ASB Securities Morning Brief for Friday, 21 August 2015
Friday, 21 August 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares fell, led by A2 Milk Co after the milk marketer failed to update investors on any takeover action. Skellerup Holdings and Trade Me Group advanced after reporting better than expected full year earnings. The S&P/NZX 50 Index decreased 7.58 points, or 0.1 percent, to 5742.45. Within the index, 21 stocks fell, 22 rose and seven were unchanged. Turnover was $153 million... Read more

The New Zealand dollar may push higher after minutes to the last Federal Reserve policy meeting eroded investors' expectations for a US interest rate hike next month, and as dairy futures indicate another strong gain in the price of whole milk powder, the nation's major export commodity. The kiwi traded at 66.14 US cents from 66.08 cents at 8am and up from 65.79 cents yesterday. The trade-weighted index advanced to 71.16 from 70.95 yesterday... Read more

New Zealand consumer confidence fell for a fourth month to its lowest level in three years as sentiment weakened on the prospects for the year ahead. The ANZ Roy Morgan consumer confidence index fell to 109.8 in August from 113.9 in July, the lowest level since mid-2012. The futures conditions index fell to a 6 1/2 year low of 104.9 from 110.4, while the current conditions index slid to 117.2 from 119... Read more

New Zealand may be heading for a recession. That's the verdict from Credit Suisse analyst Chris Green, who said crashing dairy prices and shaky Chinese economic growth have pushed the country close to a recession... Read more

DairyNZ chairman John Luxton writes that major TPP players are holding their dairy consumers to ransom The news that the Trans Pacific Partnership (TPP) deal has not been agreed because of differences over autos, dairy and intellectual property is no surprise to anyone... Read more

Big banks' lending growth tops deposit growth for 2nd straight quarter. New Zealand's current account deficit could be heading north based on what may be an emerging trend outlined in PwC's latest bi-annual Banking Perspectives report.... Read more

Migration is easily the biggest driver of population growth in this country which means it has a major impact on the property market. In the year to June, migration increased New Zealand’s population by 58,259 people... Read more

A group representing landlords with $40 billion-plus of real estate welcomed the Government's 30-year infrastructure plan but wants funding problems addressed. Property Council chief executive Connal Townsend said the new plan was a great step forward in planning and gave the development community better certainty... Read more

Tolling to play growing role in infrastructure cost control: English. Charging users for some types of public infrastructure will increasingly feature as a way to save taxpayers much larger bills to meet future needs, but "should never be used simply to raise revenue," says Finance Minister Bill English... Read more

A2 Milk eyes infant formula for sales growth as ASX listing costs lead to loss... Read more

Beef + Lamb pleased with health and safety changes... Read more

Investors who own shares in private companies or units in property, farm or forrestry syndicates could soon be able to trade them more easily through a new online exchange. Syndex, a company set up by four Kiwis with backgrounds in rural business, equity markets, trading and property has gone live with farm syndicator MyFarm the first to sign up to the exchange... Read more

Industrial rubber goods firm Skellerup Holdings lifted annual profit 6%, beating expectations, as a focus on the US, China and South American markets offset a downturn in Australia and New Zealand. The Auckland-based company says profit rose to $21.9 million in the year ended June 30, from an underlying profit of $20.7 million the year earlier, which excluded a one-time gain of $20.4 million from a Canterbury earthquake insurance claim. Sales rose 3% to $203 million... Read more

An initial public offer and float of NZME - publisher of the New Zealand Herald - is still a possibility, says the company's owner, Sydney-based APN News & Media. APN's newly appointed chief executive, Ciaran Davis, in releasing the company's result for the six months to June, said APN would re-evaluate a possible float and make a decision in February next year... Read more

Genesis Energy confirms end to Solid Energy coal contract... Read more

WhosOnLocation plans capital raise as US plans accelerate... Read more

Port of Tauranga felt the chill wind of a commodities downturn in its result for the year to June 30, posting a modest 1 per cent improvement in net profit to $79.1 million. The result was in line with an earnings guidance given by the company in February. Operating revenue rose to $268.5 million from $266.5 million.... Read more

Port of Tauranga is confident that its plan to expand its catchment and attract bigger ships will offset any downturn in dairy exports. The port has posted an almost flat net profit for the year to June 30, rising 1 per cent to $79.1 million in line with guidance. The port chief executive Mark Cairns also is unconcerned about a move by rival Ports of Auckland to set up an inland hub on its patch in Mt Maunganui... Read more

South Port New Zealand, the Bluff port operator, lifted annual profit 16 percent as stronger cargo flows bolstered the hub's volumes, though the company anticipates the slowing economy will sap earnings in 2016... Read more

