest airlines to ban the troubled Samsung Galaxy Note 7 on all flights. The decision comes after the United States Department of Transportation banned the phones from all flights travelling in and out of the US, and takes effect from midnight tonight... Read more

Top Packer executive among Crown employees detained in China. Chinese authorities have detained 18 employees of billionaire James Packer's Crown Resorts, including three top Australian executives, in a co-ordinated police operation targeting the gaming giant's marketing activities in China... Read more

Former Telstra chairwoman Catherine Livingstone is to head the board of the company’s biggest bank. Ms Livingstone, already a non-executive director at the Commonwealth Bank, will succeed David Turner when he retires at the end of the year... Read more

After a lot of arm twisting, Westpac's life insurance arm has been outed as the insurer declining one-in-three total and permanent disability (TPD) claims made by its customers. The admission was made hours after the corporate watchdog refused in parliament to reveal the identity of the country's biggest decliner of life insurance claims in TPD... Read more

The Fair Work ombudsman has released a damning report into the experiences of 417 working holiday visa holders, revealing serious exploitation of some backpackers. The report identified particular concerns about the conditions for backpackers who complete 88 days of paid work in regional Australia in order to obtain a second-year visa... Read more

Opinion - Jessica Irvine: Don't worry, low interest rates are working: here's how. Freshman Reserve Bank governor, Philip Lowe, kept interest rates unchanged at his first board meeting as governor this month. Does that mean the Reserve Bank has abandoned its job of supporting the economy?... Read more

International Headlines

U.S. Market Report: Wall St Week Ahead-Investors seek profit turnaround to drive stocks higher. A heavy slate of U.S. corporate earnings could set the course next week for a wavering U.S. stock market. Better-than-expected big bank earnings on Friday somewhat helped shore up Wall Street's confidence, which has been shaken by a rocky beginning to third-quarter reporting season, marred by disappointing results from industrial and healthcare companies... Read more

North/South Americas Market Report: North and South American markets finished mixed as of the most recent closing prices. The Bovespa gained 1.06% and the S&P 500 rose 0.02%. The IPC lost 0.08%... Read more

European Market Report: European markets finished broadly higher on Friday with shares in Germany leading the region. The DAX is up 1.60% while France's CAC 40 is up 1.49% and London's FTSE 100 is up 0.51%... Read more

Asian Market Report: Asian markets finished higher on Friday with shares in Hong Kong leading the region. The Hang Seng is up 0.88% while Japan's Nikkei 225 is up 0.49% and China's Shanghai Composite is up 0.08%... Read more

The U.S. budget deficit as a share of the economy widened for the first time in seven years, marking a turning point in the nation’s fiscal outlook as an aging population boosts government spending and debt. Spending exceeded revenue by $587.4 billion in the 12 months to Sept. 30, compared with a $439.1 billion deficit in fiscal 2015, the Treasury Department said Friday in a report released in Washington... Read more

Investors will have to wait a little longer to see Yahoo execs grilled over the Verizon acquisition drama. Yahoo said Friday that it will not hold a conference call with analysts when it releases its quarterly earnings results next week. The decision, unusual for a public company, was chalked up to its pending deal to be acquired by Verizon... Read more

The outcome of a two-and-a-half-year legal battle between Goldman Sachs and Libya's $67 billion sovereign fund is a triumph for the Wall Street giant, which was vindicated despite embarrassing revelations about how some of its bankers conducted business. The London High Court found in favor of Goldman Sachs on Friday, with Judge Vivien Rose dismissing the fund's arguments, made over the course of a bruising seven-week trial... Read more

Deutsche Bank is studying a possible change of its strategy in the United States, where it is fighting a $14 billion fine the Department of Justice (DoJ) is requiring over the sale of toxic mortgage bonds before the financial crisis, two sources close to the company said on Saturday. They said that while abandoning the United States, its most important market, altogether was very likely out of the question for the bank, it could consider scaling down its activities, so as to focus more on the needs of German corporate clients overseas... Read more

