ASB Securities Morning Brief for Monday, 20 April 2015
Monday, 20 April 2015

New Zealand Headlines

New Zealand Market Report: New Zealand shares fell, paced by Australia and New Zealand Banking Group and Spark New Zealand, as weakness in the Australian stock market weighed on dual-listed companies. Fonterra Shareholders' Fund rebounded from a record low. The NZX 50 Index fell 20.275 points, or 0.3 percent, to 5861.482. Within the index, 25 stocks fell, 15 rose, and 10 were unchanged. Turnover was $128 million... Read more

The New Zealand dollar pared its gains against the greenback ahead of US inflation data, on concern a strong number could make up for a string of recent weak economic data and reignite talk of Federal Reserve rate increases. The kiwi dollar traded at 76.61 US cents as at 5pm in Wellington, having reached a three-month high of 76.97 cents overnight, from 75.94 cents yesterday. The trade-weighted index was at 79.83, having touched a nine-month high of 80.08, from 79.34 yesterday... Read more

Climate Change Issues Minister Tim Groser today led a coalition of governments calling for the phase-out of subsidies to fossil fuels in the lead-up to a major climate conference in Paris.... Read more

Developers given credit for being market’s risk takers and creators... Read more

Auckland property: Cashed-up and heading off. As house prices in the country's biggest city spiral out of control, Auckland homeowners are cashing in their chips and buying mansions in the regions.... Read more

Treasury and the Reserve Bank are at odds over whether a property tax is the answer to Auckland's over-heated property market.... Read more

Farmers face hard season - DairyNZ. Dairy farm bank balances will be heading into the red this winter and spring, producing some short-term but significant cashflow management challenges for farmers, says DairyNZ.... Read more

Hancock NZ upbeat on outlook for timber as local units post mixed results... Read more

International geothermal opportunities on the wish list. Selling the NZ geothermal story and seeking partnerships are top of the list for power companies and politicians travelling to Melbourne this week. Energy Minister Simon Bridges, along with 70 New Zealand businesses including the two major geothermal producers Contact Energy and Mighty River Power, will take part in a global geothermal congress in Melbourne... Read more

Westpac Group chief executive Brian Hartzer has embarked on a mission to transform the bank into a world-leading service company, with the Kiwi operations playing a Trojan horse role when it comes to innovations... Read more

Statistics New Zealand has launched a new section on its website aimed at helping small business find information about their competitors and target markets. The small business toolbox gives people access to information that was largely already available on the Statistics NZ website but was often difficult to find... Read more

HBO sends cut-off threat to NZ, Aussie HBO NOW users... Read more

New Zealand Post is eyeing another round of staff cuts and store closures, with workers already braced for job losses when urban delivery days halve from July. The state-owned enterprise has confirmed middle management jobs are next in line for cuts, and the current shape of its store network, now controlled by its Kiwibank arm, is not "fit for purpose"... Read more

The stand-off between Ports of Auckland and Auckland Council over a political call to stop work on two wharf extensions enters its fourth week today, with no sign of a solution in sight... Read more

$10b of projects reveal a new-look Auckland City. Investment over next decade will change face of Auckland but one critic says money best spent elsewhere... Read more

Motorway tolls the preferred choice to fund Auckland's ambitious transport plan... Read more

All Black captain Richie McCaw is flying high after becoming a director of commercial chopper company Christchurch Helicopters. McCaw is no stranger to the skies with his love of gliding and flying fixed-wing aircraft well known... Read more

A Wellington marine lights manufacturer is setting the world alight and hiring staff overseas. Porirua-based Vega Industries chief executive Arjen Maarleveld believes putting people on the ground overseas will help the business grow faster... Read more

IT, innovation and connecting with clients both historic and new underpin the fresh vision for economic development service – the Pacific Business Trust. Incoming Chief Executive, Rob Neru, says the Trust will aim to lift its productivity towards its clients by being more innovative and connecting with clients by using technology to its fullest potential... Read more

Bluelab Corporation, which makes electronic metering and control devices to aid plant growth, will use a new research and development growth grant to speed up taking a new sensory product to market in the next year.... Read more

A jewel in Nelson's culinary crown Neudorf Dairy has closed its doors after a successful decade in business. The number of gold medals Neudorf cheeses have been awarded outnumbers its 10 years in business, and its yoghurts have also been recognised nationally... Read more

Alex van Heeren loses long-running case, US$25 million interim payment ordered... Read more

Opinion - Vernon Small: Budget 'surplus' fades from view as Auckland property prices threaten... Read more

Opinion - Bernard Hickey: It's time renters used voting power... Read more

Opinion - Gareth Morgan: How to end the housing crisis. Gareth Morgan's view of a frustrated Reserve Bank that has finally spoken out on rocketing house prices... Read more

Australian Headlines

Australian Market Report: The Australian sharemarket closed the week deep in the red despite modest rebounds in iron ore and crude oil prices. At the 4.15pm (AEST) official market close, the benchmark S&P/ASX200 index was down 69.6 points, or 1.17 per cent, at 5,877.9, while the broader All Ordinaries index fell 66.1 points, or 1.12 per cent, to 5,851.5... Read more

