ASB Securities Morning Brief for Saturday, 25 July 2015
Saturday, 25 July 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares extended their fall from a record, led by Meridian Energy, as investors remained disappointed by yesterday's smaller interest rate cut than expected. Genesis Energy and Fletcher Building declined. The S&P/NZX 50 Index fell 7.12 points, or 0.1%, to 5894.18. Within the index, 24 stocks fell, 22 rose and four were unchanged. Turnover was $90.2 million.... Read more

The New Zealand dollar is heading for a 1.1 percent gain against the greenback this week as the Reserve Bank's approach to lower interest rates disappointed some investors wanting more aggression. The kiwi increased to 65.82 US cents at 5pm in Wellington from 65.87 cents last Friday in New York. It was down from 66.10 cents at 8am and 66.29 cents yesterday as weak Chinese manufacturing figures and falling commodity prices weighed on the outlook for Australia and New Zealand's exports. The trade-weighted index fell to 70.21 from 70.50 yesterday, and is heading for a 1.2 percent weekly gain... Read more

Import-export gap pushes trade deficity to largest for six years... Read more

New Zealand Reserve Bank governor Graeme Wheeler will speak at a breakfast event at the Tauranga Chamber of Commerce next Wednesday about the outlook for the New Zealand economy, which will give him a chance to detail his thoughts after he cut the official cash rate yesterday... Read more

Futurist Gerd Leonhard predicts 50 per cent unemployment... Read more

First rise in bankruptcies since 2009. Insolvency expert says an increase usually follows any economic downturn... Read more

The repression of saver's returns gathers pace as the OCR is cut and more are signalled. David Chaston updates what has happened to the term deposit market... Read more

New health and safety rules relaxed for small businesses. Health and safety law reform sparked by the Pike River coalmine disaster has been reported back from the industrial relations select committee with weakened requirements on small businesses to appoint health and safety representatives and committees... Read more

Rates of Christchurch's most opulent homes double those in Auckland... Read more

NZX says it is experiencing strong support from New Zealand financial advisers for its range of Smartshares exchange-traded funds (ETFs).... Read more

Australian-based Freedom Foods and US-based Dean Foods are said to be in no hurry to up their bid for A2 Milk Co after the milk marketer this week told its suitors to try again after an initial offer wasn’t compelling and drew out as yet unnamed rival bidders... Read more

Meat processor Silver Fern Farms has suspended trading of its shares on the Unlisted exchange until further notice as it continues with its capital raising initiatives. The company said it would make no further comment at this stage. Shares in the co-operativee last traded at 35 cents, valuing SFF at $35.1 million... Read more

Peach canning industry runs scared of anti-dumping legislation. Hawke's Bay peach growers have warned the Government not to put the $15 million canning industry at risk by allowing dumped product to be imported into New Zealand.... Read more

Briscoe Group, the retailer controlled by managing director Rod Duke, is offering Kathmandu Holdings shareholders a mixture of cash and scrip which equates to a 5 cent premium on the outdoor equipment retailer's last share price.... Read more

Arvida ready to expand care facilities... Read more

Waikato-Tainui's fortunes are steadily increasing, its asset base rising by $123.6 million in the past year to reach $1.2 billion. The Hamilton-headquartered tribe's annual report, issued by Waikato Raupatu Lands Trust for the March 31, 2015, year and including the result of subsidiary Tainui Group Holdings, was out this week and showed wealth rising from a $1 billion asset base to $1.2 billion... Read more

Australian fund manager L1 Capital has cashed up its stake in local telecommunications network operator Chorus, booking a 34 percent gain over the past year. The Melbourne-based firm sold 7.9 million shares for A$19.7 million on July 22, an average price of about A$2.48 per share, and reducing its stake in the dual-listed Chorus to about 3 percent, which is below the 5 percent threshold that makes it a substantial shareholder, according to a notice filed with the stock exchange... Read more

Federated Farmers believe the two month delay in the Select Committee reporting back the Health and Safety Reform Bill to Parliament has led to improvements for the farming industry. The Bill has been reported back today... Read more

A “mini-Trowbridge Report” has been commissioned by the Financial Services Council, to investigate sales incentives in New Zealand’s personal insurance industry... Read more

Financial Services Council launches its own investigation into churn... Read more

