ASB Securities Morning Brief for Friday, 20 March 2015
Friday, 20 March 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose, led by Skellerup Holdings and paced by Meridian Energy, as investors returned to equities in the face of globally low interest rates. Kathmandu Holdings gained ahead of reporting earnings tomorrow. The NZX 50 Index rose 12.741 points, or 0.2 percent, to 5859.404. Within the index, 19 stocks rose, 25 fell and six were unchanged. Turnover was $184 million... Read more

The New Zealand dollar gained after the Federal Reserve gave a more cautious assessment of the US economy, prompting traders who had been betting on further gains in the greenback to exit their positions. The kiwi traded at 74.62 US cents at 5pm in Wellington, having risen as high as 75.45 US cents after the Fed's statement, from 73.03 cents late yesterday. The trade-weighted index increased to 78.21 from 77.22 yesterday... Read more

The New Zealand economy is growing at its fastest pace since the start of the Global Finance Crisis.... Read more

Migration behind strong GDP growth. Population growth, boosted by a record net migration gain, explains about half of the strong economic growth recorded last year. Gross domestic product rose 0.8 per cent in the December quarter, in line with market expectations, to be 3.5 per cent higher than a year earlier. On a per capita basis GDP growth was 1.8 per cent last year, up from 1.4 per cent in 2013... Read more

New Zealand and the US have escalated a complaint against Indonesia to the World Trade Organisation on import restrictions that led to the collapse in New Zealand beef exports to the southeast Asian country... Read more

New Zealand and Vietnam aim to double trade to around $2.2 billion by 2020. The target announced yesterday was part of an accord between the two countries in which Prime Minister John Key and his Vietnamese counterpart, Nguyen Tan Dung, signed agreements on food safety and air services... Read more

International Monetary Fund says LVR limits work in boom times, not busts. Restrictions on low deposit home loans appear to have more effect in times of boom rather than bust, according to an International Monetary Fund working paper. The paper released this month studies the use of macroprudential policies in 119 countries from 2000 to 2013, including loan to value ratio speed limits which were introduced in New Zealand in 2013... Read more

BNZ's home loan airpoints scheme grounded. BNZ customers with a Global Plus home loan will no longer be getting Air New Zealand Airpoints.... Read more

Westpac customers to fly with Air New Zealand Airpoints... Read more

Drivers should expect to see petrol prices drop up to 4 cents a litre "very soon" according to the Automobile Association, after refined product prices fell and the New Zealand dollar rose. Earlier this week petrol companies trimmed prices by 2 cents a litre to $1.95 a litre, after lifting them to $1.97 a litre at the end of last week, after the New Zealand dollar slid down to about US72c... Read more

Consenting delays in Christchurch are being made worse by a nearly 50 per cent fail rate on building inspections, the city council says... Read more

Rental market favours landlords. Times are good for landlords: High demand across all market sectors means that asking rents are on the rise.... Read more

BNZ chief economist sees little chance of regions catching up the Auckland house price rises during this economic cycle... Read more

Sheep and beef farmers should earn on average $109,400 before tax in the 2014-15 year, according to Beef + Lamb New Zealand's mid-season update. However, a yawning gap exists between the $117,000 that North Island farmers will earn and the $100,000 for a South Island farmer to the end of June. Senior economist Andrew Burtt said the difference was explained by the fact there was more beef in the North Island, and beef had fetched record prices in the past year... Read more

Small providers offered DIMS wing. A wealth management firm is offering to partner with advisers who would like to continue to provide DIMS but do not want the hassle of a class licence.... Read more

Possible repeal of convention centre law hangs on Northland byelection result. The $400 million deal for SkyCity to build a national convention centre in Auckland could be under threat. Parliament will get a chance to overturn the law giving SkyCity concessions in exchange for building a national convention centre... Read more

Tourism Holdings, the largest campervan rental business in Australia and New Zealand, said it acquired 49 percent of UK-based Just Go, a motorhome rentals and sales business. The Auckland-based company said the price wasn't material and wouldn't be disclosed. The shares rose 0.6 percent to $1.75 and have declined 3.3 percent this year... Read more

