ASB Securities Morning Brief for Wednesday, 22 July 2015
Wednesday, 22 July 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares rose, as A2 Milk Co rebounded from yesterday's selling. Auckland International Airport and Steel & Tube Holdings advanced ahead of earnings season. The S&P/NZX 50 Index rose 14.98 points, or 0.3%, to 5876.91. Within the index, 18 stocks rose, 22 fell and 10 were unchanged. Turnover was $80.9 million... Read more

The New Zealand dollar gained as investors weighed up the prospects for rate cuts on both sides of the Tasman before the Reserve Bank 's review on Thursday and after minutes to Australia's last review were interpreted as having a more pronounced easing bias. The kiwi gained to 65.90USc at 5pm in Wellington from 65.67USc at 8am and 65.61USc yesterday. It advanced to 89.60Ac from 89.12Ac yesterday.... Read more

NZ rising in global reputation stakes... Read more

RBNZ considers easing bank disclosure, loosens finance company rules... Read more

The Reserve Bank today began public consultation on changes to its regulatory requirements that it expects will improve the efficiency of bank supervision and reduce banks’ costs... Read more

High migration continues. Record levels of migrants continue to arrive in New Zealand, but the flow might ease off as the year goes on.... Read more

Students drive record migration... Read more

New Zealand tourism numbers spike to record high. New Zealand is inching closer to the three million visitor mark as the number of tourists visiting the land of the long white cloud increases again... Read more

Banks hit LVR brakes. Banks are closing the door on low-equity Auckland property investors, even before the Reserve Bank rules kick in. From October, Auckland investors will need 30% equity for every new loan. But some banks are acting early... Read more

Rental agencies with high-end portfolios are catering to overseas markets by hiring Chinese speakers and translating their websites. The inward investment from the emerging middle-class and super rich in China represents billions of dollars into the New Zealand real-estate market... Read more

Dairy industry facing a 'perfect storm' of excess supply warns Bill English... Read more

Federated Farmers president William Rolleston says progress made in the last few years on farming’s environmental impact can’t be sustained when farmers are making a loss. Speaking to the Local Government New Zealand conference today, Rolleston says if agriculture is to continue its contribution to New Zealand’s economy, it has to address the issues of productivity and environmental impact... Read more

The dairy downturn may have opened the door for tribal giant Waikato-Tainui to broaden their investment portfolio and continue to build their empire. They announced their annual result today, reporting a $123 million increase in the last financial year to $1.2 billion at a time when dairy struggled... Read more

Engaging with financial advisers has helped boost Nikko Asset Management’s retail funds under management more than 200% over the past 14 months, its managing director says.... Read more

Milford fund downgraded. Morningstar says its downgrade of Milford’s Trans-Tasman Fund reflects the fact that Brian Gaynor will have to adopt an unfamiliar strategy to manage its money... Read more

New Zealand's financial regulator is refusing to reveal exactly what it spent investigating Milford Asset Management and one of its traders for alleged market manipulation, claiming the costs in the case are "sensitive" and their disclosure possibly prejudicial... Read more

GeoOp graduates to NZX main board from NZAX... Read more

Merger risks to be aired at meeting. Disgruntled Alliance Group shareholders have gathered sufficient support to force a special meeting to discuss the potential benefits and risks of a merger with fellow co-operative Silver Fern Farms. Balfour farmer Jeff Grant, who with rural accountant and farmer Gaye Cowie has been gathering the required 5 per cent of proxy forms needed to force the special meeting, said they had sent 7 per cent to the company for verification... Read more

The New Zealand Venture Investment Fund, the Crown-funded start-up investor, has taken its 7.1 percent stake in ikeGPS inhouse, after Number 8 Ventures opted to distribute the shares at the end of the remote measurement tool maker's lock-up period... Read more

Kiwi cereal maker Smartfoods is about to shift into a new factory that will treble production capacity as part of a five year plan to boost revenue to $50 million from $15.7 million by jumping on a trend towards healthier eating... Read more

Jetpack flying machine maker Martin Aircraft is gearing up for commercial orders with 11 engineering job vacancies on its website... Read more

Open Country slashes dairy payout forecast... Read more

Chinese company Shanghai Pengxin's total farm assets in New Zealand are up for sale, including 16 farms and a conditional agreement to buy Lochinver Station - but they are unlikely to be sold. Because the company wants to restructure, the Overseas Investment Office (OIO) requires it to offer its assets for sale to New Zealanders... Read more

IAG 'underestimating' amount of cover needed to pay outstanding Canterbury quake claims. Analysts say New Zealand’s largest general insurer, Insurance Australia Group (IAG), is underestimating the amount of money it needs to put aside to finish settling Canterbury earthquake claims... Read more

Salt Funds Management has employed Randall Clement as an operations analyst.... Read more

Council shares up for debate. Sale of Ports of Auckland and airport stakes may be option to provide alternative finance.... Read more

NZ councils float wish-list for funding changes to reduce reliance on rates... Read more

