ASB Securities Morning Brief for Wednesday, 30 September 2015
Wednesday, 30 September 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares fell in a global sell off amid fears that China's economic growth is slowing. Spark New Zealand, MightyRiverPower and Australia & New Zealand Banking Group were among decliners. The S&P/NZX 50 Index fell 86.7 points, or 1.5 percent, to 5612.43. Within the index, 40 stocks fell, four rose and six were unchanged. Turnover was $140 million... Read more

The New Zealand dollar extended its decline in local trading as weaker commodity prices weighed on currencies linked to the production and export of raw materials. The kiwi fell to 63.06 US cents at 5pm in Wellington from 63.32 cents at 8.30am, and down from 63.99 cents yesterday. The trade-weighted index declined to 68.97 from 69.79 yesterday... Read more

There’s optimism on the horizon for New Zealand exporters, despite the global commodity price slump and slowing growth in China. Those that have survived the global financial crisis, as well as years of a sustained high New Zealand dollar, are confident about penetrating the Chinese and South East Asian (ASEAN) markets, according to ExportNZ’s chief executive Catherine Beard... Read more

Economic growth has taken a hit but is still likely to remain at around 2 percent per year, according to the BusinessNZ Planning Forecast for the September 2015 quarter. BusinessNZ Chief Executive Phil O’Reilly says 2 percent growth is better than in many other countries, but risks still remain... Read more

Low interest rates look set to continue as the Reserve Bank’s annual report emphasises the importance of maintaining a flexible monetary policy in the face of global economic challenges.... Read more

The Governor of the Reserve Bank (RBNZ) is reiterating his fears over what would happen if the Auckland housing market suffered a big correction. In the RBNZ’s 2014/15 annual report released today Graeme Wheeler says, “We are conscious of the impact that low interest rates and aggressive lending competition among banks can have on housing demand and its potential to feed into house price inflation... Read more

Good news for property buyers comes in Massey University’s latest findings on home affordability which show there has been a slight improvement in affordability since June.... Read more

AMP implores non-contributors to reconsider making regular KiwiSaver contributions... Read more

Finance Minister Bill English has given a broad-ranging speech on Auckland's housing affordability problems, focusing on the effects of Council planning and infrastructure spending decisions on house price volatility and inequality... Read more

Risk of house price crash in eight years: English... Read more

Waikato dairy co-operative Tatua said its annual earnings before tax fell by 11.1 per cent to $121.2 million, reflecting declining commodities prices. The result equated to earnings of $7.73 per kg of milksolids, before retentions and tax, down from last year's record of $10.32 a kg... Read more

Palm kernel knotty issue on Fonterra agenda. Fonterra executives will have their work cut out convincing farmers to reduce their use of what has been a key feed supplement over the past 10 years - palm kernel. The co-op last week said it was taking steps to "future proof" the co-operative's position as a world-leading and trusted producer of pasture-based milk products.... Read more

Infratil and the New Zealand Superannuation Fund will sell almost one third of Z Energy in a coordinated sale, rounding out a profitable five-year investment in the former Shell petrol station assets that were spruced up and listed on the NZX in 2013. Infratil will sell its 20 percent cornerstone holding via an overnight book build process, offering 80 million shares at between $6 and $6.20, a discount to Z Energy's $6.63 record high closing price. NZ Super will sell its 9.73 percent, or 38.9 million shares, into the same book build, reducing its holding to just over 10 percent... Read more

New Talisman Gold Mines is seeking legal advice after a Chinese investor failed to settle on the purchase of about 183 million shares in a transaction that would have provided $1.46 million toward the development of the Talisman gold mine project in New Zealand's Hauraki district... Read more

Outdoor retailer Kathmandu is facing pressure to perform in the coming financial year after a poor 2015 full-year result. Despite this, chief executive Xavier Simonet is optimistic... Read more

Shareholders of Mykris Limited, the NZAX-listed, Malaysian managed internet services specialist, have approved what effectively amounts to a management buy-out of the assets that will leave the company as a cashed-up shell available for a back-door listing. At the annual meeting in Auckland today, shareholders voted in favour of selling the company's two subsidiaries to its majority Malaysian shareholder, Mykris International Sdn. Bhd for $12.9 million and then transferring back to the company up to 80 percent of its shares and $480,000 in cash... Read more