A Kiwi shoe company with a foot on both sides of the Tasman has been bought by the owner of The Athlete's Foot for up to A$200 million (NZ$207.2m). Accent Group, which owns the Platypus chain and distributes several big shoe brands including Dr Martens, has been bought by Australia's RCG Corporation... Read more

Mainfreight expects annual profit to rise as much as 7.1 percent on revenues in excess of $2 billion as it pays tribute to one of the business leaders who helped it evolve from a company with one truck... Read more

Mega has again extended the deadline for its reverse listing on the NZX, this time from March 31 to May 29. The Kim Dotcom-founded file sharing service initially planned to list on June 30 last year... Read more

Wynyard proposes dual listing on Australian bourse. Shares of the Wynyard last traded at $1.80 and have fallen 7.7 percent since the start of the year. ... Read more

News Corp, the global media group controlled by Rupert Murdoch, has lifted its stake in APN News & Media to 14.99 percent, buying shares from the target company's ling-term shareholders Independent News & Media and Baycliffe... Read more

APN News & Media halted for selldown amid speculation O'Brien, INM exiting... Read more

A new $120 million 150-unit apartment block is planned for Auckland CBD's western fringe. A spokeswoman for property developers Myland Partners said the big new project, Union Green, would be built at 39-47 Union St... Read more

Kiwi travellers can now earn Fly Buys points on global hotel bookings in a new partnership between the loyalty programme and offers accommodation booking for approximately 435,000 properties around the world and is Fly Buys’ first partnership with an overseas travel company... Read more

AMP Capital today announced the appointment of Salt Funds Management as investment manager for active New Zealand equities.... Read more

Ports of Auckland: Prominent leaders back Auckland harbour protest. Open letter from business, music and sporting figures demands port company to stop taking city’s waterway... Read more

New Zealand Manufacturers and Exporters Association boss John Walley is hanging up his boots after 16 years in the job. He has sometimes been seen as a lone voice for manufacturers and exporters battling a high dollar... Read more

Sir Don McKinnon is Appointed Patron to Transparency International New Zealand... Read more

Omnicom Media Group (OMG) has lured FCB Auckland planning director Simon Bird into its ranks to join PHD Group. As group strategy director he will work with Gareth O’Connor and James Davidson to “deliver great strategic thinking across Spark PHD, PHDiQ and Spark PR & Activate.”... Read more

Insurers are running a magnifying glass over their policy wordings after changes to the Fair Trading Act this week.... Read more

FMA lifts head count to 170 staff as it probes new areas.... Read more

Alex Swney will be sentenced on April 30 and has been told to expect a sentence of imprisonment. Mystery surrounds efforts by Heart of the City to claw back millions of ratepayers' dollars from disgraced former chief executive Alex Swney, after the publicly funded organisation successfully secured gagging orders in the High Court... Read more

A case in which a former financial adviser’s clients are seeking to bankrupt him may force others in the industry to assess their structures, it has been suggested. Andrew Hrothgar Robinson was the second authorised financial adviser to lose his licence when the FMA cancelled it in 2012, after David Ross... Read more

Part of troubled housing development empire Tribeca Homes has been placed into liquidation by creditors. The Herald reported in January how Tribeca blamed subcontractors in 44 dishonoured home building contracts worth $10 million... Read more

A Timaru real estate company has been fined $55,000 and ordered to pay $5000 in reparation as a result of a prosecution brought by Worksafe New Zealand. The Timaru District Court was told the leakage of 30 kilograms of gas, due to gasfitting work carried out by an unqualified handyman, could have cost the life of a Timaru man... Read more

Opinion - David Chaplin: House prices weaken as global property trends converge - survey... Read more

Opinion - Brian Fallow: Trade disputes not so clear-cut. TPP opponents fear rules will hamstring Government... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket posted its biggest rally in a month, rocketing back towards 6,000 points, as the likelihood of a local rate cut drove high-yielding financials to record highs. At the 4.15pm (AEDT) official market close, the benchmark S&P/ASX200 index had rallied 108.5 points, or 1.86 per cent, to 5,950.8, while the broader All Ordinaries index had surged 104.5 points, or 1.8 per cent, to 5,912.5... Read more

