ASB Securities Morning Brief for Wednesday, 19 October 2016
Wednesday, 19 October 2016

New Zealand Headlines

New Zealand Market Report: New Zealand shares fell again, hitting a three-month low as the main index fell below 7,000 for the first time since July. Summerset Holdings, Genesis Energy and Fletcher Building led the losses. The S&P/NZX50 Index dropped 93.28 points, or 1.3 percent, to 6,973.09. Within the index, 38 stocks fell, nine rose and two were unchanged. Turnover was $158.4 million... Read more

The New Zealand dollar rose after figures showing stronger-than-expected third-quarter inflation reduced the odds that the Reserve Bank will have to make more than one further rate cut during this easing cycle. The local currency rose to 71.85 US cents as at 5pm in Wellington from 71 cents late yesterday. The trade-weighted index rose to 77.10 from 76.44... Read more

New Zealand inflation slowed in the third quarter as a drop in transport-related prices such as vehicle relicensing fees offset higher vegetable and housing-related prices. The consumers price index rose 0.2 percent in the three months ended Sept. 30 for an annual increase which was also 0.2 percent, Statistics New Zealand said. Economists had expected no change in the quarter for an annual 0.1 percent gain, while the Reserve Bank had forecast 0.1 percent and 0.2 percent respectively... Read more

Inflation result won’t stop OCR cut. Inflation was slightly above forecasts in the September quarter, but the result is not likely to deter the Reserve Bank from cutting the OCR next month.... Read more

Market settles into cruise mode. Moderate growth continues to mark house prices but the property market is now levelling off, according to the latest Trade Me Property data.... Read more

Trump win could mean more work for advisers. Advisers are being told they may have to do some extra client hand-holding if the United States elects a President Trump this year – but now could be a good time to cash in wins from New Zealand shares... Read more

Big providers prime targets for automated advice. Big financial institutions already operating in this country are the most likely providers to roll out roboadvice in the near future, says the man behind an online KiwiSaver information and comparison site... Read more

International dairy prices improved slightly at this morning's Global Dairy Trade auction, the GDT price index gaining by 1.4 per cent since the last sale early this month. Wholemilk powder prices, which have the greatest bearing on Fonterra's farmgate milk price, gained by 2.9 per cent to US$2760 a tonne.... Read more

Fonterra Co-operative Group Limited today announced the appointment of a new Independent Director, Scott St John, who will join the Fonterra Board on 1 November 2016. Chairman John Wilson said that world-class governance is one of the Board’s top priorities, and strong support recently from Fonterra’s shareholders to enhance governance at the Co-operative reinforced the intent to attract high quality Directors... Read more

The wife of a senior director at A2 Milk has built a stake of 260,000 shares in the business in a series of trades earlier this month, documents filed to the NZX show. Jillian Margaret Nathan, who is the spouse of Peter Nathan, A2 Milk's chief executive, Australia & New Zealand, spent a total of $485,499 on the shares... Read more

More than 100 jobs are at risk if Silver Fern Farms closes two meat processing sites - a mutton plant at Wairoa affecting 67 workers, and a venison operation at Mossburn in Southland, affecting 43. The axing of the jobs at Mossburn would leave a hole in the community, locals have said, although SFF has stressed there would not be an actual reduction in jobs... Read more

Fletcher Building reiterates 2017 earnings guidance, lifts planned spending on land for housing... Read more

Fletcher Building directors at the annual meeting in Christchurch were quizzed about the company's controversial 480-home Otuataua Stonefields development near Auckland's Manukau Harbour. Otuataua resident and Fletcher Building shareholder Nikki Elder asked chairman Sir Ralph Norris to visit and talk to her community and the group called SOUL (Save Our Unique Landscape)... Read more

PGG Wrightson expects operating earnings to decline this year, snapping three years of growth, amid weakness in some of the key agricultural commodity markets it has exposure to. Operating earnings before interest, tax, depreciation and amortisation are expected to be between $62 million and $68 million in the year to June 30, 2017, down from $70.2 million the year earlier, the Christchurch-based company said in a presentation prepared for its annual meeting today. Net profit after tax is expected to be broadly in line with the 2016 financial year of $39.6 million, it said. PGG Wrightson shares fell 1.9 percent to 52 cents. The stock has gained 28 percent this year... Read more