Cooks Global Foods seeks independent directors ahead of NXT listing... Read more

Plans for a sharemarket float of the Carters building supplies chain have been shelved amid ongoing market volatility that saw stocks tumble on exchanges from New Zealand to Japan yesterday. Concern about China's slowing economy, weak commodity prices and uncertainty surrounding the outlook for United States interest rates are keeping markets on edge... Read more

Roboadvice may be too expensive to pay off. Commercial constraints may put the brakes on on roboadvice reaching its full potential for now, it has been suggested... Read more

The Board of the kiwifruit industry regulator Kiwifruit New Zealand has today announced the appointment of Kristy McDonald QC as its new Chair. New leadership at Kiwifruit New Zealand. The Board of the kiwifruit industry regulator Kiwifruit New Zealand (KNZ) has today announced the appointment of Kristy McDonald QC as its new Chair... Read more

Comvita, the manuka honey products maker, has tapped chief operating officer Scott Coulter to replace outgoing chief executive Brett Hewlett, taking over the task of more than doubling annual sales over the next five years. Comvita shares were unchanged at $6.50 and have gained some 76% since the start for the year.... Read more

Synergy, the new class DIMS offer from FANZ and Consillum has appointed a business development manager to work with advisers.... Read more

Russell McVeagh partner Pip Greenwood has been named as a finalist in the Westpac Women of Influence Awards for 2015. The Women of Influence programme recognises and celebrates women who make a difference. It is "committed to increasing the visibility of women's leadership in New Zealand."... Read more

CNN buys NZ-made Altus drone for aerial news-gathering trial... Read more

Complaints about financial advisers to the Insurance and Savings Ombudsman scheme primarily relate to fees and advice processes, its latest annual report shows.... Read more

GCSB willing to extend cyber-attack programme to local ISPs... Read more

Knauf, the German building materials firm, and Fletcher Building, New Zealand's dominant building supplies company, have returned to court for a cross appeal, the latest instalment of their long-running dispute over the use of the word "batts" to describe insulation... Read more

High Court reverses FMA deregistration of Wewege's Vivier. In a major blow for the Financial Markets Authority's (FMA) campaign to stop foreign financial services companies from falsely promoting themselves as 'Made in New Zealand', the High Court has ruled in a test case the FMA over-stepped its discretionary authority and used 'scanty' information to deregister one firm... Read more

Auckland Council has racked up more than $100,000 on lawyers in an ongoing battle with activist Penny Bright over $33,372 in unpaid rates and penalties. The council has hired Simpson Grierson senior litigation partner William Akel to fight a defamation claim by Ms Bright against council chief executive Stephen Town... Read more

Analysis - Benje Patterson: Benje Patterson singles out six regions thriving despite (or because of) the dairy downturn. Meat, horticulture, seafood and tourism -based industries are helping drive confidence and investment... Read more

Opinion - Liam Dann: Global plans for Pumpkin Patch undone by changing times... Read more

Australian Headlines

Australian Market Report: Stocks plunge 3.8% on resources rout. At the 4.15pm (AEST) official market close, the S&P/ASX200 index had slumped 195.1 points, or 3.82 per cent, to 4918.4, while the broader All Ordinaries had lost 187 points, or 3.63 per cent, to 4958.1. ... Read more

The Australian dollar has fallen well below 70 US cents as weak economic data from China dented confidence, sent share markets plunging and weighed on commodity prices. At 1700 AEST on Tuesday, the local unit was trading at 69.47 US cents, down from 70.33 cents on Monday.... Read more

The data flow picks up this week with most interest focused on retail sales coming up on Friday, which worryingly went backwards at the last reading. Falling prices in fresh and packaged food brought a bit of deflation to the table and kept a lid on the value of retail sales in July... Read more

Australia is coping "incredibly well" against various international headwinds, says Scott Morrison, as the stock market suffered its worse drop in a month. Renewed global concerns about a slowing Chinese economy has seen shares fall nearly four per cent, while the dollar has struck a six-and-a-half year low... Read more

Recession risk doth not a recession forecast make says JP Morgan... Read more

Soaring housing prices are hurting homebuyer confidence, making them more reluctant to buy a home. The latest Genworth homebuyer confidence survey shows that the number of people who believe it is a good time to buy a home fell to 48 per cent in September, from 52 per cent six months ago... Read more

The International Monetary Fund has warned that commodity exporting countries like Australia face a further economic slowdown over the next two years if commodity prices keep falling.... Read more