The Australian dollar rose to its highest levels since the end of March today after data showed a surprisingly strong jump in employment. The Australian dollar was trading at US77.35c at 5pm (AEST). It was trading at US75.95c late yesterday... Read more

Treasurer Joe Hockey has refused to put a firm date on when the Budget would return to surplus, arguing a "quality trajectory" to eroding the deficit was his aim.... Read more

Australia and the United Kingdom will join forces to tackle profit shifting by multinational companies, in an effort to drive an international crackdown on the practice. Treasurer Joe Hockey and UK chancellor George Osborne have announced the establishment of a joint working group during the G20 Finance Ministers meeting in Washington... Read more

‘A complete load of rubbish’: Economists hit out at negative gearing myths... Read more

NSW economy remains on top. Bricks and mortar have cemented NSW as the country's strongest economy. The most populated state pushed Western Australia off the pedestal late last year, and is now the top performer for a third consecutive quarter, CommSec's State of the States report shows... Read more

The federal government is considering scrapping the $7500 cap on childcare rebates in exchange for cutting back the rebate for wealthy families... Read more

Deloitte says Queensland gas boom unlikely to light up other sectors. Queensland’s gas export bonanza is expected to boost state growth above the national average over the next few years but may not help the “average punter,” according to Deloitte Access Economics... Read more

Falling oil prices have caused a 24 per cent slide in quarterly sales for energy giant Santos, as it continues to cut costs. Santos shares gained three cents to $7.96.... Read more

Rio Tinto boss Sam Walsh has signalled the company will continue to pile the pressure onto smaller iron ore producers, telling investors in London overnight Rio will push ahead with plans to expand its Pilbara mines... Read more

Ensogo Limited has been granted an ASX trading halt for the purpose of conducting a bookbuild prior to making a share placement... Read more

A minerals exploration company is trying to position itself to become Australia's first legal medicinal marijuana grower. In an announcement to the Australian Stock Exchange, Capital Mining said it would pay Essential Oils of Tasmania $125,000 to take ownership of the Tasmanian company Cannabinoid Extracts Australia.... Read more

RTG Mining raises $15M to develop DSO copper-gold project... Read more

Optimism about Macquarie Group's earnings momentum is growing, as analysts anticipate the company will benefit from further growth in funds under management, volatility in financial markets and a lower Australian dollar. Macquarie reports its full-year earnings on May 8, and consensus estimates have net profit coming in at $1.51 billion. That fits with the company's guidance for earnings to print at the "upper end" of a forecast range of $1.4 billion to $1.52 billion for the year ended March 31... Read more

Australian "digital bank" start-up ChimpChange has chosen to disrupt US banks, given their high fees for transferring money, but the company is back home to raise funds with a planned listing on the Australian Securities Exchange in September. ... Read more

Fatfish Internet Group has valued its mobile games assets, which will be spun-off on the ASX under iCandy Interactive Ltd, at A$40 million.... Read more

US online business lender OnDeck to set up in Australia... Read more

Suncorp launches start-up insurance app into Aussie market... Read more

WA’s archaic “spud cop” faces the chop, with Colin Barnett declaring the Potato Marketing Corporation will be abolished within two years.... Read more

Banks 'plunder' travellers with forex fees on credit card transactions... Read more

Legal threat to banks over financial advice. Some of the country's biggest banks could face legal action from customers over their failure to provide all of the financial advice services that clients had paid for, plaintiff law firms say... Read more

Clive Palmer will sue his former Palmer United Party senator Glenn Lazarus for defamation after he claimed the party had considered a merger with the Liberal Party... Read more

Opinion - Matt Wade: Australian business makes slow progress.... Read more

International Headlines

North/South Americas Market Report: North and South American markets finished mixed to lower as of the most recent closing prices. Shares in Brazil fell as the Bovespa dropped 1.32%. The S&P 500 lost 1.13% while the IPC in Mexico closed unchanged... Read more

European Market Report: European markets finished mixed to lower as of the most recent closing prices. Shares in Germany fell as the DAX dropped 2.58%. The CAC 40 lost 1.55% while the FTSE 100 in London closed unchanged... Read more

Asian Market Report: Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 2.20%, while Japan's Nikkei 225 was off 1.17%. Shares in Hong Kong were unchanged with the Hang Seng at 27,653.12... Read more

World oil prices have run out of steam after six days of gains, amid concerns about abundant global supplies, heightened by quota-breaking OPEC production. West Texas Intermediate (WTI) for delivery in May sank 97 cents to close at $US55.74 a barrel on the New York Mercantile Exchange on Friday. Brent North Sea crude for June delivery, the global benchmark, settled at $US63.45 a barrel in London trade, down 53 cents from Thursday's closing level... Read more