IOOF in Australia has closed its My Adviser and Plan B Wealth Management financial planning services, but says there are no changes planned to its Kiwi business at present.... Read more

Auckland is being left behind by some of the world's biggest cities, according to a report released today. A City of Opportunity, compiled by global accounting firm PricewaterhouseCoopers (PwC), looked at four areas that needed the most work in Auckland... Read more

The Commerce Commission says its ongoing consumer credit dispute with Motor Trade Finance is its most significant case for establishing rules on what fees lenders can charge. Mark Berry, chairman of the anti-trust regulator, told the commission's annual conference this week that consumer credit remains a priority area... Read more

Private prison operator Serco relieved of control at Mt Eden prison... Read more

Tax staff pinged for sick leave. IRD staffers who take even one day off when they’re ill are being summoned to meetings to explain themselves.... Read more

Opinion - Brian Gaynor: Fonterra's answer - get out of the big smoke. Having its main office in Auckland is a big part of the dairy giant's problem... Read more

Opinion - Pita Alexander: Better business in downcycles... Read more

Opinion - Russell Hutchinson: Roboadvice - the regulator's choice? One commentator I read, who happens to be a big fan of robo-advice, talked excitedly about how it solves all those messy compliance problems caused by forgetful – or conflicted – humans... Read more

Opinion - Diana Clement: Fear not, credit rating redemption is possible. Noting good as well as bad in paying habits opens door to rehabilitation... Read more

Australian Headlines

Australian Market Report: It was the Australian sharemarket’s third straight soft close. At the 4.15pm (AEST) official market close, the benchmark S&P/ASX200 was down 24.2 points, or 0.43 per cent, to 5566.1, while the broader All Ordinaries index had slipped 24.5 points, or 0.44 per cent, to 5556.8.... Read more

The Australian dollar has dipped to its lowest level in more than six years on the back of weak Chinese manufacturing data and a note of caution from a key ratings agency. The currency traded as low as US72.69c by mid afternoon, down from around US73.54c earlier in the session. At 5pm, the local currency was buying US73.02c... Read more

One of the world's largest credit rating agencies has warned that Australia risks losing its top investment ranking if the budget deficit does not improve. Standard & Poor's has warned that continued parliamentary gridlock or an economic shock from overseas, such as more big falls in commodity prices, could see Australia lose its AAA credit rating.... Read more

Property investors restrained. Aussie banks raise interest rates in bid to cool boom as Sydney median price breaks through A$1m.... Read more

The Commonwealth Bank has followed ANZ in lifting interest rates for property investors, as the major banks move to comply with APRA's limits on investor lending growth. Australia's biggest home lender said in a statement that it will lift the interest rate on variable investor loans by 27 basis points to 5.72 per cent per annum... Read more

Most Aussies still think it's a good time to get into the property market, despite house prices surging in Sydney and Melbourne, a survey has found. Sixty per cent of the 1,010 respondents polled in CoreLogic RP Data-Nine Reward's housing market sentiment survey, released on Friday, considered the June quarter to be a good time to buy property... Read more

GST threshold for overseas online shopping could fall from $1,000 to $20... Read more

IMX Resources is voluntarily delisting from the Toronto Stock Exchange to reduce costs due to the limited trading volume and low ownership of IXR on the TSX. Shares in the company will continue to trade on the Australian Securities Exchange.... Read more

CuDeco mining chief McCrae exits as Chinese investors lose patience... Read more

Troubled Pilbara miner Atlas Iron will resume trading shares from Monday. They last traded at 12 cents each, well down from the 71 cents of July 2014... Read more

IMX Resources is voluntarily delisting from the Toronto Stock Exchange to reduce costs due to the limited trading volume and low ownership of IXR on the TSX. Shares in the company will continue to trade on the Australian Securities Exchange.... Read more

Axiom Mining has been granted an ASX trading halt in relation to financing for the development of its Isabel Nickel Project in the Solomon Islands... Read more

Heron Resources has struck a staged funding deal with a UK-based private equity fund potentially worth as much as $20 million. Under the terms of the deal, London-based Greenstone Resources will pay $6.8 million for a placement of 54.1 million new Heron shares prices at 12.6 cents, a premium to the company’s trading price today of 11 cents... Read more