The Australian dollar has jumped in offshore trade, moving beyond US78c as the latest projections from members of the US Federal Reserve hinted at a less aggressive outlook for rate hikes over the coming 12 months... Read more

ATO's Chris Jordan says tax disclosure laws not intended for private companies... Read more

The federal government is expected to confirm its entry into the Asia Infrastructure Investment Bank on Monday after cabinet’s National Security Committee approved the idea this week,... Read more

Australia's mining companies are shedding jobs by the thousands, with 50,000 workers losing their jobs in the past 12 months. The country's manufacturing industry has been shrinking too, though not as quickly - dumping 25,300 jobs since February last year... Read more

The falling iron ore price has claimed another 70 mining jobs and raised the ire of West Australian Premier Colin Barnett over the big miners' decision to flood the market. Junior iron ore producer Karara Mining announced on Wednesday it will cut 15 per cent of its workforce in Western Australia as the steel-making ingredient slumped to a fresh six-year low of $US55 a tonne... Read more

King River Copper directors have increased their direct and indirect interests in the company through take-up of the recent rights issue and in specie transfers by Australian Heritage Group. Indirect interests of chairman Anthony Barton acquired 14,760,269 shares for a total of $179,600... Read more

Pioneer Resources’ directors have increased their holdings in the company through its recent share purchase plan priced at $0.018 per share. Both non-executive chairman Craig McGown and David Crook acquired their full entitlements of 833,333 shares for a total of $15,000 each... Read more

The name Leighton Holdings, seen on stock exchange boards in Australia for 53 years, could potentially be put out to pasture as the company seeks to trademark two new brands... Read more

Colin Barnett has launched a fresh attack on Rio Tinto and BHP Billiton, labelling their iron ore expansion strategies "dumb", as he nurses deep wounds inflicted on the West Australian state budget by his Treasury's wildly optimistic price forecasts for the commodity... Read more

Gascoyne Resources heads to market... Read more

Windward Resources has been granted an ASX trading halt in relation to a capital raising... Read more

Medibank Private boss George Savvides says he is optimistic of reform to allow insurers to cover GP visits... Read more

Rupert Murdoch's News Corp has snared a major stake in trans-Tasman newspaper publisher and radio group APN News & Media. Its purchase of a 14.99 per cent stake is a clear sign of confidence in APN chief executive Michael Miller, who held several senior roles News in the six years before he joining APN in 2013, media analyst Steve Allen said... Read more

Resort kings Mantra have bought out the last of Outrigger’s Australian hotels in a deal worth almost $30 million. The Gold Coast-based Mantra Group yesterday ((SUBS 19-3)) announced details of a $29.5 million agreement to take over the last four resorts of Outrigger Hotels and Resorts Australia... Read more

Oroton chief executive Mark Newman says he is willing to endure the short-term pain of falling sales in order to restore the luxury accessory brand's prestige. The retailer was punished by investors when it unveiled a 57 per cent drop in first half profit to $2.19 million and slashed its dividend on Thursday. Oroton shares dropped 27 cents, or 10 per cent, to $2.44.... Read more

We've lost our way, says Myer boss. Myer is out of touch. That's the candid admission from the department store chain's new chief executive Richard Umbers after the company unveiled a dismal first half profit result. The retailer scaled back its full year earnings forecast after its interim net profit slumped 23 per cent to $62.2 million... Read more

Contractors Laing O'Rourke and AECOM have won a $100 million contract to build the new railway station for the proposed Perth Stadium. Transport Minister Dean Nalder said the station and its associated railway infrastructure was just one part of the $358 million integrated transport solution for the new Perth Stadium... Read more

RCG Corportation, the listed company behind retailer The Athlete’s Foot, has bought Accent Group, which owns brands including Timberland, Sketchers, Vans and Dr Martins. The purchase price is between $180 million and $200 million, with RCG saying the acquisition will be earnings per share accretive in fiscal 2016... Read more

BT labels TPG’s iiNet offer ‘absurd’... Read more

Electronics retailer Dick Smith is cutting about 80 jobs as part of a restructure that aims to rein-in costs and improve its supply chain. The retailer is axing jobs within its support office as part of a restructure that is designed to improve the company's dealings with suppliers. It estimates the changes will cost up to $7.9 million, but lead to savings of between $8 million and $12 million... Read more