Oceanagold Corp, the NZX-listed gold miner, says an audit of its Didipio mine by the Philippines' Department of Environment and Natural Resources (DENR) found it was in compliance with its permits but must do more to communicate with stakeholders. Shares in Oceanagold rose 7.2 percent to $4.19 and have gained 49 percent this year.... Read more

A new gold mine in Marlborough faces backlash from iwi who claim it could damage the environment and their cultural history. Ngati Kuia has kaitiaki over the Canvastown area where mining company Elect Mining wants to set up a new operation on 120 hectares of land... Read more

Tourism Holdings said profit in the 2017 year may rise as much as 17% as the campervan rental company benefits from increased visitor numbers and is open to acquisitions which could be funded by debt. Chief executive Grant Webster told shareholders at their annual meeting that first-half profit is expected to rise to $9.5 million from $8.2 million a year earlier, contributing to annual earnings in the range of $27.5 million to $28.5 million, up from $24.4 million last year. The shares fell 2.7% to $3.29 and have surged 54% this year.... Read more

Windflow Technology, the unprofitable wind turbine manufacturer, says it's reducing activity in the UK to the maintenance of its existing fleet due to policy moves away from wind power. There are eight Windflow turbines in Scotland, of which the company has full or majority ownership of six. Windflow entered the UK market six years ago, "six years which have been dominated by market uncertainty, created by several UK policy reviews, delays and reversals," it said in a statement today. The shares last traded at 1 cent, and have dropped 9.1 percent this year.... Read more

Casino company Sky City Entertainment says it is monitoring the situation in China after 18 employees at its competitor, Crown Resorts, were detained by authorities there last week. "Sky City does not have any staff in China, but we do use independent contractors there," a Sky City spokesperson said in a written response to a query from the Herald... Read more

Sales of Weet-bix have soared in China, after the popular breakfast food was featured on an episode of one of China's most watched TV soaps. While Weet-bix has been available in the Chinese market for more than eight years, international marketing manager for Sanitarium, Mark Roper, says the appearance of Weet-Bix on the drama 'Ode to Joy' had an overnight impact on sales... Read more

The chair of the Commerce Commission, Mark Berry, has said he expects the outcome of their ruling on the NZME/Fairfax Media merger proposal to be of international interest. Berry was speaking at the launch of the commission's five-year strategy at Wellington on Tuesday afternoon. He told the audience that the proposal "has presented a number of questions that the commission has never been asked to consider before, specifically around how the merger would impact on issues pertaining to the fourth estate."... Read more

Chorus says it has reached an agreement with the government to extend free non-standard installations until the end of 2019. That is to say, nearly every home will qualify for a free UFB fibre installed for free until the end of the rollout (as it stands today; more towns are expected to be added as part of “UFB 2” later this year)... Read more

Tensions have surfaced between Chorus and Spark over the best way to provide broadband. Chorus chief executive Mark Ratcliffe fired an arrow in Spark's direction, criticising "a push by some in the industry to talk up fixed-wireless broadband" as superior to fixed-line broadband... Read more

Spark managing director Simon Moutter has gifted 6,000 shares in the company to his executive assistant, Mary-Anne Powell, showing appreciation for many years of service. Shares in Spark have risen 7.6 percent since the start of the year.... Read more

Netflix has sent out a reminder to certain NZ customers whose user IDs are circulating on breach lists to check their security and reset their passwords. "As part of our regular security monitoring, we discovered that credentials that match your Netflix email address and password were included in a release of email addresses and passwords from a breach at another company," an email from company reads... Read more

Lawyer urges caution over 'Netflix killer' online streaming service. A streaming service provider marketed as "Bye Bye Sky" and a "Netflix killer" is selling fast in New Zealand, despite an internet piracy expert's warnings that it could be infringing copyright. NZ Streaming Boxes, branding itself as Bye Bye Sky, has sold 450 of its units in the two months it has been operating.... Read more

Truck shop operator Bestdeals 4 You has pleaded guilty to 19 charges of breaching the Fair Trading Act as well as the Credit Contracts and Consumer Finance Act in Auckland's District Court. Bestdeals is the ninth mobile trader to be prosecuted since the Commerce Commission’s investigation into the industry last year. It will be sentenced on Dec. 16, the Commerce Commission said in a statement... Read more

New Zealand Herald Editorial: Govt should use extra to cut debt, not taxes... Read more

