ASB Securities Morning Brief for Tuesday, 14 April 2015
Tuesday, 14 April 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose, led by Pacific Edge after a report about its medical testing products was published in a prominent medical journal. Genesis Energy and MightyRiverPower fell as investors looked to book recent gains. The NZX 50 Index rose 0.186 points, or 0.003 percent, to 5847.356. Within the index stocks were mixed as 17 rose, 22 fell and 11 were unchanged. Turnover was $94.6 million... Read more

The New Zealand dollar rose to a record against the euro as Greece's looming debt payments, subdued economic data and quantitative easing by the European Central Bank weakened the common currency. The kiwi rose as high as 71.15 euro cents and traded at 70.89 cents at 5pm in Wellington from 70.10 cents late yesterday. It rose to 75.70 US cents from 75.51 cents... Read more

PM's Budget hint: 'Surplus in sight but it'll be tight'. Prime Minister John Key believes a surplus is still possible but the Government will not deliver a slash-and-burn Budget to get one... Read more

Retail spending remained brisk last month, with electronic card transactions in the core retail sector, which excludes vehicle fuels, rising 0.8 per cent on February, seasonally adjusted... Read more

Prime Minister John Key has again denied there is a housing crisis or bubble developing in Auckland, despite figures from Barfoot and Thompson last week showing average prices hitting record highs of over NZ$1 million in the old Auckland Council area of the isthmus and the Government itself seeing a supply shortage in Auckland of more than 20,000 dwellings... Read more

Prefab homes get green tick. Prefabricated homes offering up to 15 per cent reductions in building costs are gaining a powerful boost from a green think-tank seeking sustainable ways of tackling the housing crisis. Time savings and waste minimisation are also cited by the Pure Advantage group of prominent Kiwis such as The Warehouse founder Sir Stephen Tindall and Ngai Tahu leader Sir Mark Solomon, which is today re-launching its website with an in-depth study of prefab housing... Read more

New Zealand’s financial services sector can learn what not to do from Australia, it has been claimed. David Boyle, investor education group manager at the Commission for Financial Capability has returned from a forum in Australia where the country’s industry challenges were discussed... Read more

Is there a vigorous internal debate going on at the Reserve Bank of New Zealand (RBNZ) over the direction of the next Official Cash Rate (OCR) move? Yes, according to Christian Hawkesby, a director and head of fixed interest and economics at Harbour Asset Management... Read more

A debt recovery claim filed in the UK courts by the New Zealand Superannuation Fund and 11 other claimants against Portugese bank Novo Bank is demanding repayment of US$612.7 million including default interest. Of that, some US$155 million is owed to the New Zealand fund... Read more

Kiwibank's sister company Kiwi Capital Funding Limited is considering making an offer of up to $150 million of perpetual capital notes to the New Zealand public.... Read more

Fonterra confirms $250m bond offer... Read more

Lack of corporate bonds causing concern. A search for yield in a low-interest rate environment is driving demand for an increasingly tight supply of corporate bonds.... Read more

Big dry drags on for southern farmers. Ministry for Primary Industries monitoring situation as Marlborough and Canterbury await end to drought... Read more

The rural property market has remained remarkably resilient in the face of lower farm-gate prices and dry summer conditions, with prices - by some measures - returning to pre-global financial crisis levels, ANZ says... Read more

Farmers facing labour shortages say immigration criteria is "too tough" for migrant workers plugging the gap. High numbers of farmers had approached Federated Farmers Southland with concerns about visas for their migrant worker employees, regional president Russell Macpherson said... Read more

Springpark developer Gapes liquidates 'unused entity' as part of tidy up... Read more

NZ Oil & Gas awaits word of Cue board positions after securing 48% stake... Read more

Two pioneers of the telco sector and founders of the country's third-largest telco and broadband provider, CallPlus, have sold the company for $250 million to Australian business M2... Read more

Trilogy International has been asked by the New Zealand stock exchange to explain a large increase in its share price in just a few days. The NZX issued a ‘please explain’ note to the skincare products and scented candle maker this afternoon, enquiring about a 25% increase from $1 at market close on April 10 to $1.25 this morning... Read more

One of the country's wealthiest tribes is preparing for the first stage of its biggest land development push. Tainui Group Holdings is about to lodge resource consent applications with the Hamilton City Council for the first stage of its $3.3 billion Ruakura inland freight hub.... Read more

Zoomy, the taxi booking, tracking and payment company, is pleased to announce it has now secured long-term funding to expand in the Australian and New Zealand markets, and become the new standard in customer choice and experience when dealing with reputable taxi companies... Read more

Buyers eye eHome NZ as creditors chase $13.9m... Read more

Ticket sales for the Cricket World Cup were better than expected with tens of thousands of tickets sold overseas, and surprisingly the United States was one of the big four markets. A total of 325,000 tickets were sold for the Cricket World Cup... Read more