AMP Financial Services New Zealand lifted first-half operating profit 9% by keeping control of costs while improving management of insurance claims, it says. Operating profit rose to $64.6 million in the six months ended June 30, from $59 million a year earlier, the Auckland-based company said in a statement... Read more

Jetstar NZ profitable for the first time, as Qantas back in the black... Read more

Large Australian home improvement and hardware supplier Bunnings New Zealand has announced almost $900 million of sales for the June 2015 year. The $899m of sales was a record for the big Perth-owned retailer and 10 per cent ahead of the previous year's $813m, its general manager Jacqui Coombes said... Read more

QROPs rules snag NZ advisers. New British rules are stopping New Zealand QROPS pension transfers in their tracks.... Read more

nib backs health insurance bill. Health insurer nib has lent its support to a bill that would require parent category migrants to have health insurance, and maintain it for 10 years.... Read more

Insurance companies worry about reputation in New Zealand. Christchurch's earthquakes have left many New Zealand insurers worried what customers think of them. PWC has released the results of a survey asking insurers to identify the top 10 risks facing their industry. Forty-three New Zealand insurance industry professionals responded... Read more

Brazilian meat processor JBS is offering a 4.5 percent premium to buy a controlling stake in industrial automation manufacturer Scott Technology as part a capital raising to cut the Dunedin based company's debt levels... Read more

Economist gives Wellington vote of confidence. Wellington offers good opportunities for investors, first home buyers, and people looking to free up cash outside Auckland according to BNZ’s chief economist Tony Alexander.... Read more

Intensification plans: Auckland Council speaks out. Maximising land use through intensification is part of the solution to the tough problem of Auckland’s supply shortage, says Auckland Council’s chief economist... Read more

Kepa's head of marketing and communications Nicola Smee is to step down.... Read more

Dairy Women’s Network is thrilled to welcome two new partners aboard to assist the Network in offering education and support to dairy farming women.... Read more

Labour takes 5 point hit in Roy Morgan poll after Chinese buyers gambit... Read more

Fletcher boss Graham Darlow sorry for Irish slur. Fletcher Construction chief executive Graham Darlow has apologised to the Irish community after suggesting that some builders who carried out shoddy repair work on Christchurch earthquake damaged homes had "gone back to Ireland"... Read more

FMA told to hand seized wedding ring back. A woman connected to a gold trader whose firm is being investigated by the Financial Markets Authority has had a wedding ring said to be worth $92,000 returned to her by order of a High Court judge.... Read more

Bankrupt developer Dave Henderson says he could cope with getting back into business under court supervision. Henderson, 60, is under public examination in the High Court in Christchurch before Associate Judge Rob Osborne to decide if he can be discharged from bankruptcy. The examination is in its third week and was adjourned on Thursday to October 27... Read more

Opinion - Christopher Adams: Western China ripe for business opportunities... Read more

Opinion - Keith Cooper: Keith Cooper points out that farmers only want cost savings, are reluctant investors in brand building to create value. He says MIE should notice Fonterra's missteps... Read more

Opinion - Mark Lister: NZ could learn from Australian example. Transtasman neighbour's experience gives valuable lessons for our policymakers and insights for investors... Read more

Dominion Post Editorial: Charging tax on imports would help level playing field. The internet has brought the markets of the world into New Zealand houses. We take for granted our right to buy books from Amazon, music from iTunes, and movies and TV shows from Netflix. Our lives are better and richer for it... Read more





Australian Headlines

Australian Market Report: The Australian sharemarket fell three-quarters of a per cent at the open, weighed down by weak leads from Wall Street, downbeat company earnings and lingering concerns over the Chinese economy. At the 10.15am (AEST) official market open, the benchmark S&P/ASX200 index fell 40.5 points, or 0.75 per cent, to 5339.7 points, while the broader All Ordinaries index lost 38.1 points, or 0.71 per cent, to 5341.7 points.... Read more

The Australian dollar is flat after it bounced back following the release of the minutes of the US Federal Reserve’s July policy meeting. At 7am (AEST), the local unit was trading at US73.50 cents, slightly down from US73.53 cents yesterday... Read more

August has turned into a horror month for investors with the ASX 200 down 7.2%... Read more

Aussie Gold leaps over A$1540 an ounce... Read more

Spending is surging across the economy, helped by the small business measures in the May federal budget. In July, spending was up 1.2 per cent, the fastest pace in four months, and was up 7.4 per cent on a year ago, the Commonwealth Bank's seasonally-adjusted Business Sales Indicator (BSI) showed... Read more