Finbar is looking to replicate the success of its Aurelia development by buying another site in South Perth for $7.25 million. The company plans to demolish the existing 1970s apartment block on the 1782sqm Harper Terrace property and build a new luxury complex comprising 56 apartments along with ground level retails and level one office space. Finbar shares closed steady at $1.275.... Read more

Things are starting to look up for Australia's tourism industry, thanks to the lower exchange rate and steady stream of Chinese travellers, the Reserve Bank says... Read more

The newly-elected Labor Victorian government has called off plans to outsource the functions of state shared service provider CenITex for the meantime as it conducts as a review into service delivery across government... Read more

Leasing company Radio Rentals made $90 million in Centrelink payments last year... Read more

Former CommBank IT exec pleads not guilty to bribery... Read more

Opinion/Analysis - Victoria Thieberger: An alternative home for super. Saving for retirement is all about saving for the long term, so it is continually surprising to see the extent to which individual investors and advisers favour short-term, highly liquid assets in their portfolios... Read more

Opinion - Mark Gregory: The NBN fibre cost shock. Communications Minister Malcolm Turnbull has achieved a major milestone with the launch last week of NBN Co’s Fibre-on-Demand (FOD) offering... Read more

International Headlines

U.S. Market Report: U.S. stocks fell on Thursday as energy shares slumped, with the broad S&P 500 handing back some gains from the prior session sparked by a policy statement from the Federal Reserve that was more dovish than expected. U.S. stocks had rallied more than 1 percent on Wednesday as investors, who had sold equities ahead of the meeting, were relieved by the Fed's statement which cut economic growth and inflation projections and indicated it was in no rush to hike interest rates... Read more

North/South Americas Market Report: North and South American markets are mixed. The Bovespa is higher by 1.45%, while the IPC is leading the S&P 500 lower. They are down 0.78% and 0.45% respectively... Read more

European Market Report: European markets finished mixed as of the most recent closing prices. The FTSE 100 gained 0.25% and the CAC 40 rose 0.07%. The DAX lost 0.20%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Hang Seng gained 1.45% and the Shanghai Composite rose 0.14%. The Nikkei 225 lost 0.35%... Read more

Oil prices fell on Thursday as a rebounding dollar and Kuwait's stance that OPEC had no choice but to keep producing in an oversupplied market undercut a rally from the previous day. Benchmark Brent oil and U.S. crude were down about 2 percent each, weighed by the dollar's rise against most currencies after the greenback's biggest tumble in 18 months on Wednesday... Read more

Another surge in US stockpiles pushed oil prices lower again Thursday, giving up some of the big gains in New York that came after the Federal Reserve cooled the chances of an early summer interest rate hike. US benchmark West Texas Intermediate (WTI) for April delivery was down $1.11 to $43.55 while Brent crude for May tumbled 78 cents to $55.13 in afternoon trade. WTI gained $1.20 in US trade and Brent jumped $2.40 after the US central bank signalled it was in no hurry raise rates, which sent the dollar tumbling... Read more

Gold price set to double in the next 15 years... Read more

Fed opens door wider for rate hike but downgrades economic outlook... Read more

The Federal Reserve is expected to issue a new rule in the coming months involving a long-term debt requirement for banks' emergency plans, a top Fed official said on Thursday... Read more

U.S. jobless claims up slightly; weather hurts factory activity... Read more

30-year fixed-rate mortgage falls to 3.78%, Freddie Mac says... Read more

The stark divergence between U.S. and euro zone monetary policy has made it more attractive than ever for U.S. companies to raise cash in euros and swap it back into dollars this year, but that window of opportunity could be closing... Read more

Bank of New York Mellon Corp., the world’s largest custody bank, is close to settling allegations by the U.S. and New York state that it defrauded clients in foreign-exchange transactions, according to a person familiar with the matter. Under the settlement, the bank will pay more than $700 million to put to rest lawsuits brought by Manhattan U.S. Attorney Preet Bharara and New York State Attorney General Eric Schneiderman as well as some private litigation, said the person, who asked not to be identified because an agreement hasn’t been announced... Read more

