International
Markets: Toyota regained crown in 2012 as world's biggest carmaker
By Finfacts Team
Jan 28, 2013 - 9:57 AM

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Toyota Motor Corp. said Monday its group global vehicle sales rose 22.6% to 9.75m units in 2012, regaining the top position it relinquished in 2010 in terms of worldwide car sales by volume. The output was a record for the 75-year-old Japanese automaker and up 22.6% from a year ago.

In recent years, the company faces the challenges of the devastating March 2011 earthquake and serious quality issues.

Toyota edged General Motors Co. of the United States and Volkswagen AG of Germany in the rankings. The figure includes sales by Daihatsu Motor Co. and truck and bus maker Hino Motors Ltd.

Toyota held the global sales crown from 2008 through 2010, but dropped to third place in 2011 behind GM and Volkswagen.

GM sold 9.28m vehicles in 2012, up 2.9% from a year ago, while Volkswagen sold 9.07m vehicles, up 11.2%.

Data [pdf]

Justin Doyle, Investec Bank Ireland, said today:

  • "The US takes centre stage in the macro calendar this week with both the FOMC announcement (Wednesday) and the jobs data (Friday) due. We see little of contention with Fed policy this time as the committee migrated from Operation Twist towards enhancing QE3 last month (by buying $45bn per month of Treasury securities);
  • Hence the Fed’s open ended QE commitment, plus the funds target of 0%-0.25% will almost certainly remain unchanged. One point worth bearing in mind is that the annual rotation of the voting members on the FOMC will result in dissenting member Jeff Lacker leaving, and given the line-up of the replacements (Evans, Rosengren, Bullard and George), we are likely to get unanimity on the decision;
  • On the jobs data, recent months have seen an unusual stability in the US payroll numbers, with a relatively narrow range of +130k to +200k recorded over the past six months. Our feeling is that we will see a similar outturn to last month’s +155k, but this being January’s release, benchmark revisions could potentially alter the back run of data;
  • By contrast, Eurozone events seem relatively few in number. Final manufacturing PMIs are published on Friday, which are likely to confirm the recent ‘flash’ numbers, but which will also add some colour to the situations in Italy, Spain, Ireland and Greece. M3, a smattering of consumer and business confidence indices and Spanish Q4 GDP are all due during the week;
  • Elsewhere the official Chinese factory PMI is out first thing on Friday, together with the final estimate of the HSBC version, following a further increase in the preliminary estimate. Similarly the PMI, plus official preliminary industrial production figures, are due from Japan on Thursday."

Promissory note negotiations hit a stumbling block: Conall Mac Coille of Davy comments - - "Stock indices closed up on Friday (January 25th), with the Euro Stoxx 50 up 0.8% and the S&P500 up 0.5%. A rise in the German IFO business sentiment survey buoyed expectations for a euro area recovery in 2013. News that European banks will pay back $137bn of LTRO loans highlighted the improvement in bank funding conditions over the past 12 months. The euro rose to an 11-month high against the dollar, just short of under $1.35 at the close.

Reports over the weekend suggest that the ECB governing council has rejected initial Irish proposals to restructure promissory note payments to IBRC. In short, the promissory notes represent a €31bn central bank loan (ELA funded) set at the ECB's main refinancing rate (currently 0.75%) and with an average five- year term. So any benefit from a restructuring of the promissory notes would involve locking in the rock-bottom ECB funding costs for a longer time period.

However, it appears that the ECB governing council remains concerned that acquiring government bonds on its balance sheet for an extended period would amount to monetary financing. If so, the most advantageous option, to extend the €31bn loan to a 40-year term at the ECB's main refinancing rate, may have been ruled out. So a sharp reduction in the net present value of the €31bn, through a long-term loan at the ECB main refinancing rate, now looks less likely.

Nonetheless, Ireland could still be relieved of the €3.1bn per annum funding requirement by some shorter-term extension of ECB funding. However, in this respect, the decision by EU leaders to consider extending Ireland's bailout loans may be more fruitful, with almost €34bn of EU/IMF loans due to be repaid, and potentially deferred, by 2020.

UK national accounts data released on Friday showed that GDP fell by 0.3% in Q4 2012. With UK growth flat-lining, the coalition's fiscal consolidation strategy is now clearly under threat – not least from a downgrade of the triple-A credit rating. The IMF has called for this year's budget to reduce the pace of fiscal consolidation. Government sources now admit that capital expenditure has been cut too sharply, suggesting shovel ready construction projects may be sought. One mooted proposal is to allow UK local authorities to borrow to build up to 60,000 public sector houses. So should the pace of spending cuts be relaxed, the UK construction sector may be the first to benefit."

Economic View: Roadblocks remain on Ireland’s bank debt deal; Dermot O'Leary of Goodbody comments - - "Another twist in Ireland’s debt deal saga occurred at the weekend. Reuters reported on Saturday that the ECB had rejected Ireland’s preferred method of restructuring the promissory notes payments. Difficulties in bringing these discussions to a close were then confirmed yesterday by some ministers, with Leo Varadkar, the Transport Minister, saying that there 'are issues that need to be changed.'

