ASB Securities Morning Brief for Thursday, 26 March 2015
Thursday, 26 March 2015

New Zealand Headlines

New Zealand Market Report: New Zealandshares fell, led by Fonterra Shareholders' Fund, after the world's biggest dairy exporter lowered its guidance for dividends. Spark New Zealand and Fletcher Building paced the decline after shedding rights to their dividends. The NZX 50 Index fell 12.757 points, or 0.2 percent, to 5857.782. Within the index was mixed, 18 stocks fell, 18 rose and 14 were unchanged. Turnover was $128 million... Read more

The New Zealand dollar rose as the nation's relatively appealing interest rates drew investors who had unwound long US dollar positions following last week's Federal Reserve Open Market Committee meeting. The kiwi edged up to 76.36 US cents as at 5pm in Wellington, from 76.28 cents yesterday. The trade-weighted index eased to 79.47 from 79.53.... Read more

$2.2b trade deficit biggest in more than five years... Read more

Japan and New Zealand share the view that a fast-track trade bill in the United States is extremely important for the conclusion of a 12-nation Trans-Pacific Partnership (TPP) deal, the Japanese economy minister said on Wednesday... Read more

Banks still sticking well under the 10% limit on high LVR lending despite the resurgence of the housing market... Read more

Competition among banks for airpoints credit cardholders heats up as Westpac replaces BNZ. ANZ, Westpac and Kiwibank are swooping in, targeting a share of the about 100,000 BNZ customers who will no longer be able to earn airpoints via their credit cards... Read more

ANZ to launch solo mobile wallet in the second-half of this year using host card emulation technology... Read more

New Zealand farmer confidence rebounded in the first quarter of this year, led by improved optimism among dairy farmers. A net 13 percent of farmers were confident in the outlook for the agricultural economy in the first quarter, from a net 15 percent who were negative about the outlook in the fourth quarter of last year, according to Rabobank's latest rural confidence survey... Read more

Synlait lifts milk forecast while Fonterra reaffirms its one, trims dividend... Read more

Fonterra has held its farmgate milk price forecast for farmers at $4.70 per kilo of milk solids after reporting a 16% fall in half-year profit. The dairy giant says it has left the forecast unchanged due to the continued volatility in international prices and the fall in its profit... Read more

Expectations that a higher dividend from Fonterra would at least partly offset a low milk price went by the wayside yesterday when the co-operative lowered its dividend forecast range for the current year and reported a 16 per cent drop in its first half net profit to $183 million... Read more

The body representing Fonterra's farmer shareholders says it is "disappointed" by the announced lowering by Fonterra of its dividend forecast. Fonterra says it is retaining its forecast milk price for the current season of $4.70 per kgMS, but is reducing its forecast dividend to possibly as low as 20c from a previous low forecast of 25c on the back of half-year results "below our farmers' expectations"... Read more

Farmers told to keep their budgets tight... Read more

Fixing under-performing businesses in Australia is a key part of Fonterra Cooperative Group’s renewed push to drive more value from transforming the business, particularly when low global milk prices depress its payout to farmers... Read more

Nufarm, the agricultural chemicals manufacturer, reported a 14 percent drop in its New Zealand sales as the South Island drought and the decline in global dairy prices weighed on demand for pesticides and herbicides. Shares of Nufarm, which is listed on the ASX, fell 1.7 percent to A$6.82. The stock is rated an average of 'hold' based on 11 analysts surveyed by Reuters, with a median price target of A$5.81... Read more

Technology firm Straker Translations is preparing for a listing on stock exchange operator NZX's soon-to-launch NXT market, through which it hopes to raise growth capital as it pushes towards becoming the "Uber of the translation industry"... Read more

A new production well at the offshore Taranaki Maari oil field has started producing at about 7800 barrels a day, according to a field partner, Cue Energy... Read more

Queenstown has been named the number one destination in both New Zealand and the South Pacific in TripAdvisor’s 2015 Travellers’ Choice Awards. As well as taking out the top spot in the South Pacific and New Zealand, Queenstown has also been rated as one of the world’s top 25 destinations... Read more

Unitec staff and students have teamed up with Japan's National Institute of Information and Communications Technology to develop an internet security system designed to alert users as soon as a breach has been detected... Read more

Reserve Bank deputy governor made chairman of OECD’s financial markets committee... Read more

Hamish Bohannan has resigned from Bathurst Resources after five years leading a coal miner whose expansion has been put on hold pending a recovery in coal prices... Read more