New Zealand could strike a part-hosting deal for the multi-billion dollar Fifa World Cup, the 2011 Rugby World Cup organising committee’s former head says. Martin Snedden believes co-hosting the tournament is a realistic goal given New Zealand’s success with the Rugby World Cup in 2011 and this year’s co-hosting of the ICC Cricket World Cup... Read more

Wellington trolley buses demise to cost more than expected. Plans to ditch Wellington's trolley bus network are going to cost more than expected, with the bill as high as $40 million.... Read more

McDonald's has decided to follow the lead of Restaurant Brands and is offering to ditch so-called zero hour contracts. The owner of KFC and Pizza Hut last week announced it would no longer employ people on those contracts... Read more

McDonald's staff to strike as over 'meaningless' contracts... Read more

Property Council is proud to welcome Peter Mence, chief executive of Argosy Property Limited as its new National President.... Read more

Tainui Group Holdings chief says goodbye. After eight years at the helm of one of Waikato's biggest businesses, Mike Pohio is ready to move on to other challenges. The chief executive of Waikato-Tainui's commercial development arm, Tainui Group Holdings, will walk out of the organisation's Bryce St office for the final time today - at least in his current role... Read more

Capital + Merchant settlement dispute back in court. The thousands of investors eyeing up what might be the last avenue of recovery in the collapse of Capital + Merchant face further delay after a settlement dispute went back to court today... Read more

A fight has erupted over one of New Zealand's biggest leaky building payouts, as 253 owners of a North Shore apartment/hotel tower battle one another. Spencer On Byron apartment owners in Takapuna won $20.05 million, including $10 million from Auckland Council, for the tower's leaks when they won the right to take their case to the Supreme Court... Read more

A lawyer and a litigation funder are looking to organise group legal action against insurers in the wake of the 2010/11 Canterbury earthquakes. A partner at Shieff Angland Lawyers, Kalev Crossland, and Bruce Sheppard, a director of litigation funders LPF Group and best known as founder of the New Zealand Shareholders’ Association, are planning to help property owners sue their insurers... Read more

Opinion - David Hargreaves: Double housing bubble toil and trouble... Read more

Australian Headlines

Australian Market Report: Australian shares fell away from the elusive 6,000 point threshold as soft mining stocks and disappointing data from China held back the benchmark index from crossing the psychological barrier. After touching 5996.4 in early trading, the benchmark S&P/ASX200 index fell 0.1% to 5,960.3, after China’s trade surplus fell 62% in March.... Read more

The Australian dollar has continued its retreat in offshore trade, falling to within 0.2c of a new post-crisis trough as data out of China painted a more negative picture for growth in the world's second largest economy. At 3.30am (AEST), the local unit was trading at US75.82c, down from US76.01c on Monday. Over the past 24 hours the currency has seen a high of US76.68c and a low of US75.52c, desperately close to the six-year low of US75.34c set last month... Read more

RBA guessing game gets harder as economy hits the skids. If you think the economy is struggling at the moment, spare a thought for those eking out an existence predicting what's going on and, in particular, trying to second guess the Reserve Bank's efforts to keep things ticking over in a not-too-hot, not-too-cold sort of a way... Read more

Trade Minister Robb under pressure to reveal details so far of TPP 12-nation pact. It's a treaty aimed at including Australia in a powerful trade bloc of 12 nations generating 40 per cent of the world’s economy — and it’s being negotiated in secret. The proposed Trans-Pacific Partnership (TPP), which has been labelled ‘the dirtiest deal you’ve never heard of’ by Australian action group GetUp, has roused anger and apprehension on both sides of the ocean... Read more

The former chairman of the Business Council of Australia, Tony Shepherd, has questioned the Coalition’s focus on the revenue side of the budget, pressing the case that expenditures remain out of control compared to the economy’s trajectory, The Australian Financial Review reports... Read more

Social Services Minister Scott Morrison isn't ruling out a tightening of the assets test to limit payment of the aged pension to some well-off older people. Mr Morrison said discussions were continuing with Senate crossbenchers including Independent Senator Nick Xenophon and Liberal Democrat David Leyonhjelm... Read more

Auction frenzy as Sydney keeps leading Australian property prices higher. Australian real estate shows no sign of slowing down, with 79 per cent of auctioned properties sold last weekend.... Read more

Colin Barnett's threat to "disengage" from the rest of the country if Western Australia doesn't get a bigger slice of the GST is ridiculous and irrational, the opposition says. The premier told News Corp Australia that WA was facing its "tea party moment", reportedly saying his government would consider refusing to sign up to federal-state agreements... Read more