Opinion/Analysis - Liam Dann: No inflation? So why doesn't it feel like it?... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket bounced back into its trading range as offshore bond yields and the US dollar retreated following soft US economic data. Wall Street dropped 0.3 per cent last night, but the S&P/ASX 200 index rose 22.1 points, or 0.41 per cent, to 5410.8 with bargain hunters lifting most sectors. Australian government 10-year yields rose 4.1 points to 2.349 despite the 3 point drop in US 10-years to 1.77 per cent... Read more

The Australian dollar has extended its gains against the greenback as the US currency continues to retreat on the back of soft manufacturing data. At 1200 AEDT on Tuesday, the local unit was trading at 76.63 US cents, up from 76.00 cents on Monday.... Read more

RBA governor worries interest rates will dip too low... Read more

The Reserve Bank's new governor, Philip Lowe, remains committed the central bank's inflation targeting regime, saying it provides the anchor for inflation expectations needed to support growth in jobs and incomes. At the same time, against the background of persistently low inflation, he has emphasised the flexibility allowed by the current arrangements... Read more

The financial regulator says there has been a greater focus on risk culture within institutions it oversees but has issued a warning that it will be keeping a close eye on the stragglers.... Read more

The move to privatise the NSW land titles registry could push costs up further for homebuyers... Read more

Sharp jump in property owners failing to pay rates. Melbourne's apartment boom has resulted in soaring numbers of central city property owners defaulting on rate notices and a sharp jump in legal action to recover millions of dollars owed. The steep rise in owners failing to pay rates follows hard on the heels of the latest warning of an apartment glut by the Reserve Bank of Australia.... Read more

Property investors could be up to $6000 better off when they do their tax return this year if they claim everything they are permitted to on depreciation. With the October 31 deadline looming for tax returns to be lodged BMT Tax Depreciation CEO Bradley Beer said many property investors weren’t claiming what they could... Read more

Funds need to invest in housing, says Australian Super chair Heather Ridout. Reserve Bank board member Heather Ridout has backed a greater role for institutional investors in funding more affordable housing. Ms Ridout, who also chairs Australian Super, told a panel at a Citi conference, that the fund had invested in social housing in London, where it has backed residential development projects that include social housing... Read more

Departing Mortgage Choice chairman Peter Ritchie has launched an attack on proxy advisers, saying they are hurting Australia with "thoughtless recommendations", and questioned their level of influence in the nation's boardrooms. Mr Ritchie, who said Tuesday's annual general meeting would be his last, took a parting shot at proxy advisers for recommending a vote against the company's renumeration package... Read more

Brendon Grylls has threatened to implement his new iron ore tax without the consent of BHP Billiton and Rio Tinto, which he accused of breaching their State agreements by allowing Pilbara towns to fall into disrepair... Read more

Rare Earth receives £500,000 from loan stock conversion. While Rare Earth has been splashing out converting options over shares in European Metals, it has received half a mill as a result of conversion of its loan stock into shares. Rare Earth Minerals plc has lifted its stake in European Metals Holdings Ltd to 17.64%, after exercising options over 2mln shares... Read more

TerraCom has secured a 5.5 year offtake of hard coking coal produced from the BNU coal mine in the South Gobi in Mongolia with a subsidiary of the Kingho Group, one of the largest private coal companies in China... Read more

Marmota Energy managing director and company secretary David Williams has resigned from the board with effect on November 13, 2016... Read more

Enerji Ltd has been granted a trading halt by the ASX, with its shares placed in pre-open.... Read more

Share trading forum HotCopper will use funds raised from its float just four weeks ago to buy back up to 10 per cent of its own shares over the next year. The surprise buyback was a prudent use of cash given a strong first quarter and its prevailing share price, the group said. HotCopper shares were 0.5¢, or 2.44 per cent, lower at 21¢ at the close, barely changed from their issue price of 20¢. At current prices, the proposed share purchases would cost up to $2.2 million... Read more

Shares in Pilbara Minerals jumped after it announced it would avoid a potentially costly and prolonged legal dispute with Mineral Resources over an offtake deal it made with China’s General Lithium. PLS shares were up five cents, or 12.35 per cent, to 44.5 cents at the close while MIN shares were up six cents to $10.92.... Read more

