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A round up of the main financial stories of interest from the weekend papers. 15th June 2020

Pages 2 - 5: Press Summary Page 6: Links to Our research publications and market insights https://cantorfitzgerald.ie/

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Weekend Press Summary

Saturday 13th June 2020 Sunday 14th June 2020

The Saturday Irish Times Sunday Business Post

This week in his Market Beat column, Joe Brennan reviews Climate watchdog to be given legal powers in bid to win Irish Continental Group, who last week announced that they Greens’ support for coalition. Some of the proposals on the table pulled out of a deal with German ship builder FSG to build a 1,800 are: tax cuts off the table for lifetime of new government; an passenger vessel for €165.2 million. This vessel was due for acceleration of the rollout of the national broadband plan and the delivery in late 2020. The company recouped its 20 percent deposit. phasing out of the direct provision system

Swiss activist investor Veraison Capital who leads a group of Ian Guider: Hard choices are inevitable as Central Bank homes dissident shareholders in Irish as Swiss listed have asked in on loan losses. Heavily exposed to mortgages and loans to the company to hold an EGM at which they are proposing to unseat hard-hit SMEs, Irish banks are under pressure from both regulators chairman Gary McGann and other board members. The company and investors to clear arrears as quickly as possible. Last Monday, has, however, indicated that an EGM would be held in August. the chief executives of the country’s banks found a letter from the Central Bank in their email inboxes. Signed by Ed Sibley, the deputy The current UK quarantine rules are to be challenged by governor, and Derville Rowland, the director general for financial , BA and EasyJet. The companies have asked for a conduct, it asked the banks to come up with detailed plans over the judicial review to be heard as soon as possible. next four weeks regarding how they will treat customers whose financial situation does not improve when the payment break period Consumer lending dropped to a new low in April. The 17year ends in September. low of €64 million was a drop from €183 million in March. Leinster at a loss as it lives off hope and cash reserves. The UK economy saw output fall by 20.4 percent in April. This is The last season still hasn’t finished, no one knows what the coming the largest fall since records began in 1997 and follows a 5.8 season will look like, and Mick Dawson (CEO) is staring down the percent contraction in March. barrel of an €8 million hole in his balance sheet. He’s not alone. Willie Ruane, Ian Flanagan, and Jonny Petrie, his counterparts in Connacht, Munster and Ulster respectively, have a similar problem. Overall, the club’s total annual income is around €18 The Saturday Independent million, made up of sponsorship revenue, merchandise sales, IRFU grants, and tickets. The largest part of that is from ticket sales. By its own figures, Leinster sells close to 13,000 season tickets which Aryzta shareholder group angry at board's EGM 'delaying tend to range in price from around €100 to €750. Presuming an tactics'. A group of Aryzta shareholders led by Veraison Capital say average price of around €400, those tickets bring in around €4 they regret "the delaying tactics of the board of directors" in relation million to the Extraordinary General Meeting (EGM), which they requested be held last month. Shops open but many will be simply trying to survive. The country’s main shopping streets have people in them again, US drug firm must wait for €1.64bn tax decision. A High Court though Debenhams, Mothercare and others have succumbed to the judge will give judgment on a later date on an action by drug Covid-19 downturn. company Perrigo against the Revenue Commissioners and the State aimed at overturning a €1.64bn tax assessment. Desmond stumps up $50 million for diamond firm. Mountain Province, the businessman’s struggling diamond mine Stobart Air to cut jobs in Dublin and Cork. Dublin-based Stobart company, is in ‘serious financial difficulty’, directors confirm, due to Air, which operates the Aer Lingus Regional service, is to axe more Covid-19-related market closure. than 100 jobs, the Irish Independent understands - despite saying earlier this week that it intends to relaunch almost all its flight Local unease as looks to build apartments on schedule by August. creche space. Cairn Homes is building Marianella, a scheme of 308 houses and apartments, on the site of a former Redemptorist Apartment planning approvals 'outstrip demand'. monastery in Rathgar in Dublin 6. Prices for the remaining units Planners granted permissions to build nearly twice as many start at €795,000. The development has its own cinema screen as apartments as houses in the first three months of the year - but well as a gym with a steam room and sauna. There is also an empty experts say many are unlikely ever to be built. crèche designed to accommodate 73 children. Cairn has angered current residents by applying to turn the crèche space into seven apartments and build a smaller crèche elsewhere on the site for 28 children.

