Category Archives: News

Weak Northern economy set to drive shoppers south

Cross-border shopping patterns are set to switch from a south-north trend to a north-south one as the retail industry becomes the latest area to be squeezed by the contracting private sector economy in the North.

Ulster Bank’s latest Northern Ireland PMI (purchasing managers’ index), published yesterday, illustrates a tough start to 2015 for the North’s economy, with output, new orders and employment all falling.

Furthermore, the latest reduction in business activity, for January, the strongest seen since the end of 2012.

“Northern Ireland’s private sector has not had the best of starts for 2015. Local firms reported their first simultaneous decline in output, new orders and employment since May 2013.

“However, economic conditions are, perhaps, not as bad as this headline suggests, at least not for all sectors,” according to the Bank’s chief economist for Northern Ireland, Richard Ramsey, who also noted January’s welcome easing in inflation.

The services sector — the largest in the North — grew for the 19th straight month, but construction saw its first fall in output in 20 months to join retail and manufacturing as shrinking sectors.

According to Mr Ramsey, it is too early to know if the dip in construction is just a blip, but suggested the North’s retail sector is on a descending trajectory.

“Sterling is significantly stronger today than it was in the second half of 2012 and is currently at a seven-year high against the single currency.

“As a result, cross-border retail trade will be moving in the north-south direction, as opposed to south-north, which has been the dominant trade pattern for the last five or so years,” Mr Ramsey said.

Article Source: http://tinyurl.com/kbwqb42

Markets: European stocks fall on Greece fears

Irish and European stocks edged lower yesterday as Greek Prime Minister Alexis Tsipras reaffirmed his rejection of the country’s international bailout programme.

By the close in Dublin, the ISEQ Overall Index slipped 0.56pc or 31.55 points to end the trading day at 5,581.83.

The laggards on the Dublin market included Aer Lingus, which dropped 4.4pc to €2.11 amid a Bloomberg report that the Government was preparing to reject IAG’s indicative offer to buy a 25pc stake in the airline.

Its rival Ryanair, which holds a near 30pc stake in Aer Lingus, closed down 2.8pc to €9.57.

On the other side of the board, the leaders included Providence Resources, which rose 1.3pc to 78 cents after it reached agreement on commercial terms on the farm-out of its Barryroe asset.

Dalata Hotel Group fell 1.4pc to €3.

Elsewhere, a drop in banks led European stocks lower, with concern growing over the political situation in Greece.

The Stoxx Europe 600 Index fell 0.7pc at the close of trading in London after dropping as much as 1.4pc. With a 1.6pc decline, lenders contributed the most to the gauge’s retreat.

Greece’s ASE Index lost 4.8pc as National Bank of Greece and Piraeus Bank slid more than 9.8pc. Spanish and Italian stock measures fell the most in the region after the Greek gauge.

“The word to describe the situation would be fear,” said John Plassard, vice president at Mirabaud Securities in Geneva. Tsipras’s speech “raises concerns of tensions and fears for the worst for Greek banks and European banks,” he said.

Tsipras isn’t backing down from pledges that would breach conditions of the bailout aid. He vowed to increase the minimum wage, restore the income tax-free threshold and halt infrastructure privatisations. His Sunday speech also included demands for World War II reparations from Germany and the repayment of forced loans Greece made to the Nazi regime during the country’s occupation.

Article Source: http://tinyurl.com/kbwqb42

High-profile tax deal nets just five jobs

A tax-relief scheme introduced by the Government to help lure senior foreign executives to Ireland and promote employment growth created just five jobs in 2012, according to a review by the Department of Finance.

The Special Assignee Relief Programme (SARP) was introduced in the 2012 Budget, and was seen as a key piece of legislation to underpin foreign direct investment that would result in jobs creation and business expansion.

But the review, in which the Revenue Commissioners was involved, said there is a “lack of measurable evidence” that the Special Assignee Relief Programme had resulted in an increase in foreign direct investment or the roll-out of new projects in the companies involved.

In 2012, just 12 employees in 11 companies availed of the relief under SARP. That resulted in just five jobs being created and six jobs retained, according to official figures.

Preliminary statistics for 2013 showed that 31 people claimed SARP relief that year, including seven who had claimed in 2012.

“The low number of jobs created as a result of SARP indicates that the scheme has not provided any significant increase in employment,” noted the review just published by the Department.

When it was first introduced, criteria for eligibility meant that an individual assigned or contracted to work in Ireland could disregard 30pc of their income between €75,000 and an upper limit of €500,000 for income tax purposes. They also had to have been employed by the same employer abroad for at least 12 months before coming to Ireland.

In the last Budget, the SARP programme was extended to 2017. The upper threshold on income was removed, while the 12-month stipulation was cut to six.

A previous requirement that a qualifying individual must have been resident here and not elsewhere during the year for which a claim is made was also removed.

The Department of Finance also undertook a review of the Government’s Foreign Earnings Deduction (FED) incentive, designed to support efforts by multinationals and indigenous companies in expanding their businesses to countries including South Africa, Russia, China, India and Brazil.

That review said that “it cannot be definitively stated that the existence of FED has led to an increase in exports to qualifying countries”.

Article Source: http://tinyurl.com/kbwqb42

Government to raise €500m in bond auction

THE Government is planning to raise €500m at a bond auction this week.

The National Treasury Management Agency, which manages the country’s debt, said the 2.4pc, 2030 bond, will be auctioned on Thursday morning.

The move comes at a time when Ireland’s borrowing costs have plummeted.

The agency plans to raise between €12bn and €15bn in bond auctions this year.

Irish borrowing costs are expected to fall further as the European Central Bank (ECB) embarks on its massive quantitative easing programme.

Article Source: http://tinyurl.com/kbwqb42

Less is more for G20 leaders in bid to boost growth

World financial leaders are likely to agree tomorrow to cut the number of actions they will take this year to boost growth to only 5-10 priorities per country to make it easier to check if they are being done, European officials said.

The world’s 20 biggest developing and developed economies (G20) are meeting in Istanbul.

They agreed last year to launch measures to raise their collective gross domestic product growth by an additional 2 percentage points over the next five years above the level projected in 2013 and create millions of jobs.

The pledge, called the Brisbane Action Plan, entails about 1,000 commitments. Since checking the implementation of such a number of steps would be very difficult, G20 finance ministers and central bank governors will agree to narrow them down to a handful this year.

“We support the (Turkish G20) Presidency’s intention that G20 members agree on a shortlist of measures with the highest growth impact on which further monitoring would focus … taking due consideration to their individual and collective impact on global demand,” a document prepared by European Union finance ministers for the G20 meeting said.

“We believe that in February, ministers should assess possible policy gaps and confirm the priorities for the growth strategies in 2015.”

International institutions — the International Monetary Fund (IMF) and the Organisation for Economic Cooperation and Development (OECD) — will negotiate the priorities with individual countries, European G20 officials said.

“There is an agreement to narrow down the focus of the almost 1,000 commitments that have been taken, to 5-10 for each country,” one G20 official said.

G20 leaders will meet in Antalya later this year.

Article Source: http://tinyurl.com/kbwqb42