AV Jennings wants stamp duty axed... Read more

The corporate regulator is cracking down on interest-only home loans, saying it has uncovered that a worrying proportion of those with this type of mortgage could be at risk of default. The Australian Securities and Investments Commission (ASIC) has completed a nine-month probe into interest-only home loans issued by 11 lenders, including the big four banks... Read more

Stock market operator Chi-X Australia may be able to start quoting and trading warrants and exchange traded funds after the corporate regulator proposed changes to its market integrity rules. The Australian Securities and Investments Commission today put out a consultation paper outlining the planned rule changes in a bid to apply consistent regulations for trading of the products on the Chi-X stock exchange... Read more

The a2 Milk Company is ramping up its investment in clinical trials to combat arguments that its health claims are unfounded.... Read more

Gold miner Saracen Mineral Holdings has swooped on the mothballed King of the Hills underground mine near Leonora as part of a $3 million deal with St Barbara.... Read more

Armour Energy draws US$100M farm-in from American Energy Partners... Read more

The battle for control of Phoenix Gold has taken another twist with Evolution Mining this morning moving to gazzump a Chinese suitor. Evolution, which also owns 19.8 per cent of the target to be in a strong position, says it will offer Phoenix investors a mix of shares and cash... Read more

Mineral Resources’ final dividend has fallen sharply after the miner and mining contractor’s full-year profit slumped 94 per cent to $12.8 million... Read more

Tatts Group will roll out 50 revamped wagering outlets under the new UBET name by the end of 2015 in a bid to reverse the declining performance of the group's bricks-and-mortar betting shops. Tatts annual net profit rose by 25.7 per cent to $251.96 million in the year to June 30, from $200.4 million in 2013/14. The group's lotteries business lifted revenue and earnings in a record performance.... Read more

Wesfarmers presses its advantage. Outstanding growth from Coles and Bunnings has heightened expectations of another embarrassing defeat for Woolworths. (video only)... Read more

Origin Energy will cut around 800 jobs and has flagged further weak earnings growth after falling oil prices contributed to a $658 million loss. Shares in the producer and retailer plunged to a seven year low as it foreshadowed intense retail competition and outlined massive cost cuts.... Read more

Online travel company Webjet is targeting the US business market and looking for further acquisitions after lifting full year underlying earnings 20 per cent. The company will invest $3 million in its business-to-business ventures, which sell to companies rather than directly to consumers, in the 2015/16 financial year... Read more

Qantas shareholders and employees will get to share in the spoils of the airline’s $975 million underlying profit for 2014-15. The Qantas Group has announced the outstanding result today and a $789 million statutory profit, a year after posting its worst loss on record of $2.8 billion last year... Read more

Qantas shares touch 7-year high... Read more

Southern Cotton: cottoning on to a $26m sector renaissance... Read more

Seek thanks $26m IT investment for record profit... Read more

Shares in trans-Tasman radio and newspaper group APN News & Media have been pummelled after it unveiled a slide in first half profit. The trans-Tasman group, which owns the KIIS, iHeartRadio, and Pure Gold radio networks, saw net profit slide 67 per cent to $7.5 million in the six months to June 30, from $22.6 million in the previous corresponding period... Read more

Wealth management giant AMP is determined to improve the quality of advice it gives consumers who remain wary of an industry publicly shamed for costing them millions with dodgy guidance. Announcing a 33 per cent increase in first half net profit to $507 million, AMP acknowledged that it is working to restore trust in the financial advice profession in the wake of a scandal that led to the big banks forking out compensation and appearing before a Senate committee... Read more

Connexion Media has raised $2 million through the issue of convertible notes to sophisticated and professional investors. This adds to the $1.1 million in cash it has as at 30th June 2015... Read more

iiNet-TPG merger gets ACCC green light. Australia's competition regulator has overcome initial concerns about the merger of internet service providers iiNet and TPG to give its stamp of approval to the tie-up... Read more

Logistics giant Brambles will increase its capital investment by $US1.5 billion over the next four years. The pallet and container provider lifted full-year underlying profit three per cent to $US985.8 million and expects another rise despite uncertainty over demand in the US, but the company will now increase capital investment through 2018/19 by more than the five per cent previously forecast... Read more

Aussie agencies warned against buying from tax-dodging tech giants. Technology giants like Apple, Google and Microsoft should be made to declare where they call home for tax purposes when bidding for Australian government work so agencies can avoid tax dodgers, a senate committee has recommended... Read more

The unions royal commission will almost certainly continue its work even if commissioner Dyson Heydon stands down. Unions will appear before the commission in Sydney on Friday to ask the former High Court judge to disqualify himself from presiding over the inquiry into corruption and misconduct within their ranks... Read more