A real estate agency has been fined for mishandling money in its trust account, including paying deposits to the wrong person and allowing the account to be overdrawn. It was only through good luck that the "startling number of errors" at Richardsons Real Estate Ltd didn't result in severe financial problems for clients, the industry regulator said... Read more

New Zealand Herald Editorial: No excuse for mayor's stand on port plans... Read more

Opinion - Gareth Vaughan: Time to cut floating mortgage rates... Read more

Opinion - Franceska Banga: Creating our own Silicon Valley. Venture capital and Government support are crucial, writes Franceska Banga... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket closed slightly stronger after a volatile day, as investors continued to await a catalyst to drive the local bourse through the 6000 points mark. At the 4.15pm (AEDT) official market close, the benchmark S & P/ASX200 index was up 4.2 points, or 0.07 per cent, at 5973.3, while the broader All Ordinaries index added 2.6 points, or 0.04 per cent, to 5937.1.... Read more

The Australian dollar has hit a two-month high despite better than expected economic data out of the US, as currency markets are racked with volatility. At 4.30PM (AEDT), the local currency was trading at US78.74 cents, up from US78.67 cents yesterday. The Australian dollar bounced as high as US79.38 cents overnight, its highest level since January 28... Read more

RBA says too early to judge APRA's home loan restrictions... Read more

The financial stability of Australian businesses is on the improve as companies watch their spending and borrow less. But challenges remain for businesses in the commercial housing and resources sector... Read more

Australia ready to join China-led bank, seeks clarity on governance... Read more

Just when you thought there was no room to squeeze any more development into our crowded cities, the Australian Bureau of Statistics has released figures which tip the number of households to increase by 4.3 million in the next 25 years.... Read more

Retail deal slashes weekend penalties in SA... Read more

SMEs will hail budget support: MYOB... Read more

The Reserve Bank fears that the huge demand among property investors for Australian homes could ultimately cause prices to slump. Investors have been driving housing demand in recent years, particularly in Sydney and Melbourne, pushing prices to record levels... Read more

The search for the high life continues in Brisbane with inner-city apartment sales skyrocketing.... Read more

The growing gap between what Australians earn and what they're paying for property will become a concern if it continues for much longer, analysts say. In its annual mortgage report on Wednesday, consultancy firm Deloitte said stellar price gains seen in the Sydney and Melbourne housing markets would remain strong through 2015, at a time when wages were growing at a snail's pace... Read more

Foreign investment: Chinese investors seeking greener pastures eye Australia's real estate market.... Read more

Watchdog investigates iron ore cap talk. Calls by Andrew "Twiggy" Forrest for Australia's biggest iron ore miners to cap production are being investigated by the competition watchdog amid concerns about potential cartel behaviour. Australian Competition and Consumer Commission chairman Rod Sims is urging the Fortescue Metals chairman to explain his comments, which may have breached the law in relation to cartel conduct... Read more

Fortescue Metals Group chief executive Nev Power has clarified that comments made by chairman Andrew Forrest in relation to big miners restricting output were intended to draw attention to the fact that there is provision within the Competition and Consumer Act that deals with goods exclusively exported... Read more

BC Iron is pushing ahead with its cost cutting efforts after signing a new mining contract at its Nullagine joint venture in WA. The Pilbara iron ore miner has lowered its all-in cash cost target to $47 to $51 per wet metric tonne, down from $54 to $61, after awarding a mining and crushing contract to Viento Contracting Services for the Warrigal hub... Read more

OM Holdings has sold a 5% interest in Sarawak smelter project in Malaysia to joint venture partner Samalaju Industries Sdn Bhd for US$18.45 million... Read more

Viento soars on $40m BC contract... Read more

MRG Metals to start drilling at Western Australia PGE and gold project... Read more

There will be no changes to mineral royalty rates in this year's West Australian state budget, and questions are now being raised about cash already booked for the revenue source. After a review of the state's royalty system, mines and petroleum minister Bill Marmion said on Wednesday that 18 recommendations had been "noted" but none would be adopted in 2015/16... Read more

Covata Limited has been granted an ASX trading halt in relation to a material transaction granting a global licence to a major industry participant and the conversion of performance shares... Read more

Global investment manager BlackRock may have been behind a recent spike in the share price of engineering contractor Monadelphous. BlackRock revealed today it had mistakenly lifted its stake in Monadelphous from 10.99 per cent to 20.77 per cent, above the 19.9 per cent forced takeover limit... Read more