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Weekend Press Summary

The Sunday Interview: Barry Downes, CEO of Affidea Ireland. Ireland’s Covid-19 death rate higher than many other European Barry Downes began his career as a mechanical engineer working countries. Ireland’s death rate during the Covid-19 pandemic was with CRH Roadstone. After years in Canada with Brookfield Asset considerably higher than other European countries, an analysis by Management, his executive skills saw him headhunted back home the Business Post has found. A detailed data assessment of where he was made chief executive of Affidea Ireland, which runs excess deaths in 18 countries shows that Ireland’s rate per million MRI clinics and primary healthcare centres across Ireland. of population was nine times that of Norway, four times that of Denmark and three times that of Germany during the almost three- Brexit risks must sharpen focus on government formation. month peak of the pandemic. Despite a lack of resolution on many issues, Britain has formally rejected an extension of the transition period Seaspray targets €1bn in assets over five years. Seaspray Private, the new wealth management firm launched last Vincent Boland: Live by the stock market, die by the stock week by former stockbrokers and bankers, is targeting €1 billion of market. Donald Trump is gambling his re-election campaign on the assets under management in the next five years. Danny O’Leary, a Nasdaq, but Thursday’s big sell-off was a strong sign of no former senior executive at Bank of Ireland’s private banking arm, is confidence in Trump from the US stock market heading Seaspray’s push into wealth management. He said the company was seeking to manage the finances of charities, credit Surge in demand for Tesla electric cars. unions and SMEs as well as high net worth individuals and Sales of Tesla’s electric cars surged in Ireland last year, as the professionals. company recorded more than €15 million in turnover. Tesla Motors, led by controversial chief executive Elon Musk, first moved into the Science applied to reopening of Hodson Bay hotels. Irish market in 2017, selling its Model X and Model S cars. During A former microbiologist is using his scientific knowledge to help the its first year of business, the Irish showroom recorded sales of €2.3 Hodson Bay Hotel Group as it prepares to reopen following the million. Newly filed accounts show sales have surged at its Irish Covid-19 lockdown. Garry Walsh, the group‘s commercial director, operation in recent years. Last year, turnover at its Sandyford-based is a food science and microbiology graduate who spent his early showroom was up to €15.7 million, compared to €11.7 million in career managing high-risk food manufacturing for companies such 2018. as Princes and Green Isle Foods. In the bedrooms, a cleaning and hygiene system has been mapped out with Diversey, a hygiene Donohoe rules out indemnity for businesses on virus claims. technology company, and the managers of each hotel. The government has ruled out providing an indemnity to businesses against potential Covid-19 claims, with Minister for Finance Paschal Data centres use same amount of water as large towns. Donohoe describing the proposal as “financially Data centres owned by large multinationals, including Facebook unsustainable”. Some businesses have found themselves in a and Amazon, are using the same amount of water as some of difficult financial position as a result of insurers refusing to pay out Ireland’s largest towns at a time of reduced supply. An analysis of on what the firms consider to be legitimate business interruption planning documents by the Business Post has found that the claims arising from the pandemic and associated public health facilities require tens of millions of litres of water every day to cool measures. down their servers during the warmer summer months. According to details provided by Facebook, its Irish data centre used 395 Picking up from the pandemic. million litres of water in 2019 – roughly the same amount used by TWM has managed to get a number of property deals over the line Kildare town‘s 8,600 inhabitants in any given year. in spite of the lockdown. Despite the restrictions resulting from the Covid-19 lockdown, a number of property deals have got over the PRS Schemes - The best of both worlds? line or been substantially progressed by the estate agents at TWM. Building apartment complexes which include gyms, cinemas, This activity is evidence that investors are not alone shopping communal office space, meeting rooms and breakaway social around but also tying deals down, and it should underpin some spaces allows tenants to have the security of their daily work-life optimism for commercial property and particularly office and retail routine, morning workout and social life balance all within the safety investments. of their own building. Granted, developers didn’t predict such a pandemic, but perhaps this timing is a positive coincidence? Risky business: how prepared are we to open up Ireland again? We weren’t ready for Covid-19, despite the government’s own annual risk assessment clearly stating that ‘advance planning and preparedness are critical’ to mitigate the impact of a pandemic. So what does this say about our preparedness for the many other risks highlighted in the annual assessment?

How real is the risk of a second wave of Covid-19? Scientists have set out three possible scenarios for how the next phase of Covid-19 will evolve, but none of them predict the disappearance of the virus.