Resource Star raises funds to advance project generation... Read more

Peninsula Energy receives Buy, $0.04 price target from RFC Ambrian... Read more

Anglo American PLC on Friday reported a $US3 billion ($A4.1bn) loss for the first half of 2015, and said it would cut 53,000 jobs, or about 35 per cent of its workforce over the next few years, as plunging commodity prices continue to wreak havoc on the bottom lines of miners world-wide... Read more

Non-bank lender Pepper Group Limited is seeking to raise $144.5 million through a fully underwritten initial public offering priced at $2.60. As at 31st December 2014, the specialist residential mortgage and consumer lender and loan servicer had $28.6 billion of assets under management (AUM)... Read more

Tables turned on Myer as David Jones gears up for war of attrition. Woolworths is planning to spend a 'scary amount of money' transforming the faded grande dame of Australian retailing into the best department store in the southern hemisphere.... Read more

MyFiziq Limited is seeking up to $6 million through an initial public offering priced at $0.20 to commercialise its smartphone app that tracks changes to a person’s body shape. This is underwritten by KTM Capital Pty Ltd... Read more

CSC, HCL to create new banking software firm... Read more

A top secret forensic accountant's report given to the financiers of collapsed Melbourne satellite company NewSat found "potential unlawful conduct" and "serious management failings". BusinessDay can reveal that the Ferrier Hodgson report led to NewSat's main financier, the US government's EXIM Bank, twice demanding chief executive Adrian Ballintine and chairman Richard Green be removed in the months leading up to NewSat's placement in receivership in April... Read more

Wagering and keno operator Tabcorp says it’s working with Australia’s financial intelligence unit to resolve matters that had prompted the agency to launch legal proceedings against the company. It says it had referred some of the matters of concern to AUSTRAC to gambling regulators and police when they occurred, but hadn’t done so in all cases... Read more

Transpsort outfit Heavy Haulage Australia, star of TV series MegaTruckers, went bust partly thanks to failing to accurately cost jobs it worked on, administrators have determined.... Read more

Telstra is warning its customers to watch out for scam emails, after the telco revealed 22,000 customers were emailed fake bills this week. In a post to its blog, Telstra said the affected customers received two different phishing emails, both titled “Your email bill”... Read more

Opinion - Alan Kohler: Baird's gambit changes the politics of the GST... Read more

Opinion/Analysis - Bill Evans: Stevens' surprise. This week RBA governor Glenn Stevens gave an important speech to the economics community. ... Read more

Opinion - Mike Steketee: We've been promised tax reform, but will it be enough?... Read more

Opinion - Andrew Leigh: Abbott keeps prioritising billionaires over battlers. A government that actively undermines tax transparency and fairness is one that does not have the best interests of the Australian community at heart -- and that is exactly what the Abbott Government is doing... Read more

International Headlines

U.S. Market Report: U.S. stocks sell off, book hefty weekly losses. The S&P 500 SPX, -1.07% closed 22.50 points, or 1.1%, lower at 2,079.65, booking a 2.2% weekly loss. The weekly decline for the benchmark was the steepest since March... Read more

North/South Americas Market Report: North and South American markets finished sharply lower today with shares in Mexico leading the region. The IPC is down 1.31% while Brazil's Bovespa is off 1.13% and U.S.'s S&P 500 is lower by 1.07%... Read more

European Market Report: European markets finished broadly lower today with shares in Germany leading the region. The DAX is down 1.43% while London's FTSE 100 is off 1.13% and France's CAC 40 is lower by 0.58%... Read more

Asian market Report: Asian markets finished broadly lower today with shares in China leading the region. The Shanghai Composite is down 1.29% while Hong Kong's Hang Seng is off 1.06% and Japan's Nikkei 225 is lower by 0.67%... Read more

Gold falls 5th straight week, nears 5½-year low... Read more

Hedge funds are holding the first ever bet on a decline in gold prices since the U.S. government started collecting the data in 2006. The funds and other speculators shifted to a net-short position of 11,345 contracts in New York futures and options in the week ended July 21, according to figures from the U.S. Commodity Futures Trading Commission... Read more

Rare glimpse inside Fed shows staff expects funds rate to reach 0.35% in the fourth quarter... Read more

The World Trade Organization says major exporters of information technology products have agreed, after years of talks, to cut tariffs in the sector, in the first such deal at the WTO in nearly two decades. "Today's agreement is a landmark," WTO Director General Roberto Azevedo said in a statement, describing the accord as "the first major tariff cutting deal" at the organisation in 18 years. The deal covers more than 200 products worth about $US1.3 trillion ($A1.77 trillion) in annual global trade.... Read more

