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Friday Newspaper Review - Irish Business News and International Stories - - October 24, 2014
By Finfacts Team
Oct 24, 2014 - 11:33 AM

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Irish Independent

Tesco has been plunged deeper into crisis mode after its profits slumped, its chairman said he will quit, and an expanding accounting blackhole sent shares in the retailer tumbling.

The extent of Tesco's problems are evident not only in the accounting earthquake that rocked it last month, but in a brutal performance in its international markets, especially in Ireland.

Figures from the group show that its like-for-like sales here, including VAT but excluding petrol, sank 6.4pc in the first half of the group's financial year. That included a 5.5pc fall in the first quarter and a 7.3pc slump in the second quarter.

Last year, Tesco's sales here fell 5.5pc, having declined 3.7pc in the first half of that financial year and 7.2pc in the second half.

For many of us it’s a name synonymous with mobile phones, but Microsoft is now officially axing the Nokia brand in favour of its own Lumia range of Windows smartphones.

The tech giant bought Nokia’s mobile division back in April for $7.2bn along with a 10-year deal to use the Finnish company’s name on smartphones.

Now, however, it seems Microsoft wishes to push its own Lumia brand, the most successful iteration of the company’s Windows Phone OS – rival to Google’s Android and Apple’s iOS systems.

Microsoft confirmed to tech site The Verge that the phasing out of the Nokia brand would begin in France before spreading to other companies.

THERE has been a mixed reaction to plans to introduce a scheme to get new buyers on the property ladder.

Taoiseach Enda Kenny's plan would guarantee a portion of a new mortgage for first-time buyers. This would allow buyers to go back to a 10pc deposit.

The mortgage market has been thrown into confusion by proposals from the Central Bank to require most borrowers to have 20pc deposits, and to limit the amount of income that can be used to calculate how much can be borrowed.

A banking analyst with Goodbody Stockbrokers said the Government plan may smooth the path to higher deposits being introduced eventually. Eamonn Hughes said the scheme "may allow for a more gentle glide path to the Central Bank's blunt approach on new lending restrictions".

Irish Times

European leaders granted a key concession to Ireland as they reached a new long-term deal on climate change early this morning.

Although the leaders stopped well short of setting specific national targets to reduce greenhouse gas emissions between 2020 and 2030, they settled on an overall target to reduce emissions by 40 per cent compared with 1990 levels.

The agreement essentially recognises Ireland’s heavy reliance on agriculture so the future build-up of the dairy sector can proceed without running the risk of EU fines for increasing emissions of methane gas.

For investors, the European Central Bank’s yearlong evaluation of the region’s banks isn’t just about who passes and who fails. The bigger question will be how much the ECB marks down lenders’ capital during its balance sheet inspection known as the asset quality review. The central bank and national regulators will publish their findings on October 26th.

“The focus will be on how the asset quality review influences the development of capital ratios and non-performing loans,” said Michael Huenseler, who helps manage about €13 billion, including European banking shares and bonds, at Assenagon Asset Management SA in Munich.

Permanent TSB’s capital shortfall arising from European Central Bank stress tests will be between €800 million and €1 billion, The Irish Times has learned.

PTSB, which is 99.2 per cent owned by the State, will fail the adverse scenario case of the stress test when the results are published on Sunday.

PTSB will have two weeks to submit a plan to the new Single Supervisory Mechanism, which assumes regulatory oversight for the euro zone on November 4th, outlining how it intends to plug the hole in its capital buffer. It will have until the end of July next year to put the funding in place.

Irish Examiner

Operating profits at the former Quinn manufacturing group last year declined by 57% to €18.6m.

The group, now known as the Aventas Manufacturing Group Holdco Ltd, is made up of four core businesses —container glass, construction industry supplies, plastics & packaging and radiators.

Aventas is 75% owned by its former creditors, mainly banks and hedge funds, with the remainder held by its principal former lender, the Irish Bank Resolution Corporation in liquidation.

Europe

Euro Topics: After the attack in Ottawa on Wednesday in which one person and the gunman were killed, investigators are trying to establish the motive. According to media reports, the attacker was known to the authorities and may have had Islamistic reasons for his actions. Religious converts must be watched more closely, some commentators write. Others doubt that constitutional states can effectively thwart individual perpetrators.

Keep an eye on converts: The attacks in Canada should come as a wake up call for the West's security services to heighten their surveillance of religious converts in the social media, the conservative UK daily The Times warns: "The two incidents do, however, make plain that western counter-terrorist specialists should not concentrate exclusively on the threat posed by trained jihadists returning to their native countries primed to kill. Those who stay at home, radicalised by militant preachers and above all by the buzz of like-minded people on social media, are of equal menace. The security services have monitored such Muslim converts as best they can. As long as they are not part of a criminal conspiracy, however, it is difficult to control their movements or gauge their intentions."

High time for Europe to stand by Ukraine, George Soros demands: Europe must finally take a more resolute stance in the Ukraine conflict, urges US investor George Soros in a commentary piece in the conservative daily Frankfurter Allgemeine Zeitung, shortly before Ukraine's parliamentary elections take place: "The new Ukraine has the political will both to defend Europe against Russian aggression and to engage in radical structural reforms. To preserve and reinforce that will, Ukraine needs to receive adequate assistance from its supporters. ... It is high time for the members of the European Union to wake up and behave as countries indirectly at war. ... It is also high time for the European Union to take a critical look at itself. There must be something wrong with the EU if Putin's Russia can be so successful even in the short term. ... And Europeans themselves need to take a close look at the new Ukraine. That could help them recapture the original spirit that led to the creation of the European Union. The European Union would save itself by saving Ukraine."

Renzi takes sweet revenge on Barroso: In the row with the European Commission over the Italian budget Italian Prime Minister Matteo Renzi threatened on Thursday to make the costs of the EU institutions public. Prior to Renzi's threat outgoing EU Commission president José Manuel Barroso had expressed his annoyance that Rome published a strictly confidential warning letter from the Commission on Italy's draft budget. Revenge is sweet, the Huffington Post Italia comments with amusement: "Renzi is retaliating and enjoying it. ... Because he is convinced that the European bureaucrats still haven't understood that they must embark on a pro-growth course, not a pro-austerity one. ... The end of an era, in other words. With a leak as an epilogue overshadowing the Barroso commission's last days in office. Certainly nothing compared to the storm Julian Assange unleashed with his revelations. But the little Renzi leak won't leave Brussels unscathed."


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