Minister for industry and innovation, Christopher Pyne, believes the nation must push resources from sectors in decline to growth industries.... Read more

New Federal Resources and Energy Minister Josh Frydenberg has warned the oil and gas industry he is in favour of his predecessors’ ‘use it or lose’ approach to retention leases as he ponders whether to renew ExxonMobil and BHP Billiton’s ownership of the big Scarborough gas field... Read more

OceanaGold's takeover of Toronto Stock Exchange-listed Romarco Minerals has been approved by shareholders of both companies, in a move expected to create the market's lowest-cost gold producer... Read more

Metgasco is shooting in November this year 2D seismic at its Northern Rivers petroleum exploration licence PEL16 in New South Wales. This will provide more definition of the northern extent of the Greater Mackellar conventional / tight gas exploration prospect... Read more

Shares in Glencore PLC jumped on Tuesday after the commodities giant said it remains operationally and financially robust with "absolutely no solvency issues." Shares in the Swiss company rose 20 per cent to 82.5 pence a share as a result, making the commodities trader and miner the top performer of the UK's blue chip FTSE 100 index... Read more

Shares in Rox Resources bucked the trend today after announcing encouraging drilling results from its Reward project in the Northern Territory. Rox shares were up 0.1 cents, or 5.56 per cent, to 1.9 cents at the close after hitting two cents in earlier trade.... Read more

BHP Billiton Ltd, the world's biggest miner, says a global agreement on climate-change action would slow but not stop demand growth for most of the commodities it produces. Revealing projections for the first time as December's Paris Climate Conference nears, BHP Chief Commercial Officer Dean Dalla Valle assured investors in London on Tuesday that the company has "stress-tested" its global resources business, which includes coal mines and oil fields... Read more

Construction giant CIMIC's Leighton Contractors unit has secured a two-year project from Australia Pacific LNG for gas field development works in Queensland's Surat basin... Read more

RungePincockMinarco forms partnership with Russia’s EnterChain... Read more

Bonus on offer for Atlas boss. Atlas Iron shareholders will be asked to approve a bonus equivalent to managing director David Flanagan’s annual salary if he can find a way to pay off or refinance its debt, or finds a buyer for the company... Read more

Cash Converters boss Peter Cumins is the latest WA company director to see value in the tumbling share price of his company. A change of director’s interest notice lodged with the ASX this morning showed Mr Cumins had spent $98,339 buying an extra 200,000 shares in the company on the market at an average price of 49 cents. Cash Converters shares were up two cents, or 4.12 per cent, to 50.5 cents at the close.... Read more

Steel and mining group Arrium is working with the South Australian government to find ways to expand its wholly-owned Whyalla port and to throw open the facilities to outside users. The pair hope to reach an agreement covering third-party applications for use of the Eyre Peninsula port and revise regulatory agreements to support new industries and infrastructure in the region... Read more

It’s cool that Australia can now claim to be leading the world on a per capita basis for the uptake of rooftop solar photovoltaics but decidedly uncool that we continue to make such a pig’s ear out of co-ordinating energy and carbon abatement policy. A major example of the mess Australia is making of integrating its approach to a vital issue can be found in Victoria... Read more

PolyNovo awarded contract to prove burn treatment viability... Read more

Kathmandu will shut its British stores and abandon expansion plans in Europe to focus on fixing its struggling Australian business. Newly-installed chief executive Xavier Simonet revealed the change in strategy alongside a halving of the outdoor goods retailer's full year profit on Tuesday. Net profit for the 12 months to July 31 fell 51 per cent to $NZ20.4 million ($A18.48 million), a slightly better result than Kathmandu forecast a month ago... Read more

NBN takes aim at satellite broadband leechers. NBN will equip itself with network monitoring tools to combat the potential for leechers sucking up high amounts of bandwidth on its soon-to-launch long-term satellite service... Read more

Hazer Group is raising up to $5 million through an initial public offering of 25 million shares priced at $0.20 each. The company has intellectual property rights to a technology (the Hazer Process) developed at the University of Western Australia that produces hydrogen and high purity graphite from methane in an environmentally friendly process... Read more

New fund plans to help Indigenous businesses compete for government tenders. Indigenous businesses that have traditionally struggled to win tenders stand to benefit from a new fund established to help them better compete in the marketplace. The Federal Government recently announced it wanted to award 3 per cent of its contracts to Indigenous firms by 2020... Read more