Fuel refiner and retailer Caltex has confirmed it has made a conditional and confidential proposal to buy supermarket giant Woolworths’ fuels business.... Read more

Latrobe gets $560k from R&D tax incentive... Read more

Masters Home Improvement landlords are playing hardball over lease agreements with Woolworths' failed hardware chain and the Home Consortium's $800 million bid for the properties. A number of landlords are believed to be frustrated that Woolworths bundled up 21 leasehold properties into the $800 million Home Consortium deal, a play for the Masters properties backed by some of Australia's wealthiest families... Read more

Hearing implant maker Cochlear could shift its research and development out of Australia because of cuts to tax incentives. Chairman Rick Holliday-Smith says Cochlear, which in August reported a record full-year profit of $189 million, has until recently received an annual benefit of about $10 million under the research and development tax incentive. At 1040 AEDT, Cochlear shares were up 37 cents, or 0.27 per cent, at $137.04 against the backdrop of a flat Australian market.... Read more

Wagering giants Tabcorp and Tatts Group have revived the likelihood of a merger that would create a $9 billion gambling behemoth, less than a year after first failing to reach a deal. Shares in the two companies were placed in a trading halt on Tuesday, with both companies requesting the suspension in separate statements to the ASX, pending "discussions related to a potential change in control"... Read more

Shares in casinos operator Crown Resorts have stabilised after Monday's battering, when they fell nearly 14 per cent in the wake of the detention in China of 18 Crown employees, including three Australians. Crown shares were up 15 cents, or 1.4 per cent, to $11.30 at 1201 AEDT.... Read more

Australian diplomats have visited two citizens detained in Shanghai as part of a Chinese police probe into Crown Resorts Ltd., Australia's largest casino operator. Foreign Minister Julie Bishop said in a statement on Tuesday consular officials visited two Australian Crown Resorts employees who have been detained and have asked to visit a third... Read more

Packer ‘deeply concerned’ by detention of Crown staff in China. James Packer has made a personal statement of concern for the welfare of 18 Crown Resorts employees being detained in China.... Read more

Fitch ups APRR's credit rating outlook... Read more

High-profile Telstra chief information security officer Mike Burgess has resigned and will work his last day on November 4, capping off almost four years leading IT security for the nation's largest telco. He will set out on his own as a strategic cyber advisor within his own consultancy, providing guidance to boards and committees about security threats and the impact they could have on their business... Read more

NBN Co will make more changes to its broadband pricing structure to encourage retail service providers to purchase more bandwidth, forecasting that the fees will drop by almost half in the coming years. The long-criticised connectivity virtual circuit (CVC) charge RSPs pay for bandwidth has until recently sat at $17.50 per Mbps per month... Read more

NBN Co hits 8 Gbps over copper in XG.FAST trials... Read more

A Sydney mother who shirtfronted Senator Bob Day at his offices says she feels “sick” that his supporters have started a GoFundMe page following the collapse of his building empire. Kellyville mother Lara Perrett has been through a three-and-a-half-year saga with Huxley Homes, the NSW subsidiary of Senator Day’s Home Australia, which went into liquidation yesterday leaving more than 200 families in limbo with half-finished homes and hundreds of contractors out of pocket.... Read more

Day contractors 'to get nothing'. Hundreds of contractors owed money after the collapse of Senator Bob Day's building group are likely to get nothing once the company is wound up, the building union says.... Read more

International Headlines

U.S. Market Report: Wall Street rallied on Tuesday, following a slew of market-beating results from marquee companies that led to the possibility that Corporate America could snap a four-quarter streak of declining profits. Of the 52 S&P 500 companies that have reported results to date for the third quarter, 81 percent have reported earnings that have topped analysts average estimate, according to Thomson Reuters I/B/E/S... Read more

North/South Americas Market Report: North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 1.15% while U.S.'s S&P 500 is up 0.73% and Mexico's IPC is up 0.60%... Read more

European Market Report: European markets finished broadly higher today with shares in France leading the region. The CAC 40 is up 1.32% while Germany's DAX is up 1.22% and London's FTSE 100 is up 0.76%... Read more

Asian Market Report: Asian markets finished broadly higher today with shares in Hong Kong leading the region. The Hang Seng is up 1.55% while China's Shanghai Composite is up 1.40% and Japan's Nikkei 225 is up 0.38%... Read more