Dunedin to Host 2016 LGNZ Conference... Read more

Internet company Orcon has paid an army soldier $25,000 after a long-running battle over a bogus debt. Soldier Brett Taylor hired a bailiff to visit Orcon and demand payment after a three-year fight which culminated in a successful Human Rights Review Tribunal case... Read more

Opinion - Greg Harris: Tax win for affordable housing. A pragmatic decision by Government has resulted in a win for the community housing sector. New legislation will see community housing providers eligible for charitable tax status... Read more

Opinion - David Parker: Nats bet house on trade deals. The NZ-China free trade agreement doesn't stop new restrictions on house sales to overseas buyers, but National's subsequent deals try to... Read more

Opinion - Gert Stander: Heavier burden of new safety legislation on farming and forestry... Read more

Opinion - David Chaplin: Inside Money: Treasury rounds up government cash cows for risk inspection. The so-called Crown Financial Institutions (CFIs) have generally been a boon to government books over the last few years, adding cream to the asset mix... Read more

Australian Headlines

Australian Market Report: Australian equities have eked out their sixth straight day of gains, cracking through the 5700-point level after investors saw more evidence of the Reserve Bank of Australia’s easing bias in meeting minutes today. At the 4.15pm (AEST) official market close, the benchmark S&P/ASX200 gained 19.8 points, or 0.35 per cent, to 5706.7, while the broader All Ordinaries index added 19.5 points, or 0.34 per cent, to 5688.5.... Read more

The Australian dollar continued to circle in a narrow range just above six-year lows today, ahead of crucial second-quarter inflation data and a speech by the central bank governor due tomorrow. At 4:51pm, the Australian dollar was trading at US73.58c, down from US73.86c late yesterday.... Read more

Stable unemployment dents rate cut chances, RBA minutes reveal... Read more

The Reserve Bank will keep a close watch on China's stock markets, the Greek debt crisis and soft local business investment to see if further rate cuts are needed. The RBA cut the cash rate to a historic low of two per cent in May and has left it there at its June and July meetings... Read more

Australia's business services sector has shrugged off economic turmoil in China and Greece, posting the biggest spending increase in more than three years. New figures from the Commonwealth Bank show that June sales across the business services sector - which includes items from office furniture to computers and industrial equipment - posted their strongest gains since May 2012... Read more

Research and development is the lifeblood of any company, any economy and therefore any government. If you fall behind with innovation, your pipeline of future profitable, taxpaying investments will also wane. But Australia has fallen behind in the number of patents being registered. And the failure rate for those investments in new technology is high — though the rewards are potentially enormous for those who get it right... Read more

APRA's home loan rule changes could push up rates by 0.65pc: analyst... Read more

A regular property market survey by National Australia Bank estimates that more than one-in-10 established properties in Victoria and New South Wales are being bought by foreign buyers, despite a prohibition on non-residents buying established homes... Read more

Australia opens door to major live cattle trade with China... Read more

Colin Barnett will use a leaders’ retreat in Sydney to resume his campaign for a GST shake-up, with the Premier to focus on what he says is a disincentive for States to invest in building their economies... Read more

Oil Search has lifted its production targets after achieving record quarterly output. The company's shares were up 27 cents, or 3.9 per cent, at $7.22.... Read more

Shares in Western Areas closed higher today on a strong operational performance by the nickel miner. Shares in the company hit a 52-week low of $2.66 earlier this month, off a 52-week high of $5.30 in September last year... Read more

BHP Billiton says 200 jobs will be created when it spends $US240 million on six extra tugs at Port Hedland and constructs a new eight-pen tug harbour at Hunt Point. The investment will also include the upgrade of workshop facilities, operational and service berths and two small boat moorings at the existing Nelson Point tug harbour... Read more

St George Mining will have initial results within days from its high impact drilling campaign at its wholly-owned East Laverton Property in Western Australia... Read more

Oz Minerals is hunting for acquisitions following its strongest quarterly copper production result in five years. But the Adelaide-based miner says it hasn't been able to find suitable assets, despite weakness in the resources sector... Read more

Australia’s biggest listed investment company says supermarket giant Woolworths’ profit focus aided its rivals... Read more

National Veterinary Care to raise $30M through fully underwritten IPO... Read more

Erin Resources to reveal strategic agreement. Erin Resources recently secured an option to wholly-acquire MGC Pharmaceuticals Ltd, a European medical and cosmetic cannabis company.... Read more

iSignthis Limited has partnered with eMerchantPay Group to address strict and increasingly challenging global Anti-Money Laundering (AML) and Counter Terrorism regulations... Read more

Echo Entertainment has beaten rival Crown in the high stakes game to redevelop Brisbane's Queen's Wharf. Crown issued a clipped one-line response acknowledging its defeat... Read more

ANZ’s finance chief has rejected analyst concerns over the bank’s ability to meet new capital requirements, saying the firm has a range of options to meet stricter regulatory guidelines... Read more

Smart Parking’s has entered into an extended services contract with existing client Matalan, a fashion and homeware retailer with over 200 stores across the UK. This reflects continued improvement of the company’s management services division as its technology is deployed into more of its managed services estate... Read more