Article 123 of the ECB’s Treaty appears to be the main stumbling block in the negotiations. This is the article that outlaws 'monetary financing' by the ECB. Clearly, the preferred Irish solution that involves replacing the notes with a long-term government bond which is then used as collateral at the ECB is creating a legal problem for the ECB. Effectively, this is already the arrangement that is being used to prop up IBRC but the ECB’s difficulty is allowing a long-term solution in Ireland that may set a precedent for other countries in the euro area.

While we still expect a deal to be announced before the next payment date, 31 March, there are clearly problems in agreeing a deal that does not breach the ECB Treaty. The Irish government is pushing hard and it emerged over the weekend in a report in the Irish Times that an IMF precautionary programme may be on the cards if a deal is not forthcoming. This is clearly a negotiating ploy by the government as there are already precautionary programmes available with the ESM. It remains to be seen whether this will be the correct strategy, but it is clear that the “softly, softly” approach is making little headway."

AIB Group: AIB looks to outsource EBS mortgage loan book; Eamonn Hughes of Goodbody comments -- "Press reports over the weekend (Sunday Independent) indicate that AIB is considering outsourcing the management of the EBS mortgage book. AIB acquired the €13bn mortgage book as part of its acquisition of EBS in summer 2011. There are more than 60,000 individual mortgages in the €13bn loan book and compares to a combined €41bn mortgage
portfolio across the AIB and EBS franchises.

The reports indicate that Certus, HML and Capita are potential bidders for the management of the loan book. Certus is managing the run-down of the Bank of Scotland (Ireland) loan book for Lloyds Banking Group, but the agent also has a working relationship with AIB in providing a service focused on collecting payments from mortgages in arrears.

The aim of the outsourcing exercise is to further reduce costs at the state-owned bank with a few hundred staff currently employed to manage the loan book. Our cost forecasts show retracement from a €1.7bn cost base in 2012 to just over €1.4bn in FY14. AIB indicates it has no plans to sell the loan book, but should plans change, the outsourcing suggests this loan book is a separately identified portfolio which will have third party administration in due course."

Ryanair reports strong third quarter with after-tax profits up 21%

Irish-EU Debt Talks: Ministerial spin machine swerves into ditch

Irish Economy: Investor confidence in 'dramatic' rise

Asia Markets

The MSCI Asia Pacific Index lost 0.3% Monday. Bloomberg said most Asian shares outside Japan rose after Chinese industrial profits increased for a fourth month. Japan’s Nikkei 225 Stock Average retreating after capping its longest streak of weekly gains in more than 40 years.

The Nikkei 225 fell 0.94%; China's Shanghai composite index jumped 2.41%; South Korea's Kospi dropped 0.36%; Australia's S&P/ASX 200 advanced 0.52%; in Mumbai, the Bombay Stock Exchange's Sensex 30 climbed 0.10%.

Europe Markets

In Europe, the Dow Jones Stoxx Europe 600 fell 0.11% in morning trading Monday.

In Dublin, the ISEQ  is down 0.70%.

Ryanair has slid 2.22% after publishing its quarterly results -- see above..

European Benchmarks

Irish Share Prices

Key Index Performance Statistics

Euribor Rates

AIB Daily Report

Bank of Ireland Daily Report

Currencies

The euro is trading at $1.3440 and at £0.8539.

For live currency updates, check the right-hand column of the Finfacts home page.

The US dollar fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.

Commodities

The Baltic Dry Index, a measure of shipping costs for dry commodities, hit an all-time High of 11,771 on the 21st of May, 2008. From that time it reversed and on the 5th of December, 2008 it hit a low of 663 - - close to a 1986 low.

On Thursday, July 15, 2010, the index fell for the 35th straight session, by 9 points, or 0.537%, to 1,700 points, Bloomberg report.

On Friday last week, the BDI fell 10 points  or 1.24% to 798 - -  the BDI is up 14.16% in 2013.

Crude oil for March 2013 delivery is currently trading on the Chicago York Mercantile Exchange (CME/Nymex) at $95.85 down 2 cents from Friday's close. In London, Brent for February delivery is trading on the International Commodities Exchange at $112.97. The North Sea benchmark accounts for two-thirds of the global market.

Bloomberg reports that for the first year since the futures were created, Brent crude is poised to overtake West Texas Intermediate (WTI) oil as the world’s most-traded commodity.

Daily trading in Brent jumped 14% to average 567,000 contracts in the year to November 20 compared with all of 2011, while WTI fell 17% to 575,000, according to data from the ICE Futures Europe exchange in London and New York Mercantile Exchange compiled by Bloomberg. The number of Brent futures changing hands has exceeded those for WTI every month from April through October, the longest streak since at least 1995.

Brent, produced in the North Sea, is gaining favour among traders because of its role as the benchmark for energy prices from Saudi Arabia to Russia. Prices have climbed 34% in the past two years, reflecting everything from war in Libya to the embargo on Iran. WTI, the main grade in the US, has risen 9% as the nation, which prohibits crude exports, has struggled to clear a glut at Cushing, Oklahoma, the delivery point for Nymex futures.

Gold spot price

The spot price of an oz of gold is trading in New York at $1656.80, down $2.50 from Friday's close in New York.

Gold had hit a record high of $1,921.05 a troy ounce on Sept 06, 2011.

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