Governments potentially missing out on millions in tax annually from Uber: taxi industry report... Read more

Analysis - Ian Verrander: Glencore could be the resource sector's Lehman Brothers... Read more

Opinion - Ian Verrander: Can Turnbull navigate these treacherous economic waters? Australia is a small and poorly maintained vessel adrift on a turbulent economic ocean. Thankfully, we now have a Prime Minister with an intimate understanding of global economics and our place in the world, writes Ian Verrender... Read more

Opinion/Analysis - Debbie Haski-Leventhal: Yes, it is our business: Corporations can help on sustainable development goals.... Read more

International Headlines

U.S. Market Report: U.S. stocks were higher in late morning trading on Tuesday as shares of health care companies bounced back and data showed consumer confidence was at its highest since January. Concerns about the health of the global economy, however, persisted after weak data from China sparked a sharp selloff on Monday... Read more

North/South Americas Market Report: North and South American markets finished sharply lower today with shares in U.S. leading the region. The S&P 500 is down 2.57% while Brazil's Bovespa is off 1.95% and Mexico's IPC is lower by 1.28%... Read more

European Market Report: European markets finished sharply lower today with shares in France leading the region. The CAC 40 is down 2.76% while London's FTSE 100 is off 2.46% and Germany's DAX is lower by 2.12%... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Hang Seng gained 0.43% and the Shanghai Composite rose 0.27%. The Nikkei 225 lost 1.32%... Read more

Oil prices rose about 2 percent on Tuesday as expectations that U.S. crude inventories dropped in the latest week boosted prices after the previous day's slide. Oil got an early boost as U.S. equity markets rose on strong consumer confidence data in the world's No. 1 economy. As Wall Street retraced much of those gains, oil prices remained up... Read more

The price of copper dropped almost 2% on Tuesday and is close to its lowest level in six and a half years. The metal fell to $4,955 a tonne, just $100 above the level it reached in 2009 in the wake of the financial crisis... Read more

The U.S. Congress moved on Monday to rush legislation to President Barack Obama that avoids a government shutdown on Thursday as the new fiscal year starts while setting aside a bitter Republican feud over money for Planned Parenthood. The Senate kicked off the effort by advancing a measure to extend all previous agency funding levels until Dec. 11, in a bipartisan 77-19 procedural vote... Read more

U.S. single-family home prices rose in July, matching the pace of price gains in June but falling just short of expectations, a closely watched survey said on Tuesday. The S&P/Case Shiller composite index of 20 metropolitan areas in July gained 5 percent year over year. Economists polled by Reuters had projected a 5.1 percent gain... Read more

U.S. consumer confidence rises in September... Read more

The smartest investors this year have been in cash. For the first time since 1990, cash is outperforming stocks and even most bond funds, according to Bank of American Merrill Lynch.... Read more

Pimco Sees Fed 'Phantom Rate Hike'at Root of Market Volatility... Read more

Icahn urges Fed to get off zero, says 'treacherous path' undertaken... Read more

US aluminium giant Alcoa is planning to split its company into two in an effort to boost shareholder returns. One company will consist of Alcoa's upstream mining projects, including its bauxite, alumina, aluminium, casting and energy assets... Read more

Glencore said on Tuesday it was strong enough to ride out current volatility in commodity markets which helped to lift the mining group's shares by a fifth.... Read more

Bank of America Corp is planning "a couple of hundred" job cuts at its global banking and markets unit, the Wall Street Journal reported. The bank could announce the layoffs as early as Tuesday, the Journal said, citing people familiar with the matter... Read more

Twenty-First Century Fox Inc said it agreed to nominate ValueAct Capital Chief Executive Jeffrey Ubben for election to its board as long as the hedge fund maintains a stake of at least 5 percent in the film and TV company. ValueAct, which owns about 5.9 percent of Fox's Class B shares, and Fox also entered into a "standstill" agreement, Rupert Murdoch-controlled Fox said... Read more

Pipeline giant Energy Transfer Equity will buy rival Williams Cos Inc in a deal valued around $33 billion, nearly a third less than the same offer Williams had rejected in June for being too small. The takeover ends a pursuit stretching back to January and marks the first major buyout of a midstream company since oil prices crashed... Read more

AT&T Inc may take a charge estimated at $1.1 billion related to DirecTV's Venezuela assets in what is the latest U.S. company to confront the South American country's currency woes. The plunging value of Venezuela's currency cut nearly $3 billion in profit at U.S. blue-chip companies during the second quarter and prompted Procter & Gamble Co to remove its operations in the South American country from its consolidated financial reports... Read more