Vodafone still struggling as half-year losses grow. Vodafone Australia lost around $184 million and 45,000 customers in its first half of this year despite declaring its turnaround complete five months ago... Read more

Australian IT business solutions provider ASG Group is preparing to divulge a major contract win, with the ASX granting the company a trading halt to prepare.... Read more

Panama-affected Queensland farmers want more help. Two Queensland banana farmers affected by a devastating fungal disease are still out of pocket despite being awarded more than $650,000 in assistance, their lawyer says... Read more

Commonwealth Bank boss Ian Narev says the bank is proud of its response to the scandal in its financial advice division, despite many victims still waiting for compensation... Read more

Nathan Tinkler liquidator hopes to recover $1.5m... Read more

Opinion/Analysis - Elizabeth Knight: Queens Wharf casino: James Packer may have pulled punches on Echo in battle of Brisbane... Read more

Opinion - Michael Pascoe: Small business tax break party a fizzer. RBA minutes reveal no one is coming to the small business tax break party... Read more

International Headlines

U.S. Market Report: Shares in IBM and United Technologies opened lower following disappointing results, pulling the Dow Jones lower. In early trade, the Dow Jones fell 124 points at 17,976.41, with IBM down 5.1% and United Technologies 5.4% lower.... Read more

North/South Americas Market Report: North and South American markets are lower today with shares in Brazil off the most. The Bovespa is down 0.51% while U.S.'s S&P 500 is off 0.45% and Mexico's IPC is lower by 0.27%... Read more

European Market Report: European markets finished broadly lower today with shares in Germany leading the region. The DAX is down 1.12% while France's CAC 40 is off 0.75% and London's FTSE 100 is lower by 0.29%... Read more

Asian Market Report: Asian markets finished higher today with shares in Japan leading the region. The Nikkei 225 is up 0.93% while China's Shanghai Composite is up 0.64% and Hong Kong's Hang Seng is up 0.51%... Read more

Oil has dropped below $US50 a barrel in New York trading and gold has fallen to a five-year low as commodities respond to selling pressure. Spot gold traded down 1.9% at $US1113.19 an ounce as the prospects of a rise in official US interest rates increased. Copper, silver and platinum also fell... Read more

California proposes $1.5 million water-rights fine... Read more

Citigroup Inc. has been ordered to pay an estimated $700 million to customers the Consumer Financial Protection Bureau says were harmed by illegal marketing and billing practices. Citi and its subsidiaries will also have to pay $70 million in civil penalties to regulators... Read more

Apple App store, iTunes back up after outage... Read more

Facebook's stock hit another all-time high Tuesday -- just shy of $100. The social media giant's shares are up 25% this year ... and more than 160% from their 2012 initial public offering price. Facebook is now worth an astonishing $275 billion... Read more

Josh Greenberg, co-founder of music site Grooveshark, was found dead in his Florida home on Sunday, according to the Gainesville police... Read more

Tesla's stock price has officially gone into "ludicrous" mode. At least that's the message from UBS, which is urging investors to slam the brakes on Tesla. The investment bank slapped a rare "sell" rating on the Elon Musk company on Tuesday... Read more

The Federal Trade Commission on Tuesday charged LifeLock an identity-theft monitoring company, with failing to protect its customers’ data and falsely claiming to alert them about problems. Shares fell more than 37% to $10 in afternoon trading.... Read more

Greece: Next steps before it can get bailout... Read more

Scott Wede, Barclays Plc’s New York-based global securitized-products trading head, is retiring more than a decade after joining the British bank as foreign lenders used a wave of hiring to become competitors in the U.S. bond business... Read more

Royal Mail has reported flat revenues in the three months to 28 June as UK letter volumes continued to decline. The trading update comes ahead of the final sale of the government's 15% stake in the 500-year old company. Royal Mail said UK letter volumes declined by 5% in the quarter with revenue down 4%. But that was in line with forecasts.... Read more

Deutsche Bank: The Simplest Economic Law Explains Stock Market Rallies Around the World. It's all about supply and demand... Read more

Russia is the best bet for investment among BRICS countries in 2015, according to Bloomberg... Read more

A new $100 billion international bank dedicated to the emerging BRICS countries opened in China's commercial hub Shanghai on Tuesday, officials said, as an alternative to other multilateral lenders... Read more

Toshiba's chief executive and president Hisao Tanaka has resigned after the company said it had overstated its profits for the past six years. He will be succeeded by chairman Masashi Muromachi, with vice-chairman Norio Sasaki also stepping down... Read more

Indian software giant Infosys Technologies reported a five percent rise in quarterly net profits on Tuesday, aided by a weak rupee and strong demand from the United States. The country's second largest IT services exporter said profits for April to June notched 30.3 billion rupees ($476 million), up from 28.86 billion rupees in the same period last year and matching exactly a Bloomberg survey of 35 analysts... Read more

AirAsia’s Secret Strategy in India... Read more

Analysis - Jennifer Booton: What to watch for in Apple’s earnings... Read more

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