Iron ore surges despite pessimism... Read more

The fallout from plunging iron ore prices is threatening the future of a growing number of companies, with several warning investors of potential problems. Atlas Iron is the first prominent victim, deciding to shut down its mining operations by the end of April... Read more

Rio Tinto to move IT systems to public cloud... Read more

Atlas Iron: Pilbara town Port Hedland bracing for impact of mine shutdowns. Businesses in the Western Australian mining town of Port Hedland are bracing for the impact of a decision by iron ore miner Atlas Iron to mothball its operations there.... Read more

Fortescue Metals is down 3% at a 6-year low of $1.76. The break of $1.80 today clears the way for a test of the 2008 low at $1.16... Read more

Latrobe Magnesium is developing a magnesium production plant in Victoria's Latrobe Valley using its world-first patented extraction process... Read more

Copper and gold miner Oz Minerals plans to release the outcome of a company wide review later in April as it looks to cut costs due to a downturn in commodity prices. Chief executive Andrew Cole said it was challenging to build long term value in an environment increasingly fixated on very short term gains... Read more

Thomson Resources has revealed the acquisition of a significant tin exploration project consisting of two exploration licences near the Ardlethan Mine in New South Wales... Read more

A legal showdown over the giant Hope Downs iron ore mines could become a three-way shootout after the heirs of late Pilbara prospector Don Rhodes were given the go-ahead for claims potentially worth more than $100 million... Read more

Rumble Resources appoints Nathan Tinkler as corporate advisor... Read more

Deutsche Bank has won a mandate to sell Quadrant Private Equity’s stake in APN Outdoor at $3.31 per share in a $54.9 million deal.... Read more

Shares in biotech Mesoblast have surged after US-based Celgene Corporation bought a stake worth $58.5 million.... Read more

Pollution generated by Tassal's salmon farms in Tasmania has fallen 15 per cent, the company says, amid opposition to the environmental impact of the expanding industry. Critics have claimed waste and uneaten feed from salmon farms are polluting waterways, and the Tasmanian Abalone Council has said that is causing a reduction in the number of abalone that can be harvested... Read more

Ryan Stokes named Seven Group chief as Don Voelte steps down... Read more

Queensland banana growers to get disease update. Queensland authorities are meeting with banana growers to discuss the seriousness of destructive fungus outbreaks for their industry. The soil-borne Panama TR4 fungus, which destroyed the NT's banana industry in the 1990s, has been found on two banana farms in far north Queensland... Read more

CBA funds defamation action against consumer advocate Michael Fraser. A consumer advocate who was spied on by the Commonwealth Bank now faces a legal action that should send shivers down the spines of whistleblowers around the country. The bank is funding a defamation action filed against the advocate, Michael Fraser, by a senior executive at the bank... Read more

Woman takes on IBM and loses $150,000 in return-to-work case. A young mother who complained that multinational technology giant IBM had overloaded her with work after she returned from maternity leave has been ordered to pay $150,000 in costs after losing her court battle... Read more

Opinion - Tristian Edis: The hidden agenda behind the NSW gas crisis hysteria... Read more

Opinion - Elizabeth Knight: Kerry Stokes passes Seven Group Holdings management to son Ryan... Read more

Analysis - Ry Crozier: Dallas Buyers Club pirates could be told to 'name a price'... Read more

Opinion - Mike Callaghan: Why a 'Google tax' is not the answer. Can tax laws keep up with globally operating businesses and constant technological change? This is a fundamental challenge confronting governments... Read more

International Headlines

U.S. Market Report: U.S. stocks rose on Monday boosted by technology shares, with Facebook and Apple lifting the Nasdaq Composite to near its record high. Apple shares rose after reports the Apple Watch received about a million orders in its debut. Facebook gained 2 percent in its largest gain in more than three weeks. Corporate earnings season was poised to kick into high gear with a slew of reports this week... Read more

North/South Americas Market Report: North and South American markets are mixed today. The IPC is up 0.31% while the Bovespa gains 0.20%. The S&P 500 is off 0.13%... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The CAC 40 gained 0.26%, while the FTSE 100 led the DAX lower. They fell 0.36% and 0.29% respectively... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Hang Seng gained 2.73% and the Shanghai Composite rose 2.17%. The Nikkei 225 lost 0.01%... Read more

Oil prices rose in Asia Monday, extending last week's gains but the persistent global supply glut will likely cap advances, analysts said. US benchmark West Texas Intermediate added 11 cents to $51.75 while Brent was up 12 cents at $57.99 in afternoon trade... Read more

OPEC publication urges non-members to help stabilize oil market. OPEC has criticized unidentified non-member countries for their refusal to cooperate with the oil exporter group in propping up prices and repeated its call for them to do so... Read more

IEA sees sharp rise in Iran oil output in 3-5 years post nuclear deal. World oil markets will not see a significant rise in Iranian supplies for up to five years even if the OPEC member and world powers clinch a final nuclear deal by end-June, Fatih Birol chief economist and future head of International Energy Agency (IEA) said... Read more