The clean energy sector has moved to break the political impasse over a pared-down renewable energy target by putting a middle ground compromise on the table. The Clean Energy Council, the peak renewables industry body, has written to both Prime Minister Tony Abbott and Opposition Leader Bill Shorten, proposing a target of 33,500 gigawatt hours... Read more

Analysts at Macquarie believe GPT Group could become involved in mergers and acquisitions activity in office property segment, given its strong balance sheet. The listed property trust has a low gearing ratio at 26.3 per cent and investment capacity of $2.4 billion across its funds, they estimated... Read more

TPG begins charm offensive on iiNet founder Michael Malone... Read more

Agricultural chemicals and seeds supplier Nufarm wants to boost its presence in Asia. Nufarm acting chief executive Greg Hunt says Asia is a work in progress for Nufarm. Shares in Nufarm closed 18 cents lower at $6.76.... Read more

Australia's two biggest rating radio stations are now part of the one company after Macquarie Radio Network's shareholders voted to merge with Fairfax Media's radio network. The $200 million combined company will operate Macquarie Radio's 2GB in Sydney whose hosts include Alan Jones and Ray Hadley and Fairfax's 3AW in Melbourne... Read more

The Reject Shop's veteran chief information officer Darren O'Connor will work his last day on Thursday after deciding to take his leave from a company that has been his home for the past 14 years... Read more

MyState appoints KPMG IT exec to lead tech... Read more

Australian companies failing to report suspected corruption. Self-reporting to authorities of suspected foreign bribery and corruption by Australian companies is failing to occur, with top accounting firm Deloitte revealing it has investigated at least 100 potentially illegal acts involving local firms in the past two years... Read more

Australia's peak union body will ask the workplace regulator to increase compulsory superannuation for workers on the minimum wage. The Australian Council of Trade Unions (ACTU) is pressing the case for a rise in super and the minimum wage in its submission to the Fair Work Commission's annual wage review... Read more

Opinion - Gary McLaren: TPG, iiNet and the ACCC's big decision... Read more

Opinion/Analysis - Miranda Maxwell: Is David Murray the only one worried?... Read more

International Headlines

U.S. Market Report: Wall Street stocks and the dollar slipped on Wednesday as government data signaled the U.S. economic expansion was slowing, while gains in the euro prompted a pullback in European stock markets. Wall Street's Dow Jones industrial average .DJI was down 88.71 points, or 0.49 percent, at 17,922.43. The Standard & Poor's 500 Index .SPX was down 7.09 points, or 0.34 percent, at 2,084.41. The Nasdaq Composite Index .IXIC was down 50.75 points, or 1.02 percent, at 4,943.97... Read more

North/South Americas Market Report: North and South American markets are lower today with shares in U.S. off the most. The S&P 500 is down 0.85% while Mexico's IPC is off 0.84% and Brazil's Bovespa is lower by 0.50%... Read more

European Market Report: European markets finished broadly lower today with shares in France leading the region. The CAC 40 is down 1.32% while Germany's DAX is off 1.17% and London's FTSE 100 is lower by 0.24%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Hang Seng gained 0.59% and the Nikkei 225 rose 0.17%. The Shanghai Composite lost 0.83%... Read more

Oil prices rose on Wednesday, tracking a weaker dollar despite U.S. government data showing a higher-than-expected build in crude inventories last week. Brent LCOc1 was up 63 cents at $55.74 a barrel by 12:07 a.m. EDT (1607 GMT). U.S. crude CLc1 gained 74 cents to $48.25.... Read more

Oil prices were mixed in Asia Wednesday ahead of the release of US stockpiles data, a closely watched barometer of demand in the world's biggest consumer of the commodity, analysts said. US benchmark West Texas Intermediate fell 12 cents to $47.39 and Brent was up five cents at $55.16 in afternoon trade.... Read more

Gold nears $1,200, eyes 6th straight session gain... Read more

Weak U.S. business spending data points to tepid first quarter growth... Read more

Applications for U.S. home mortgages rose last week as interest rates dropped to their lowest level since February, an industry group said on Wednesday... Read more

First New York Securities LLC manipulated company stocks with illegal short sales less than two years after having been fined for similar misconduct, the industry’s self-regulator said... Read more

Fed's Evans says strong dollar 'disinflationary', possibly transitory... Read more

SEC's White says 'closely monitoring' proxy access efforts. Securities and Exchange Commission Chair Mary Jo White told lawmakers on Tuesday the agency would not try anew to craft rules to make it easier for shareholders to nominate corporate directors but that she was closely watching activists' attempts to do just that.... Read more