Yahoo said Monday it plans to go ahead with a spinoff of its Alibaba stake, no matter what the IRS says. Yahoo said in a public filing Monday it will complete the transaction by the end of the year. Yahoo owns about 384 million shares of Alibaba, worth about $23 billion. The spinoff is the centerpiece of CEO Marissa Mayer's plans to return cash to shareholders... Read more

Yahoo rises on decision to proceed with Alibaba stake spinoff... Read more

The U.S. has backed Facebook in its battle against the European Union, accusing Europe's top court of making "inaccurate assertions" about America's intelligence services. The U.S. mission to the European Union slammed the court for questioning a crucial data sharing agreement between the U.S. and E.U... Read more

Low-cost airline operator Wizz Air Holdings Plc raised its profit forecast for the year, citing strong performance during the European summer and an expanded network. The airline operator, however, cautioned on lower unit revenues continuing through the second half of the year ending March 2016, as lower fuel prices led to reduced air fares... Read more

The popular tourist destinations of Mykonos, Santorini and Rhodes will be among the first Greek islands to lose their preferential tax rates under the country's new bailout deal, the government said Monday. "As of October 1, sales tax rates equivalent to the rest of the country will apply on Rhodes, Santorini, Mykonos, Naxos, Paros and Skiathos," the finance ministry said... Read more

Dutch investigators raid Uber office in Amsterdam... Read more

French tycoon Tapie seeks 1.2bn euros damages over Adidas sale... Read more

The hyperactive news startup Business Insider has a new owner. German publisher Axel Springer, which lost out to Japan's Nikkei in the race to buy the Financial Times two months ago, is paying $343 million for 88% of the online publication... Read more

Volkswagen is preparing plans to fix up to 11 million diesel vehicles worldwide to ensure they comply with pollution limits. The company said Tuesday that it would tell customers soon whether their cars needed a refit, but it stopped short of announcing a recall and gave few details... Read more

Economic reforms rather than a turn to the East are at the top of Russia's current agenda, Civil Initiatives Committee Chairman Alexei Kudrin has said... Read more

Kenya Central Bank Sees Tight Policy Curbing Price Pressures... Read more

The Ibovespa rose for the first time in nine days, breaking its longest losing streak in three years, as valuations at the lowest since December lured bargain hunters... Read more

Commodities in crisis as Asian shares tumble and shipper files for bankruptcy... Read more

Cargolux is in talks with Boeing to buy five more 747-8F freighter jets, the head of Europe’s largest all-freight carrier said on Tuesday. Such a deal could be worth $1.9 billion at list prices. The aircraft would serve a planned joint venture between Cargolux and its 35 percent shareholder Henan Civil Aviation Development & Investment to be based in Zhengzhou, north central China.... Read more

Japan Tobacco Inc has agreed to pay 600 billion yen ($5 billion) in cash for Reynolds American Inc's Natural American Spirit tobacco business outside the United States, the two companies said in separate statements on Tuesday... Read more

Japanese Prime Minister Shinzo Abe pledged to push for further improvements in corporate governance, including urging companies to make more progress in unwinding cross-held shares... Read more

The Japanese firm, Hitachi, has agreed to pay $19m to settle charges by US regulators that it made improper payments to South Africa's governing party, the African National Congress. The US Securities and Exchange Commission says Hitachi paid millions of dollars to a front company for the ANC to secure contracts to build two power plants. Hitachi has not admitted the charge.... Read more

India slashed interest rates for the fourth time this year on Tuesday, a policy move aimed at shoring up economic growth in the face of rising global risks. The Reserve Bank of India cut the rate at which it lends to banks by 0.5 percentage points to 6.75%, a larger reduction than economists had expected. Two of the bank's previous cuts -- made in January and March -- were unscheduled surprises... Read more

Opinion - Paul R La. Monica: The stock market bull may not be dead yet. The calendar may still read September, but weary investors are already starting to get their hopes up for a so-called Santa Claus rally in the fourth quarter. The past three months have been brutal. The Dow, S&P 500 and Nasdaq have each plunged about 9% so far in the third quarter and are in the red for the year.... Read more

Markets vs. Economists: Who's Right on Fed Interest-Rate Timing?... Read more

Latest reports

Latest reports