Amazon shares have surged almost 15% after it posted an unexpected profit on Thursday. The online retailer reported a $92m profit for the three months to 30 June, surprising investors who had expected another loss. Sales rose by 20% to almost $23.2bn... Read more

Amazon Web Services has reported a near-doubling of profits in its latest results, in just the second time parent company Amazon has broken out the financial performance of its cloud computing arm... Read more

Amazon’s stunning profit may be short-lived... Read more

U.S. new home sales at seven-month low; manufacturing stabilizes... Read more

American Airlines Group Inc. paced an industrywide stock slide after predicting that a closely watched revenue gauge would keep declining into 2016, signaling that ticket prices remain under pressure... Read more

Chrysler is recalling 1.4 million vehicles that can be remotely hacked over the Internet. A flaw in several Chrysler models lets hackers remotely control them, posing an unprecedented danger for American drivers. Hackers can cut the brakes, shut down the engine, drive it off the road, or make all the electronics go haywire... Read more

The US regulator, the Securities and Exchange Commission (SEC), has launched an investigation into whether drinks company Diageo has been shipping excess stocks to customers to boost results. Sending customers more cases than they had ordered would allow Diageo to report higher sales than were placed. Diageo said it was "working to respond fully to the SEC's requests for information in this matter"... Read more

Visa, Budweiser, Coke and McDonald's pressure FIFA for deep reforms... Read more

Facebook defeats shareholder litigation over IPO... Read more

The prospect of Greece being forced to leave the euro zone has lifted, ECB governing council member Christian Noyer said in an interview with Le Monde newspaper published on Friday. Noyer, who is also governor of the Bank of France, said that Greece represented "next to zero" risk of contagion for foreign banks as they had largely reduced their exposure to the massively indebted country... Read more

Eurozone July business activity holds up despite Greek crisis... Read more

Mortgage lending shows UK housing market 'hotting up'. Record low rates and an end to political uncertainty is renewing homebuyers’ confidence, says British Bankers’ Association... Read more

HSBC's Gulliver steps back from London HQ decision... Read more

Vodafone says it would be shareholder in firm if BT Openreach were replaced Company joins calls for BT and Openreach to be split to share fibre-optic cables between providers as Ofcom reviews broadband market... Read more

Ukraine on Friday made a crucial Eurobond interest payment that kept the war-torn country from slipping into technical default and potential isolation from global credit markets. Two sources close to the situation told AFP that money to cover the $120 million (110 million euro) payment was transferred as soon as business hours opened in Kiev. The $2.6 billion note matures in July 2017.... Read more

This is what belt-tightening looks like in Russia: Vladimir Putin has fired 110,000 government officials at a stroke. The Russian president signed a decree last week limiting the number of staff employed by the Interior Ministry to just over one million. That requires massive layoffs that will bring total headcount down by 10%... Read more

In the last year there has been a sharp increase in the volume of counterfeit tobacco in Russia, including incidents of illegal supplies of cigarettes from China. Experts believe that this unexpected phenomenon is due to restrictions on tobacco sales. However, despite this initiative, the total number of smokers in the country remains practically unchanged... Read more

A key gauge of Chinese manufacturing activity tumbled to a 15-month low in July, an independent survey showed, throwing a pall over growth in the world's second-largest economy. The preliminary reading of Caixin's Purchasing Manager's Index (PMI) came in at 48.2 this month, the Chinese media group said in a joint statement with Markit, a financial information services provider that compiled the survey. The figure was the weakest reading since 48.1 in April 2014, according to Markit's data.... Read more

Nikkei and the FT: a meeting of minds or culture clash?... Read more

IMF warns Japan over its staggering national debt. Japan's debt will be three times the size of its economy by 2030 unless the government acts now to control spending, the International Monetary Fund has warned. Japan's debt is already at about 245% of its annual gross domestic product -- or more than 1 quadrillion yen ($11 trillion)... Read more

E-commerce Helps Bangladeshis Skip Eid al-Fitr Queues... Read more

Opinion/Analysis - Simon Maierhofer: Will the commodity crisis infect stocks?... Read more

Analysis - Thomas H. Kee Jnr: A look at valuations for GE, Intel, Goldman and Apple... Read more

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