Booming property auctions lift Brexit gloom in British real estate... Read more

U.K. Prime Minister Theresa May is coming under mounting pressure to reveal her Brexit strategy before she triggers formal negotiations to leave the European Union. A cross-party group of legislators this weekend demanded that the government publish a “substantive outline” of its plans and submit it to a vote in Parliament before invoking Article 50 of the Lisbon Treaty, the formal mechanism for withdrawing from the EU... Read more

Nordea Bank’s Stable Return fund, Europe’s fastest growing asset manager, is betting the British pound is now on its way up. It’s a shift of strategy from earlier this year, when the 20 billion-euro ($22 billion) fund bet against sterling using the yen. It profited from that wager, with the pound losing 28 percent this year against the Japanese currency as Britain voted to leave the European Union... Read more

Germany says Tesla should not use 'Autopilot' in advertising... Read more

Greece's lenders to launch new review as Athens digs in on debt relief... Read more

Just a few years ago, the Swedish economy was likened to Pippi Longstocking -- the fictional girl who is so strong she can lift her own horse. That metaphor is now looking threadbare. The currency is in a near free fall and problems are mounting for one of its bellwether companies, network giant Ericsson AB. The country may find it increasingly difficult to fight gravity in a sclerotic world economy.... Read more

Watchdog says about 15 Swiss banks in money laundering 'red zone': SonntagsZeitung. Roughly 15 Swiss banks are in a "red zone" of lenders particularly exposed to money laundering risks, the head of Swiss banking watchdog FINMA said in a newspaper interview published on Sunday. Swiss federal prosecutors last week said that they have opened criminal proceedings against Zurich-based Falcon Private Bank for alleged failure to prevent suspected money laundering linked to Malaysia's scandal-tainted 1MDB fund... Read more

Italy’s Biggest Bank Merger Since 2007 Wins Investor Backing. The approval of Italy’s biggest banking merger in almost a decade marks a first step in a process of consolidation urged by regulators, investors and Prime Minister Matteo Renzi. But plenty of obstacles remain to further deals among the country’s beleaguered lenders... Read more

5 reasons why Russia's pivot to Asia is more serious than you thought. Despite falling trade figures between Russia and Asian countries, analysts are optimistic about the medium to long term. There is a growth in Russian food exports to the continent, and new logistics projects have been set up to take advantage of trans-shipment opportunities in Eurasia. Russians have also developed a more pragmatic attitude when it comes to doing business with Asian countries... Read more

China backs Brics nations despite global uncertainty. China's president has said the long-term prospects of the Brics countries - Brazil, Russia, India, China and South Africa - are still positive despite a precarious global economy. President Xi Jinping said the Brics countries were among those currently enduring slower economic growth.... Read more

Logistics company ZTO Express has set terms for what could be the largest U.S. initial public offering this year and also the biggest by a Chinese company after the $25 billion (20.10 billion pounds) IPO of e-commerce giant Alibaba Group Holding Ltd (BABA.N) in 2014. ZTO's IPO later this month, which could raise as much as $1.5 billion, is the latest example of a Chinese company seeking to capitalize on its growth prospects to lure Western investors, while also avoiding the red tape associated with launching IPOs in mainland China... Read more

A German battery maker which allows people to store and pool electricity said it has secured 76 million euros ($85 million) from venture capital investors, including Chinese wind turbine and energy management group Envision, to develop its systems. Start-up sonnen, formerly Sonnenbatterie, said in a statement on Sunday it plans to use the money to expand in Italy, Australia, the United States and Britain... Read more

Theresa May to visit India in signal of trading priorities post-Brexit. Minister denies a future free trade agreement with Delhi would entail UK leaving single market and customs union. Theresa May is to fly to India next month for her first bilateral trip outside the EU since becoming prime minister, with her reception there seen as a key test of her ability to win backing for the UK’s future trading environment... Read more

Windfall for startups? Saudi Arabia backs new $100 billion tech fund... Read more

Opinion - Liam Halligan: Let sterling slide - what matters now is QE. The pound has had a slightly less volatile week. While dipping back below $1.20 on Tuesday, sterling has recovered to just under $1.23 at the time of writing... Read more

Opinion - Larry Elliott: Let the pound fall and the economy rise. The Brexit trade-off of weaker currency, cheaper exports will make the economy less dependent on consumers and more reliant on producers... Read more

Latest reports

Latest reports

Blog snapchat