A Round up of the Main Financial Stories of Interest from the Weekend Papers
Total Page:16
File Type:pdf, Size:1020Kb
A round up of the main financial stories of interest from the weekend papers. Monday, 4th January 2016 Cantor Fitzgerald Ireland Ltd (Cantor) is regulated by the Central Bank of Ireland. Cantor Fitzgerald Ireland Ltd is a member firm of the Irish Stock Exchange and the London Stock Exchange worrying. Dominance by a few big companies – or a ―narrowing‖ nd market – is a symptom of the end of a bull run, as it was in the early Saturday 02 Jan 2016 1970s (dominated by the ―Nifty Fifty‖) or the late 1990s (dominated by the dot-coms). Membership of reformed EU seen as vital to economic security David Cameron‘s claim that British membership of a reformed EU is The Independent vital to Britain‘s economic security is today backed by an overwhelming majority of economists in an annual Financial Times ISEQ among top world performers as European stocks eclipse survey. Regardless of the UK prime minister‘s renegotiation of US Britain‘s terms of EU membership, most of the more than 100 Ireland's ISEQ Index was one of the best performing in the world economists thought economic prospects following a Brexit would be last year, outstripping major indices including the UK's FTSE 100 hit if voters decided to leave. Economic arguments are central to and Germany's DAX. The ISEQ ended 2015 up 30pc on the same both the ―in‖ and ―out‖ camps as they prepare for a referendum on period last year. This compares with the German Dax, which was up whether the UK should leave the EU. It could be held as early as 9.56pc; France's CAC 40, up 8.53pc; the S&P 500, which fell June. The survey results show decisive support from economists for 0.73pc; and Japan's Nikkei, which gained 9.07pc. London's FTSE Britain to remain in the EU; of those surveyed, none thought a vote 100 lost 4.93pc over the year. Meager gains may be good enough to leave would enhance Britain‘s economic growth this year, with 67 in 2015, with the Standard & Poor's 500 Index concluding the year thinking the outlook would deteriorate. down almost 1pc for its first annual decline since 2011. The Stoxx 600 surged 16pc from January through March - the best quarterly Greece warns creditors on ‘unreasonable demands’ over return since 2009 - as the European Central Bank flooded the pensions financial system with cash by purchasing bonds. The index then Greek Prime Minister Alexis Tsipras has said his government ―will spent most of the first six months sitting on gains of 15pc or more. not succumb to unreasonable demands‖ as it prepares to send the country‘s creditors proposals on crucial reforms to the pension In brief: Greeks remain wary over banking system this week. ―The creditors have to know that we are going to As Greek Prime Minister Alexis Tsipras, inset, braces for another respect the agreement,‖ Mr Tsipras said in an interview with Real round of tough negotiations with creditors, savers are still reluctant News newspaper on Sunday, referring to reforms demanded in to bet their money that this year's talks will be less perilous for their exchange for Greece‘s €86bn bailout agreement last year. country's place in the Eurozone than 2015. New data from Greece's However, he pledged that Greece ―won‘t succumb to unreasonable central bank shows that deposit outflows continued in November for and unfair demands‖ for more pension cuts. a second consecutive month, even as the nation's lenders plugged their capital shortfalls, and strict capital controls put in place last China manufacturing shrinks for fifth month summer capped withdrawals and money transfers abroad. Deposits China‘s economy started the year with more bad news as official held by households and businesses in Greek banks fell close to a data showed that the manufacturing sector shrank for a fifth straight 12-year low of €120.9bn in November, bringing total losses to a month in December. That will increase pressure on the government record of more than €43bn, or 26.4pc of total savings, in the last 12 to stimulate growth in the world‘s second-biggest economy, which months. Savers' distrust may derail the government's goal of lifting has been slowing as it struggles with overcapacity and a heavy debt capital controls by the end of June. Reluctance to return deposits burden after years of breakneck expansion, as well as weak global back to banks hinders the ability of lenders to provide credit to the demand for its factories‘ products. Global investors are watching economy, as the government struggles to lead Greece out of China‘s economy closely after a year in which commodity prices recession this year. slumped because of lower Chinese demand and fears of a hard landing hung over markets in emerging and developed nations. The official manufacturing purchasing managers‘ index for December came in at 49.7, according to figures released on Friday — slightly rd above November‘s performance but broadly in line with economists‘ Sunday 03 Jan 2016 expectations. A reading below 50 implies a contraction, while a reading above 50 suggests growth. Weekend Financial Times Debt management agency speeds Ireland’s recovery When Ireland‘s debt management office was trying to engineer the John Authers - Equities: And then there were nine country‘s return to the capital markets in 2012, a few years after the Had it not been for a small group of nifty companies, 2015 would Irish financial collapse, it was in for a shock. During the 1990s and have entered the history books as a terrible year for the US stock early 2000s, Ireland‘s credit rating climbed to AAA on the back of its market. As it was, stocks were almost exactly flat, as were bonds Celtic Tiger economy; sovereign debt shrank to a fraction of and cash, meaning that US bonds and equities had their second- economic output. Investors loved Irish government debt, ranking it worst collective 12 months since 1995 — outstripped only by the on a par with that of Germany. By 2012, however, Ireland was deep disaster year of 2008. Yet there were some very high numbers for a into a three-year, €67bn bail-out after its banks collapsed when a group of four companies that have come to be known as the property-price bubble burst in 2008. The collapse saw its credit ―Fangs‖ — Facebook, Amazon, Netflix and Google — and for a rating sink below investment-grade, and its sovereign debt yield slightly wider group that added Microsoft, Salesforce, eBay, soared. ―Normally, our guys would have been meeting blue-chip, Starbucks and Priceline to create the ―Nifty Nine‖. Both groups triple-A buying investors, and suddenly they were being told, ‗Sorry, gained more than 60 per cent for the year. Away from the guys, you‘re down the hall with the junk bond buyers and the excitement generated by these hot companies, things were dire. emerging markets teams‘,‖ Mr O‘Kelly says. ―We had never met The S&P 500 equal-weighted index, where each of the 500 those types of investors before, and it was quite an unnerving companies receives 0.2 per cent of the index, was down, and experience for our guys.‖ ―The investor base has changed underperformed the S&P weighted by market capitalisation. That is substantially again because we recovered faster than anybody expected, and [rating agencies] started to upgrade us. So Ireland is DUBLIN: 75 St. Stephen‘s Green, Dublin 2, Ireland. Tel : +353 1 6333 633. Fax : +353 1 633 3856 Page 2 moving back up the corridor again,‖ Mr O‘Kelly says. A key reason Ryanair set to continue passenger growth trend for that, he says, is the weak euro, from which Ireland benefits more The airline carried 900,000 more passengers this Christmas. This than its eurozone peers because of the nature of its economy. The newspaper reported at the end of November that Ryanair was NTMA today is a different institution to what its founders envisaged. ―tantalisingly close‖ to rolling annual traffic of 100 million It has more responsibilities, for a start. It is the parent (although passengers. On December 3, it announced rolling annual traffic of largely in the technical sense) of Nama, the ―bad bank‖ set up to 99.9 million customers for the year to the end of November, a 17 clear the wreckage of the banking collapse. It also runs the Ireland per cent increase. This Thursday, January 7, will bring another Strategic Investment Fund, a fledgling sovereign wealth fund with traffic update from the airline, and will likely see it burst through the assets of about €8bn (excluding stakes in Irish banks). Still, its core 100 million passenger barrier for the first time. ―Ryanair will carry activity is managing the debt. Mr O‘Kelly says Ireland has gained over five million customers across Europe during the Christmas ―semi core‖ status in the eurozone debt market, more on a par with period – an increase of over 900,000 seats on 2014.‖ Ryanair‘s France than with Germany. ―We have been fundamentally re-rated Robin Kiely, speaking in December [since the end of the bail-out], and policymakers can take credit for that achievement,‖ he says. Facebook to launch business version of its platform in 2016 "A more connected workplace is a more productive workplace.‖ Social network giant Facebook is set to start a new chapter in 2016, with the launch of the business version of its service. ―The fundamental idea behind Facebook at Work is that a more connected workplace is a more productive workplace.‖ Julien Codorniou, director of global platform partnerships for Facebook at Sunday Business Post Work, speaking to The Wall Street Journal in December Under Armour brand nipping at heels of Nike M&A deals explode in last quarter of 2015 Sportswear Company Under Armour will celebrate its 20th birthday A deal making surge in the final quarter of 2015 saw volumes and in 2016, and looks set to challenge rivals Nike.