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The sale is part of INM's strategy of selling off some of its assets, as it tries to agree a deal on a €200m bond which was due for repayment in May.
INM is involved in talks with bondholders, which have a deadline of tomorrow.
In early July, INM sold its 20.8% stake in India's Jagran Prakashan newspaper for about €22m.
Goodbody analyst Gerry Hennigan commented: "Cashcade, an online gaming site, was sold to PartyGaming for an initial payment of £71.9m in cash with a further £24.0m in cash due subject to performance in 2010 and 2011. Cashcade, along with IN&M’s African Outdoor business and its 49% stake in Verivox, was one of the assets previously earmarked for disposal as the company sought to raise €100m - €150m to meet near term debt obligations.
Separately, DMGT (Daily Mail) issued its trading statement for the three months to June this morning. Predictably, conditions within the newspaper division remain ‘weak’ but there are signs both within its national and regional newspaper franchises that the rate of decline is stabilising. On the national front, sales declined 12% YoY led by a decline in advertising revenue of 15%. On the regional side, the YoY decline in sales was 27%, again led by advertising, down 33% over the same period last year.
While clearly weak and forcing DMGT to resist the trend through cost reduction, the statement added that within the national newspaper division the rate of advertising decline slowed in comparison to the previous quarter with June being the best month. On the regional side, the absolute level of advertising sales appears to have levelled off. While the comments are clearly welcome in relation to IN&M’s UK operations we would caution against reading too much into the apparent stability in the rate of advertising decline given that revenue from the UK is forecast to account for c.13% of total IN&M sales with circulation declines compounding the difficulties faced by IN&M’s UK newspapers."
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US
The Wall Street Journal reports that the US job market is doing even worse than the overall economy, prompting concern inside and outside the government that deeper-than-expected joblessness could persist once the recession ends.
Breaking from historical patterns, the unemployment rate -- currently at 9.5% -- is one to 1.5 percentage points higher than would be expected under one economic rule of thumb, says Lawrence Summers, President Barack Obama's top economic adviser. Since the recession began in December 2007, the economy has lost 6.5 million jobs, 4.7% of total employment. The unemployment rate has jumped five percentage points, while the economy has contracted by roughly 2.5%.
The Dow Jones fell 35 points or 0.39% on Wednesday.
THe S&P 500 dipped 0.1% and the Nasdaq dropped 0.5% - - its 11 straight rise. Apple rose 3.5%.
Goodbody chief economist Economist: Dermot O’Leary comments: Punchbowl remaining in place for the time being - - "Former Federal Reserve Chairman William McChesney Martin’s belief that it is the central banker’s job to take away the punchbowl before the party gets started is often used to describe the need for monetary policy to get ahead of the curve. Due to the time lag involved in monetary policy actually having an effect on the economy, if visible signs of inflation have emerged, then the central bank is already in catch-up mode.
Despite this, both Fed Chairman Bernanke, in his testimony to Congress over recent days, and the Bank of England, in the form of the minutes from its latest meeting, show little in the way of intent to remove some of the stimulus that has been enacted over the past year, despite their more upbeat tone on the state of the respective economies. In the US, “the pace of decline appears to have slowed significantly”, according to the Chairman, while in the UK, surveys suggest that “the momentum going into the second half of the year was greater than the Committee had expected in May”.
The situation in both economies is similar; aggressive action has averted a complete disaster, an inventory led growth upturn is underway (indeed, the recession may already be over) but final demand, in the form of a resumption of growth in consumer spending and business investment, is still absent to a large degree. At the same time, output gaps remain substantial at close to 5% of GDP in both economies (according to the OECD). This allows central banks to remain sanguine on the inflation risks that many are fretting about in the context of the expansion of their balance sheets recently. Taking the analogy above forward, the severe hangover from the credit crisis has to be worked off first before central bankers should start to worry about the next party."
Emerging East Asia heading for V-shaped recovery; Japan's export fall slowed to 35.7% in June
Although economic growth is continuing to slow this year, emerging East Asia has already entered the transition from recession to recovery, says the July issue of the Asia Economic Monitor (AEM), published today by the Asian Development Bank. A V-shaped recovery is forecast and growth is expected to double in 2010. Meanwhile, Japan’s trade surplus in June widened for the first time since October 2007, largely as imports declined at a faster pace. The exports fall, from a year earlier, also slowed to 35.7 percent.
The MSCI Asia Pacific Index added 0.5% Thursday. It has gained 9.2% in the past eight days
China’s Shanghai Composite Index gained 1% while South Korea’s Kospi Index added 0.2%.
The Nikkei 225 rose 0.7%.
Asia-Pacific benchmarks
The pan-European Dow Jones Stoxx 600 has risen 0.17% Thursday.