International Headlines

U.S. Market Report: Stocks got hit hard Thursday. All the major indexes are in the red. The S&P 500 is down 1%, the Nasdaq dropped 1.7% and the Dow fell over 220 points. It's a worrisome sign given that global stock markets, such as the U.K.'s benchmark index, has entered a correction -- a 10% drop from its peak in just four months. The Dow is down 6% from its peak in May... Read more

North/South Americas Market Report: North and South American markets are broadly lower today with shares in U.S. off the most. The S&P 500 is down 1.73% while Mexico's IPC is off 1.60% and Brazil's Bovespa is lower by 0.62%... Read more

European Market Report: European markets finished broadly lower today with shares in Germany leading the region. The DAX is down 2.34% while France's CAC 40 is off 2.06% and London's FTSE 100 is lower by 0.56%... Read more

Asian Market Report: Asian markets finished broadly lower today with shares in China leading the region. The Shanghai Composite is down 3.42% while Hong Kong's Hang Seng is off 1.77% and Japan's Nikkei 225 is lower by 0.94%... Read more

Oil prices slid to a fresh six and a half year low in Asia Thursday, approaching the key $40 a barrel level after a surprise rise in US inventories added to concerns of a supply glut. US benchmark West Texas Intermediate (WTI) for delivery in September, which expires Thursday, dipped 21 cents to $40.59 in afternoon trade after falling sharply in New York to its lowest level since March 2009. Brent crude for October dropped 28 cents to $46.88 a barrel.... Read more

U.S. home resales rose to a near 8-1/2-year high in July and factory activity in the mid-Atlantic region picked up this month, fresh signs of steady economic growth that likely keeps the Federal Reserve on track to raise interest rates this year. While other data on Thursday showed a slight increase in the number of Americans filing new applications for unemployment benefits last week, the trend remained consistent with strong labor market momentum... Read more

Wall Street fights to keep its $17 billion retirement tax... Read more

By manipulating its search results, Google could decide the next election. The world's most-used search engine is so powerful and national elections are so tight, that even a tiny tweak in Google's secret algorithm could swing the 2016 presidential election, according to Robert Epstein, senior research psychologist at the American Institute for Behavioral Research and Technology... Read more

It's hard to imagine things getting much worse for Twitter. But the stock is now trading below the price that Twitter sold shares for when it first went public.... Read more

Deere & Co said on Thursday that production has resumed at its facilities near Tianjin after a massive chemical explosion ripped through the Chinese port town last week. Deere said it was still repairing windows, doors and building components at its campus, six miles from the Tianjin explosion site... Read more

Merrill Lynch in hot water over Qualcomm insider trading saga. Industry regulators are investigating Bank of America Merrill Lynch over its purported failure to prevent one of its financial advisers covering up the money laundering activities of a Qualcomm executive in 2012... Read more

Sprout Pharmaceuticals, which won federal approval this week for its female libido pill, is being bought by Valeant Pharmaceuticals for $1 billion. The deal comes two days after Sprout received approval from the Food and Drug Administration for Addyi... Read more

Senators urge recall of all vehicles with Takata air bags... Read more

Prime Minister Alexis Tsipras resigned on Thursday, hoping to strengthen his hold on power in snap elections after seven months in office in which he fought Greece's creditors for a better bailout deal but had to cave in. Tsipras submitted his resignation to President Prokopis Pavlopoulos and asked for the earliest possible election date... Read more

Germany wants IMF involved in Greek bailout for reform rigour: sources... Read more

UK stocks have fallen 10% since April... Read more

UK car production falls in July after holiday change... Read more

Norwegian pensioners just lost $8.8 billion. Norway's pension fund, the world's largest sovereign fund, lost 73 billion kroner ($8.8 billion) in the second quarter. The 0.9% decline -- its first losses in three years -- came because of low interest rates, weak bond markets and falling returns on U.S. stocks... Read more

The troubled Co-operative Bank says it will not make a profit for another two years as it reports another loss. Pre-tax losses for the first six months of the year were £204.2m, compared with losses of £77m a year earlier. The figure was slightly better than expected. It said it was now in better shape to withstand economic stresses... Read more

Swiss watchmakers struggle on terrible Chinese sales... Read more

The oil price crash has claimed another victim. Kazakhstan's tenge plunged an incredible 23% on Thursday after the government allowed the currency to float freely.... Read more

Smartphone sales in China, the world's biggest market for the devices, fell in the second quarter for the first time, market research firm Gartner Inc said on Thursday. Sales of smartphones in China declined 4 percent in the quarter, the first year-over-year fall, the company said... Read more

Japan can't afford gifts for citizens turning 100... Read more

Japan's Kirin buys $560 mn stake in top Myanmar brewer... Read more

Opinion - Mark Hulbert: A Dow Theory sell signal is upon us... Read more

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