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Weekend Press Summary

Over 4,000 firms claw back insurance rebate after forced The Sunday Times lockdown closure. Just over 4,000 businesses have been handed insurance rebates after they were forced to close during the Custom House Capital chief poised for extradition to Ireland. coronavirus lockdown. The rebates were part of a package of The former managing director of Custom House Capital is being forbearance measures agreed by the insurance industry following a held in Germany pending his extradition to Ireland to stand trial for meeting with the finance minister Paschal Donohoe on April 10. The conspiracy to defraud clients of millions. Harry Cassidy was arrested measures included premium rebates for employers’ and public by the German authorities three weeks ago on foot of a European liability cover and for commercial vehicle insurance, to reflect a arrest warrant issued by Ireland. If his extradition proceeds, the sharp drop in claims while the economy was shut down. executive will be flown to Dublin to stand trial for offences related to the collapse of Custom House Capital, which suffered millions in ‘Overload of risk’ on defined benefits for retired workers, losses. claims Pensions Authority Companies behind Ireland’s dwindling band of defined benefit pension schemes are loading too much McConn parks his Maltese motor insurer Platinum Platinum investment risk on their existing employees to help pay for the Insurance, a Maltese insurance company controlled by Irish car generous pensions of workers who have already retired, financial rental entrepreneur Raymond McConn, has surrendered its watchdogs have warned. The imbalance is worsening, according to authorisation to write business from the Mediterranean island. The the Pensions Authority, as companies shut their pension schemes surrender of the licence to the Malta Financial Services Authority to new members in an effort to control the spiralling cost of was entirely voluntary, and was due to a strategic decision of the promising guaranteed pensions for life. company, the regulator said. Big four accountants still get most of the PIE. Central Bank ‘gave nudge’ to AIB on trackers AIB faced The grip of the so-called big four accounting firms slipped last year, regulatory scrutiny when it agreed to extend an ombudsman’s when they audited 79% of large companies, compared with 84% in award in favour of one tracker mortgage customer to all 5,900 2018, according to new data from the industry regulator. The quartet borrowers with similar loans, the Central Bank of Ireland has retain their dominance of the most lucrative mandates, however, confirmed. The state-controlled lender has insisted, however, that it collecting 94% of audit fees paid by large companies. The was not forced into the decision, which will cost it an estimated concentration of the market in the hands of just four firms, when €300m in mortgage writedowns and interest refunds. Ireland has more than 4,300 registered auditors, has raised concerns about a lack of competition. Hyundai Ireland boss seeks to put south Dublin development in fast lane as investment vehicle connected to the boss of Hyundai Mowlam Healthcare nurses development of new care home in Ireland has applied for planning approval to build a strategic Ballyogan Mowlam Healthcare, the country’s largest care home housing development in south Dublin. Ditton Investments, which is group, is looking to expand its operations further with the owned by Hyundai chairman Eugene O’Reilly and lists the car development of a 150-bed care home in south Dublin. The group company’s chief executive Stephen Gleeson as a director, has has applied for planning permission to develop a new nursing home applied for fast-track permission from An Bord Pleanala. The on a site of just more than two acres, close to Leopardstown submitted proposal is for 151 apartments at a site near Mooney’s Shopping Centre at Ballyogan. It acquired the site from Park Hyundai dealership on Deansgrange Road. Developments.

Arena Events boss: ‘It’s been a battle but the ball is still in our Bank of England readies £150bn rescue for economy. court.’ It is not the type of business Greg Lawless or Arena Events The Bank of England is expected to unleash a further £150bn of Group particularly wanted. Arena is a supplier of temporary seats stimulus in its latest attempt to cushion the economic damage from and hospitality structures to some of the world’s most prestigious Covid-19 — as fresh evidence emerges of the rise in unemployment sporting events. This year, it was set to supply stadium-style seating caused by the lockdown. After an unprecedented 20.4% contraction with a capacity for 30,000 spectators for four venues at the Tokyo in GDP in April, economists expect the Bank to add more firepower Olympics. The contract was on top of its usual list of marquee to its quantitative easing (QE) programme. tournaments: the US PGA, US Open and the Open in golf; the Wimbledon tennis tournament; and numerous Formula One grand HSBC boss urges blue-chips to defend China A pro-China prix. group is asking FTSE 100 companies to lobby ministers about the risks of Britain’s deteriorating relationship with Beijing. The China- Quiz shops for rent reviews to make fashion comeback at Britain Business Council (CBBC), whose members include HSBC, Dublin stores: Quiz is hoping to renegotiate rents on stores at BP, Standard Chartered and Glaxo Smith Kline, has approached Tallaght, Blanchardstown, Liffey Valley and the Ilac Centre after several blue-chip companies with Chinese exposure about support placing its stores subsidiary into administration in the UK. The fast- for the lobbying campaign. The charm offensive is led by Sir fashion retailer will not be reopening its Cork outlet. Two Northern Sherard Cowper-Coles, the CBBC’s chairman and head of public Ireland stores, in Ballymena and Antrim, will also close. affairs at HSBC, Europe’s biggest bank.