The U.S. Consumer Product Safety Commission today announced it's "actively" investigating Lumber Liquidators laminate flooring, following an episode of 60 Minutes that claimed some of the company's Chinese-made laminates contain high levels of formaldehyde. CPSC Chairman Elliot Kaye said in a teleconference Wednesday that the agency is currently looking only at Chinese-manufactured products, although the investigation could expand... Read more

Hedge fund Standard General has raised its bid to buy about 1,740 stores of bankrupt electronics retailer RadioShack Corp in a court-supervised auction, according to people familiar with the process, which entered its second day on Tuesday... Read more

Amazon blasts FAA for slow action on drone regulation... Read more

US food giant Heinz is to merge with Kraft Foods Group, creating what the companies say will be the third-largest food and beverage company in the US. Shares in Kraft jumped more than 40% on the news... Read more

The Kraft-Heinz merger may spur a takeover of these companies.... Read more

Google Inc hired Morgan Stanley Chief Financial Officer Ruth Porat as its own finance chief, a sign Google is aiming to rein in costs as it invests in new businesses such as self-driving cars and internet-connected eyeglasses... Read more

The short interest in Apple Inc. recently dropped 9.6% to 65.7 million shares, a possible sign that traders who benefit from falling share prices have stepped away from the company as its stock continues to soar... Read more

Top U.S. CEOs reaped billions from stock gains in recent years, Reuters analysis shows... Read more

Trade talks between the US and European Union have been marked by "dog whistle" politics, a group of MPs has warned. The Business Select Committee said debate over the Transatlantic Trade and Investment Partnership (TTIP) had been over-simplified and misrepresented... Read more

The European Union will impose anti-dumping duties from Thursday on imports of cold-rolled flat stainless steel from China and Taiwan, according to a notice on Wednesday in the EU's Official Journal. The EU will apply tariffs of up to 25.2 percent for sheet, coil and strip imports from China and up to 12 percent for Taiwanese product, following a complaint lodged in May 2014 by the European steel producers association, Eurofer... Read more

German business confidence increased for a fifth month in March, adding to signs that Europe’s largest economy is back in position as the region’s economic powerhouse. The Ifo institute’s business climate index, based on a survey of 7,000 executives, advanced to 107.9 from 106.8 in March. The median estimate of 43 economists in a Bloomberg News survey was for an increase to 107.3... Read more

Porsche had a very good year, and it's sharing the wealth with employees. The German sports car company said Wednesday it will give all employees a bonus of 8,600 euros, or about $9,400.... Read more

Italian tyre maker Pirelli, which is being bought by China National Chemical Corp (ChemChina), does not plan to pay a special dividend to its shareholders as part of the buyout plan, two sources with direct knowledge of the matter said. ChemChina is to buy into the world's fifth-largest tyre maker in a 7.3 billion-euro ($8 billion) deal, agreed with Pirelli's biggest shareholders on Sunday, that will put the 143-year-old Italian firm in Chinese hands... Read more

Telefonica finalises £10bn sale of O2 mobile phone firm... Read more

Airbus Group plans to sell a further 17.5 percent stake in business and fighter jet maker Dassault Aviation as it unwinds its 16-year-old link to its defence market rival. After the placement of around 1.61 million ordinary shares, Airbus' stake will drop to about 24.5 percent from 42 percent. Airbus had cut its stake from 46.3 percent in November and said at the time it would make its "best efforts" to sell up to 10 percent more by the end of June through placements... Read more

Former Greek Finance Minister George Papaconstantinou has been found guilty of removing relatives' names from a list of potential Greek tax evaders. But the charge was reduced to a misdemeanour, and he received a one-year suspended prison sentence, escaping a longer term... Read more

In Russia, demand for organic food is growing despite the country's financial and international political crisis. The embargo on importing European foodstuffs, imposed by Russia in 2014, is acting as an incentive for domestic production. Experts also see potential for foreign investment... Read more

The Asian Development Bank Agrees, India is Outpacing China... Read more

Opinion - John W Schoen: Funding Shortfalls Put Pensions in Peril. These days, a pension just isn't what it used to be. For generations, a defined benefit pension—a fixed monthly check for life—provided an ironclad promise of a secure income for millions of retired American workers. But today, that promise has been badly corroded by decades of underfunding that have undermined what was one of the cornerstones of the American dream... Read more

Opinion - Robert Peston: How low can interest rates go?... Read more

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