Saudi Basic Industries Corp faces heavy pressure on its profits due to cheap oil but will keep investing globally to boost capacity in key areas, its acting chief executive said on Sunday after the company reported a 39 plunge in first-quarter profit. SABIC, one of the world's largest petrochemicals groups and Saudi Arabia's biggest listed firm, said net profit sank to 3.93 billion riyals ($1.05 billion) in the three months to March 31 from 6.44 billion riyals a year earlier... Read more

Peak earnings week to follow big global selloff... Read more

For short-sellers in U.S. stocks, the agony just piles on... Read more

The world’s first trillion-dollar company? That’s exactly where analysts at FBR Capital Markets think Apple AAPL, is headed.... Read more

DoubleLine Capital’s Jeffrey Gundlach, the bond manager who has beaten 99 percent of his peers over the past five years, said the full impact of the Federal Reserve’s “extreme policies” have yet to be felt in the market.... Read more

Comcast and Time Warner Cable representatives will sit down with government officials this week amid intense scrutiny of their proposed mega-merger and its impact on consumers. The U.S. Justice Department is weighing whether to block the $45 billion deal, which has the potential to remake the cable industry... Read more

The International Monetary Fund's member nations on Saturday warned of risks to the global economy from exchange rate shifts and geopolitical tensions as they took note of "moderate" global growth and "uneven prospects."... Read more

Thousands of people marched in Berlin, Munich and other German cities on Saturday in protest against a planned free trade deal between Europe and the United States that they fear will erode food, labor and environmental standards. Opposition to the Transatlantic Trade and Investment Partnership (TTIP) is particularly high in Germany, in part due to rising anti-American sentiment linked to revelations of U.S. spying and fears of digital domination by firms like Google... Read more

European Central Bank President Mario Draghi rejected speculation that Greece may be forced to abandon the euro, reiterating that the single eurozone currency is irrevocable... Read more

Another crunch week in Greek bailout saga... Read more

Greece wants EU/IMF deal but impasse could bring referendum: deputy PM... Read more

The leaders of Germany’s economy fired back at U.S. criticism of their swelling current-account surplus, arguing it reflects the strength of their companies and the weakness of the euro rather than a lack of domestic demand... Read more

The chief executive of Volkswagen, Martin Winterkorn, has won the backing of the company's top bosses, following a clash with the chairman. The six-member executive committee of the German carmaker's supervisory board praised Mr Winterkorn's "vigour and success" and proposed extending his contract... Read more

Britain’s Conservatives plan to sell shares of bailed-out Lloyds Banking Group Plc to the public in a discounted mass privatization that recalls the selloffs of the Thatcher era in the 1980s... Read more

Britain's bank tax jump threatens to push HSBC, StanChart to new home. HSBC and Standard Chartered are looking at the viability of quitting London for a new home in Asia because a big jump in a tax on UK banks makes staying in Britain increasingly painful.... Read more

Finnish voters are going to the polls, amid hopes that a new government will pull the country out of its three-year economic slump. Prime Minister Alexander Stubb and his conservative National Coalition Party face a strong challenge from former businessman Juha Sipila and his centre-right Centre Party... Read more

Switzerland attracted the fewest companies in at least a decade last year after voters passed measures that aim to limit immigration and the country starts revising corporate tax breaks. The number of foreign firms setting up operations in Switzerland dropped 8 per cent to 274, the Conference of Cantonal Economic Directors said in a report on Thursday. The new arrivals created 780 jobs, down 21 per cent from 2013... Read more

Saudi Arabian manufacturing and chemicals giant Sabic has posted a 39% drop in net profits in the first quarter of the year compared to 2014. The fall has been put down to the decline in global oil prices. The firm, which produces chemicals, fertilisers, plastics and metals, reported a net profit of 3.93bn riyals ($1.05bn; £700m) for the three months to April... Read more

China's central bank on Sunday cut the amount of cash that banks must hold as reserves, the second industry-wide cut in two months, adding more liquidity to the world's second-biggest economy to help spur bank lending and combat slowing growth. The People's Bank of China lowered the reserve requirement ratio (RRR) for all banks by 100 basis points to 18.5 percent, effective from April 20, the central bank said in a statement on its website Read more

China's proposed infrastructure bank for Asia is intended to complement, not replace, existing lenders dominated by the US and Japan, a senior Chinese official says... Read more

Foreign automakers double down on China bets despite slowing growth... Read more

Volkswagen is exploring the possibility of developing budget sports utility vehicles and multi-purpose vehicles in China in a bid to keep up with shifts in the market, its China chief executive, Jochem Heizmann, said on Sunday... Read more

GM China Venture to Spend $16 Billion to Develop New Products... Read more

Toyota to launch two hybrid cars in China this year... Read more

Japan and the United States reported progress in top-level trade talks on Sunday that could pave the way for a broader trans-Pacific trade deal, although Tokyo cautioned that a bilateral accord was unlikely in time for a summit next week.... Read more

India’s New GDP Numbers: A Peek Under the Hood. Still confused about those sizzling new economic-growth figures coming out of India? You’re not alone.... Read more

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