Falklands oil exploration stalled amid falling oil price... Read more

Saudi Arabia’s Plan to Extend the Age of Oil. The biggest exporter has let prices plummet—delaying the day when climate concerns, efficiency, and fuel switching break the world’s dependence on crude.... Read more

The drop in big oil companies' profits in the past eight months isn't just a function of lower crude prices – it also reflects strategic choices. A Reuters examination of corporate filings by some of the biggest players in the industry, including BP, Shell and France's Total, shows the sensitivity of these companies' earnings to changes in oil prices has risen in recent years.... Read more

Fed's Williams sees less risk of rate retreat after lift-off... Read more

The California Public Employees’ Retirement System’s performance fees to Wall Street firms rose 6 percent last year to $420 million as the value of its portfolio gained 18 percent... Read more

What to look for in J.P. Morgan’s earnings. J.P. Morgan Chase & Co. is expected to report its first-quarter results before the market opens Tuesday. Here’s what you need to watch:... Read more

ConocoPhillips is preparing the sale of noncore oil and gas producing acreage in the United States, in the latest sign that oil majors are becoming more accepting of lower oil prices, according to people familiar with the matter... Read more

Pepsi to replace Coke as NBA's official sponsor. Pepsi said Monday that it had signed a new marketing deal with the National Basketball Association as the league's exclusive food and beverage sponsor, replacing Coke, which held the sponsorship for 28 years... Read more

Apple Inc is likely to quickly ramp up production of the Apple Watch after strong pre-orders outstripped limited supply, analysts said on Monday. Apple's website lists shipping times in June for some models, and four to six weeks for others, suggesting the company is straining to meet demand. Apple shares were up 0.7 percent at $127.95 in morning trading on the Nasdaq.... Read more

GE’s Pivot From Finance Sets Up Immelt for Industrial Deals. Jeffrey Immelt, poised for the biggest restructuring push on his watch at General Electric Co., is plotting acquisitions to complement an industrial portfolio spanning jet engines to locomotives to oilfield equipment.... Read more

Time running out on Greek debt talks, says top EU official... Read more

Greece casts shadow as ECB money printing buoys euro zone. European Central Bank policymakers gathering on Wednesday will examine possible further emergency funding for Greece's banks as they take stock of a wider economic picture showing early signs of improvement... Read more

UK budget hotel chain Travelodge has reported a surge in profits of more than 60%, three years after its near-collapse. It comes as Travelodge's owners are thought to be preparing to sell it for a potential £1bn... Read more

Austria is not prepared to provide unlimited help to the province of Carinthia as the region comes to grips with its debt guarantees for the "bad bank" Heta, Finance Minister Hans Joerg Schelling told the magazine Der Boersianer... Read more

A Paris court on Monday found the heiress of the Nina Ricci perfume and fashion business guilty of tax fraud in a high-profile trial prompted by leaked lists of people who used the services of HSBC bank in Switzerland. Arlette Ricci, 73-year-old granddaughter of Nina Ricci, was sentenced to three years in jail, including two suspended, and ordered to pay a fine of 1 million euros ($1.05 million) in a verdict read out by a judge at a criminal court... Read more

Russia paved the way on Monday for missile system deliveries to Iran and started an oil-for-goods swap, signaling that Moscow may have a head-start in the race to benefit from an eventual lifting of sanctions on Tehran. The moves come after world powers, including Russia, reached an interim deal with Iran this month on curbing its nuclear program... Read more

Online home improvements company Houzz moves into Russian market... Read more

Brazil's iPhone investment falls short on promises of jobs, lower prices.... Read more

The Chinese government has said Taiwan will not be a member of a new regional bank, but would be welcome in the future under a different name. China is leading the set-up of the Asian Infrastructure Investment Bank, a project opposed by the US... Read more

China's March exports shrink 15 percent year-on-year in shock fall... Read more

Modi’s Pointed Remarks in Germany: ‘Make in India’ Is Not a Brand... Read more

Indian e-commerce giant Flipkart has decided it doesn’t need to rely on the Web to lure shoppers, dumping its mobile site and pushing visitors to its app. That move may spell trouble for the future of Google 's cash-cow search engine, which relies heavily on links to shopping sites... Read more

India's inflation rate fell to a three-month low last month, official figures have shown. Inflation as measured by the Consumer Price Index (CPI) fell to 5.17%, down from February's figure of 5.37%. Better weather has meant agricultural harvests have been more controllable, stabilising the price of food... Read more

Opinon - Peter Spence: Why the UK's 'other deficit' has economists scared The current account deficit has become a cause for concern for investors, as analysts warn that it could cause the pound to lose strength... Read more

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