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Weekend Press Summary

Boohoo faces City tantrum over £1m payout to John Lyttle Business entertainment 'requires tax-free boost'. Fast-fashion powerhouse Boohoo is set for a showdown with A tax incentive for expenditure on business entertainment to help shareholders this week over a £1m payout to chief executive John stimulate the economy is among the recommendations from tax Lyttle. Influential advisory group ISS has recommended that advisers to the parties in Government formation talks. Boohoo’s shareholders vote against its pay policy, citing a lack of explanation either for Lyttle’s payout or for salary increases handed Bord Bia consumer study aims to help industry combat to the other senior executives, which ranged from 18% to 30%. recession. Bord Bia, the state agency for supporting and promoting Boohoo’s market value has soared to £4.6bn, making it by far the Irish food at home and abroad, is planning to develop a consumer biggest company on the more lightly regulated AIM market. study that can help food brands formulate a strategy for recessionary periods. Virgin Atlantic investors brace for crash landing over loans Investors that lent Virgin Atlantic £220m based on its Heathrow landing slots are in talks amid fears that their money could be wiped out. The long-haul airline, which is pleading with the government for The Weekend FT a bailout, raised the cash in 2015 from giants including Pension Insurance Corporation, Hastings Funds Management, Standard Life Retail exuberance does not explain the rally in stocks. Investments and Edmond de Rothschild Asset Management — Institutions have been on both sides of recent trades: short covering firms that typically invest in safe assets with steady returns. followed by a ‘dash for trash’.

Cineworld pulls out of blockbuster Canadian deal Cineworld’s Investors enjoy equity-like returns from a roaring bond market. plans to become the biggest chain in America have ended in Debt issued by a string of blue-chip companies is trading up to 40 acrimony after the London-listed business abandoned its £1.6bn per cent higher. pursuit of Canadian rival Cineplex. A legal battle could follow, after Cineplex said there was no legal basis to terminate the deal, US foundations issue first social bonds to fund $1.7bn announced in December, to combine its 165 venues with coronavirus fightback. Underwriters report ‘insatiable appetite’ for Cineworld’s 787. debt backed by donor organisations.

Lloyds banks on less office space. Majority of ESG funds outperform wider market over 10 years. Lloyds Bank has signalled it could shrink its property footprint after Study of sustainable funds counters claims that ESG investment the lockdown. Matt Sinnott, people and property director at Lloyds, comes at the expense of performance. said in a memo that it was likely the bank would “need fewer buildings and different types of spaces” after the crisis because of The Long View. Investors reset for Fed’s single-minded pursuit of “changes to the way we work”. His comments are the latest policy goals. US central bank’s priority is to absorb shocks, even if it indication that commercial landlords could suffer in a world of more means inflating asset prices. remote working and video calls. Airbus warns jobs in UK more at risk than France or Germany. Chief calls for British support measures & Warning over Brexit isolation. The Sunday Independent Cevian makes a wager on Pearson learning its lesson. Europe’s biggest activist investor has built a significant stake in Buymie raises additional €5.8m in funding. Pearson, betting on the potential for new management to turn round Irish same-day grocery delivery company Buymie has completed a the struggling education group. €5.8m fundraising taking the capital it has raised this year to over €8m. Hertz seeks to tap speculators’ fervour with $1bn stock offering FX Buckley adds upmarket city grocer to restaurant chain. in bankruptcy. Hertz, the car rental group facing bankruptcy, is The FX Buckley restaurant group has opened a new shop in Dublin looking to sell up to $1bn in stock to take advantage of frenzied city centre serving up premium meat and gourmet groceries. trading in its shares, in an unprecedented move for a company whose solvency is in doubt. Mercury seeks talks on €100m power scheme. Mercury Renewables, a renewable energy developer based in It seems rash to bet that the worst is over for US oil stocks. Mayo, has gone to An Bord Pleanála regarding a pre-application Energy shares may be beaten down, but they are still far from consultation for a wind farm which could represent an investment of cheap. €100m.

Mayo-based CMS Distribution targets London Stock Exchange IPO for 2022. CMS Distribution, the Mayo-based specialist distributor which supplies business and consumer technologies to customers, is planning an Initial Public Offering (IPO), as early as 2022.

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Weekend Press Summary

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