US retail giant Target will raise the minimum wage it pays its employees to $9 (£6) an hour after rivals announced similar moves, according to reports. The wage rise would begin at all of its 1,800 US stores in April... Read more

Target Corp has agreed to pay $10 million in a proposed settlement of a class-action lawsuit related to a huge 2013 data breach that consumers say compromised their personal financial information, court documents show... Read more

Electric car maker Tesla will be allowed to sell its vehicles in the US state of New Jersey, after a ban on direct-to-consumer sales was lifted. The company has been prevented from doing business in some US states due to laws that require cars to be sold through franchised dealerships... Read more

Web hosting company GoDaddy Inc's initial public offering is expected to value the company at up to $2.87 billion and comes at a time when there has been a steep fall in the number of companies going public in the United States... Read more

Warburg Pincus Bet on Crisis-Hit Banks Said to Earn $650 Million... Read more

Canada's Bank of Nova Scotia sued Cliffs Natural Resources Inc, saying the U.S. iron ore miner had breached terms of a loan agreement when it filed for creditor protection for its Canadian operations. Cliffs' shares fell as much as 7.2 percent in morning trading on the New York Stock Exchange on Thursday.... Read more

Euro zone has not yet fully overcome debt crisis, says Merkel... Read more

EU plans tax transparency clampdown... Read more

European Parliament President Martin Schulz said on Thursday, shortly before EU leaders meet in Brussels, that Greece's financial situation was "dangerous" and it needed two to three billion euros in the short term to avoid bankruptcy... Read more

EU to tell Greece time, patience running out... Read more

Banks regulated by Bank of England receive £8m rebate on watchdog fees Prudential Regulatory Authority levied fines last year and part of rebate to other banks will be paid out of penalties... Read more

Budget airline Ryanair has abandoned plans to operate transatlantic flights, just days after it said its board had approved the measure. In a statement, Ryanair said it "has not considered or approved any transatlantic project and does not intend to do so"... Read more

Carrefour is preparing to return to Algeria after a six-year absence, as part of a drive to tap booming consumer demand in Africa... Read more

What's next for AT&T? Apple pushed it out of Dow. AT&T's first day out of the Dow was a lot like its days as a member of the most exclusive stock market club. Its shares lagged the rest of the market.... Read more

Lufthansa pilots plan a third day of striking on Friday, following two days of planned action on Wednesday and Thursday, potentially disrupting thousands of passengers. The Friday strike will affect short- and medium-haul flights, similar to Wednesday's action. Pilots staged a walk-out for long-haul flights on Thursday.... Read more

The Swiss National Bank kept a charge on some cash deposits steady at -0.75 percent on Thursday, but said it would remain active in foreign exchange markets to weaken what it sees as a "significantly overvalued" franc. The central bank kept its target range for the three-month Libor at -1.25 to -0.25 percent, as analysts polled by Reuters had expected... Read more

Volvo could oust CEO as time runs down on profit push-report... Read more

Tag Heuer, Intel challenge Apple with Android smartwatch... Read more

Petrobras Said to Pick Citi and Bradesco for Asset Sales. Petroleo Brasileiro SA is working with Citigroup Inc., Banco Bradesco SA and Banco Santander Brasil SA to sell stakes in three units as part of a $13.7 billion divestment plan, people with knowledge of the hirings said... Read more

New gas contract with China could be signed on May 9. Gazprom and CNPC are working on finalizing a deal to provide gas from Russia to China via the Altai pipeline. The agreement could be signed during Chinese President Xi Jinping’s visit to Moscow for Victory Day... Read more

Internet giant Yahoo is closing its China office as part of a worldwide consolidation aimed at cutting costs... Read more

Indian Companies Look to Wives to Fill Female Board-Member Requirement. Companies listed on Indian stock exchanges have two weeks to get a woman on their board of directors before the regulator’s deadline for doing so. Nearly one in three of the firms listed on the National Stock Exchange has yet to meet the target while others have found a way to meet the requirement: appoint wives and other female relatives... Read more

India’s Fight Against Big Pharma Patents Is a Just War... Read more

Opinion - Peter Cai: Managing China’s debt mountain... Read more

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