Venezuela's oil giant warns of default next week. Venezuela's government-run oil giant -- the country's largest source of cash -- is warning that it could default on its bonds as early as next week.... Read more

Shares of Apple Inc. ticked slightly higher in pre-market trade Tuesday after Stifel analyst Aaron Rakers raised his price target on the stock to $130 from $120, saying he expects iPhone shipments to be ahead of expectations in the next two quarters... Read more

There's a bull market for pepperoni pizzas and stuffed cheesy bread. Domino's reported earnings and revenue for the third quarter were hotter than a pie just out of the oven. Shares of Domino's bubbled up 6% Tuesday on the news and hit an all-time high in the process. The stock is now up 45% this year alone.... Read more

Del Taco Restaurants Inc. shares are up 8.9% in Tuesday premarket trading after the company announced third-quarter earnings that beat earnings and sales expectations... Read more

Shares of Sprint Corp turned lower in morning trade Tuesday, after the telecommunications company disclosed preliminary second-quarter results... Read more

Johnson & Johnson lifted the low end of its guidance and posted better-than-anticipated results in the latest quarter as the health-care giant's pharmaceutical business continues to buoy its top line. The New Brunswick, N.J., company now expects earnings for the year of $6.68 to $6.73 a share, compared with its previous guidance for $6.63 on the bottom. It backed its revenue forecast of $71.5 billion to $72.2 billion. Shares, which have risen 15% so far this year, lost 0.4% premarket to $118.03.... Read more

Netflix's goal of reaching every country on earth has run into a regulatory buzzsaw in China. The streaming video service, which issued an otherwise sterling earnings report on Monday, acknowledged that its expansion plans have come up short in a market with 1.4 billion potential customers.... Read more

Airbus CEO vows to to retake jet production crown from Boeing by 2020.... Read more

Shares of Intel Corp. ran up 1.5% in morning trade Tuesday, after Barclays turned bullish on the chip maker, citing improving PC trends, increasing diversification and attractive valuation... Read more

Philip Morris International Inc. shares are up 1.1% in Tuesday premarket trading after it reported third-quarter earnings that beat estimates and raised its quarterly dividend by 2%... Read more

EU struggles to keep Canada trade deal on track. Ceta is supported by all 28 EU member states, but Walloon parliament in Belgium is blocking proposed agreement... Read more

Europe's favorite airline says the collapsing pound is taking a rather large bite out of its earnings. Ryanair said Tuesday that its full year profit will be 5% lower than previously expected. CEO Michael O'Leary, who campaigned for Britain to remain in the European Union, attributed the weaker forecast to a sharp decline in the value of the pound.... Read more

UK inflation hits near two-year high of 1%. Rising petrol and clothing prices drive increase in cost of living, with falling pound starting to make imports more expensive... Read more

U.K. Targets Banks Who Game League Tables to Win Clients... Read more

Airport expansion vote put on hold for more than a year by Theresa May. PM will hold final vote on expansion at Heathrow or Gatwick to allow for public consultation and debate... Read more

The government will next week announce its decision on whether to favour expanding either Heathrow or Gatwick airport, after decades of delays. Unusually, the decision will not be taken by the full cabinet but by a sub-committee, chaired by Theresa May. MPs will not get to vote on the decision for at least another year... Read more

Eurostar is to drop some of its services from December as it introduces longer trains, the company has said. The cross-Channel rail operator has not yet said which trains will be removed from its schedule... Read more

France produced the most power from fossil fuels for September in 32 years to help meet demand as nuclear generation dropped. Output from coal and gas plants more than doubled as Paris-based Electricite de France SA was forced to keep reactors offline for inspections. French month-ahead power prices have risen to near the highest since 2009... Read more

China's Dalian Wanda has said it will give foreign movie and TV firms huge discounts to film at their new studio. The firm has set up a five-year, $750m (£613m) fund with the Qingdao government to give rebates of up to 40%. Wanda, owned by China's richest person Wang Jianlin, aims to woo Hollywood directors to China... Read more

Opinion - Larry Elliott: Rising inflation is just the start: UK living standards will be squeezed. The cost of living in Britain is certain to increase noticeably over next 12 months, with consumers facing higher prices... Read more

Opinion - Rex Nutting: We’re getting the wrong kind of inflation... Read more

Latest reports

Latest reports

Blog snapchat