Swiss
Triggered by the swine flu scare, sales of the drug reached €659m in the first half of the year, with almost two-thirds of this coming from sales to governments and companies which are stockpiling the drug. Roche also said it expected to sell the same amount again in the second half of this year. Roche said it would be increasing ts production capacity of Tamiflu - - one of two drugs recommended by the World Health Organisation to treat the A(H1N1) virus - - to 400 million packs a year by 2010. However, Roche said its net profit fell by 29% to 4.1 billion Swiss francs due to charges related to the acquisition of Genentech. Roche's shares are up 2.3% in Zurich. Porsche Automobil Holding announced today that Chief Executive Wendelin Wiedeking is leaving the German sports-car maker with immediate effect, hours after the company's supervisory board approved his plan for a capital increase of at least €5 billion and unanimously backed talks with Qatar over a capital injection. "Wiedeking and Haerter have come to the conclusion that the further strategic development of Porsche ... is better off, if they are not on board as acting persons,"Porsche said in a statement. "The measure shall create the foundation of building an integrated car manufacturing group with Porsche SE and Volkswagen AG,"a company statement said. In 2008 Porsche sought to acquire the larger Volkswagen but the build up of debt misfired. The Porsche and Piech families, who control Porsche, have been at loggerheads for years and the VW chairman Ferdinand Piech vowed to oust the management of the sports car maker. In Dublin, the ISEQ is up 1.4%. INM is up 6.5%; CRH gained 1.4% and Elan is up 2.5%. Currencies The euro is trading at $1.4235 and at £0.8615. 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 commodities, ended last week with a weekly increase of 18.7%. The index, which hit 3,542, was still down 60% from the 9,092 level a year ago, when freight rates were soaring, dropped 1.8% on Wednesday. The Key Indicator of Global Trade - - Tudor Davies, Motley Fool UK. Crude oil for September delivery is currently trading on the New York Mercantile Exchange (Nymex) at $65.47 per barrel up 7 cents from Wednesday's close. In London, Brent for September delivery is trading on the International Commodities Exchange at $67.33. Gold is trading at $955.40 up $4.30 from Wednesday's spot price close in New York. Davy chief economist Rossa White commented: Lack of deflation in building cost despite collapse in demand - - "Deflation is prevalent across many sectors of the Irish economy. But it seems that the flexibility of the labour market in construction is not quite as evident as other parts of the private sector – when the relative collapse in demand is taken into account. The latest figures show the housebuilding cost index down only 2% from peak despite the fact that private scheme housing starts are close to zero. The housebuilding cost index released by the Department of the Environment, Heritage and Local Government in the past has typically not exceeded 65% of the cost of building a house. It relates to labour cost and materials only (and excludes overheads, interest charges, land cost and hence profit margin). That 65% rule-of-thumb from the Department may have changed somewhat given the 20% drop in final selling prices of new houses from the February 2007 high alongside an actual increase in labour and material costs since then. Demand for the final product has dried up, yet it has not fed through to providers of labour or material inputs. Note that scheme housing starts (i.e. housing starts other than one-off units or local authority building) are running at an annualised rate of just 1,500. That compares with 60,000-70,000 at the peak. Yet house building costs (labour and materials) are barely down 2% from peak (third quarter of 2008), having jumped 53% in the previous eight years. Builders' margins have obviously collapsed. So the stickiness of building cost is an extra explanatory factor as to why new house prices have fallen quite slowly over the last two-and-a-half years." Goodbody analyst Anna Lalor comments: Draft NAMA legislation expected next week - - "The Irish Times reports today that the draft legislation for NAMA is expected to be published on the Department of Finance website next week. The 200-page document is being published ahead of its passage through the legislative approval process. The Dáil (Irish parliament) is expected to come back early from its summer recess in order to do this, with sources indicating to the Irish Times that recent court activity surrounding a number of large developers is unlikely to see the Dáil recalled earlier. The draft legislation will be closely combed to get a read-through on the implications of NAMA for AIB and BOI, although it may not give enough information for the market at that stage to generate reliable hair-cut estimates for the banks concerned." Davy's Barry Dixon comments on CRH:74% increase year-to-date in federal funds obligated to US highways will have a significant impact on H2 and FY2010 spending - - "Latest ARTBA (American Road & Transportation Builders Association) data indicate that federal funds obligated for highway and bridge construction in the US are up 74% in the six months to June compared with the same period last year. Excluding the ARRA funds, core federal obligations are broadly flat on last year at $20.3bn ($20.6bn in 2008). In the six months to June, $37.5bn was obligated, implying $17.2bn of the total $26bn ARRA allocation. State and local funding has declined; anecdotal evidence suggests that this is of the order of 10%, implying a full-year decline of c.$4bn. The ARRA funds will therefore considerably more than offset the impact of slower state spending. According to ARTBA, in its latest bi-monthly report, $400m of ARRA funds has actually been paid out to contractors and this number is expected to be close to $1bn at the end of this month. It is clear that the ARRA funds are starting to flow through to on-the-ground projects and should have a positive impact on H2 spending. The impact will be even more significant in 2010. This remains one of the key positives for CRH which is the largest provider of raw materials into the US highway market."
