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President Barack Obama makes remarks about economic development at Lehigh Carbon Community College in Allentown, Pennsylvania., Dec. 4, 2009.
Aer Lingus
Aer Lingus’ total passenger numbers in November 2009 were 776,000 an increase of 4.7% compared to November 2008. Short haul passengers were 704,000, a 9.1% increase on November 2008 and long haul passengers were 72,000, a 25.0% decrease on November 2008.
Aer Lingus’ overall load factor in the month was 71.0%, a decrease of 1.3 points compared to November 2008, with capacity decreasing by 4.7%. Short haul load factor was 71.0%, a decrease of 0.8 points on 2008, with capacity increasing by 12.3%. Long haul load factor was 71.1%, a decrease of 1.8 points on 2008, with capacity decreasing by 25.7%.
Anglo Irish Bank
Anglo Irish Bank is reported to have inadvertently released information regarding 500 UK business customers.
The bank's Belfast office emailed a North of Ireland client a spreadsheet containing details of customers and transactions worth €12.5 billion.
Most of the clients are British-based property development companies.
Irish Stock Exchange admits Conroy Diamonds and Gold plc and Karelian Diamond Resources plc to trade on small companies market: IEX
The Irish exploration companies, Conroy Diamonds and Gold plc and Karelian Diamond Resources plc commenced trading today on IEX, the Irish Stock Exchange’s specialist market for smaller growth companies.
The admission of Conroy and Karelian to IEX increases the number of companies trading on the IEX market to 27.
Deirdre Somers, Chief Executive of the Irish Stock Exchange, said: “We are delighted to welcome Conroy Diamonds and Gold plc and Karelian Diamond Resources plc to IEX. It is encouraging to see Irish companies seeking opportunities to grow their businesses in these challenging economic times. The euro trading facility available from the Irish Stock Exchange will provide an opportunity for these companies to attract more euro based investors.”
Professor Richard Conroy, Chairman of both companies, said: “Admission to IEX is a positive step for Conroy Diamonds and Gold plc and Karelian Diamond Resources plc. The addition of a euro quotation on IEX will facilitate trading in the shares from both Irish and international investors who choose to trade in euro. We expect to expand our investor base as a result of this move to IEX.”
Exchange member firm, Goodbody Stockbrokers, will ensure ongoing pricing in the shares of Conroy and Karelian, by acting as market makers and quoting bid and offer prices on ISE Xetra, the Exchange’s electronic order book, during the trading day.
Gerry Kinahan, President of the Independent Mortgage Advisors Federation, said the drop in mortgage market activity has continued but there was evidence that the scale of decline had lessened of late."The Autumn/Winter Sentiment Survey confirms that the Irish mortgage market remains under pressure but there are also signs that a bottoming out process may have begun. This process could continue for some time and no dramatic upturn is envisaged. However, some brokers are reporting that certain areas and market segments may be closer to a turn than others as local demand and supply conditions and the degree of price drop already seen become more influential."
Austin Hughes, chief economist at KBC Bank Ireland, who carried out the survey noted that there continue to be significant variations in the scale of decline in house prices from peak values but the broad picture emerging was one in which house prices had fallen by a little more than a third. "The dominant influence on Irish house prices has been the intensity of the downturn in the property market and in the broader economy but other factors were also playing some role. Signs of slightly stronger conditions, for example in the first time buyers market or in Dublin suggest that some parts of the market may have begun to bottom out even if no marked improvement is envisaged in early 2010."
Dubai
Bloomberg reports that Nakheel PJSC creditors may win the right to seize a strip of barren waterfront land the size of Manhattan if the company defaults on the $3.5 billion bond backing the development.
Investors will be able to seek foreclosure on the property’s mortgages should the Dubai World unit fail to repay the loan, according to the bond’s prospectus. The debt is due on Dec. 14, after which Nakheel has two weeks to remedy a default. The property forms part of the Dubai Waterfront project, where Nakheel plans to build a city twice the size of Hong Kong.
President Barack Obama takes questions about the jobs numbers and what his administration is doing to help businesses create new employment:
Significant improvement in US labour market
Rossa White, Davy chief economist, comments: "The recovery in the US is economy is now fully impacting on the labour market. The economy reached a floor in the late summer and by next month net job growth is a possibility – a lag of less than six months. In November, non-farm payrolls slipped only 11,000. That was the best monthly comparison since December 2007. In addition, the improvement was backed up by the separate household survey where the employment change was the most favourable in over 18 months.
In the down-cycle that has just ended, US employment was shed at an unprecedented pace. It eclipsed the sharp drops of 1982 or early 1991. During the six months from November 2008 onwards, payrolls dropped at an average monthly rate of almost 650,000, or 0.5%. The improvement in jobless claims in November has led to a step-change in the monthly pace of decline. In August-October, payrolls dropped 154,000, 139,000 and 111,000 respectively. But last month, the slippage was only 11,000. That was the smallest decline since the monthly gain of December 2007.
It would have been disappointing if the parallel (but smaller) household survey had not cemented the positive impression, but the results were convincing. Employment rose by 227,000, the most since April 2008. The labour force fell slightly in the month, so the unemployment rate nudged down to 10% from 10.2%. October will probably turn out to be the cyclical high."
Discussing the pros and cons of lifting the value of the yuan, with Valerie Plagnol, director of global research of CIC Banque Privee and Luca Silipo, chief economist at Natixis, with CNBC's Amanda Drury & Sri Jegarajah:
Asia
The MSCI Asia Pacific Index rose 0.5% Monday and is up 71% from a five-year low on March 9th last.
The Nikkei 225 rise 1.45%; the Shanghai Composite added 0.45% and Australia's S&P/ASX 200 dipped 0.55%.
Gold is trading at $1,154.90 down $6.50 from Friday's spot price close in New York.
Bloomberg says gold’s best year in three decades has yet to match the returns of an interest-bearing checking account for anyone who bought the most malleable of metals coveted for at least 5,000 years during the last peak in January, 1980.
Investors who paid $850 an ounce back then earned 44 percent as gold reached a record $1,226.56 on Dec. 3rd in London. The Standard & Poor’s 500 stock index produced a 22-fold return with dividends reinvested, Treasuries rose 11-fold and cash in the average U.S. checking account rose at least 92%. On an inflation-adjusted basis, gold investors are still 79% away from getting their money back.
Jim Quigley, CEO of Deloitte Touche Tohmatsu sheds light on the new world economic order in today's environment, with CNBC's Oriel Morrison:
Goodbody chief economist Dermot O’Leary comments: Economic View; Budget 2010 primer - -"Let’s recap on the situation ahead of Wednesday’s Budget in Ireland. The budget deficit will hit close to 12% of GDP in 2009 and is expected to rise to 13.5% of GDP in the absence of any action to rectify the situation. More importantly, roughly three-quarters of this deficit is structural, in that it will not be diminished even in the event of an improvement in economic activity. This is too high for comfort and the rise in Irish bond yields relative to relatively safer German ones has been partly in response to this perceived increase in risk over the past twelve months, although contingent liabilities on the banks are also playing a role. Ireland is currently paying 1.6% more for 10-year debt than our German counterparts. On the basis of expected end-2010 debt levels, this amounts to extra interest of €300m per year on current borrowing trends, which means less resources for other areas.
To give the Government some credit, it did recognise and actively tackle the budget deficit issue relatively early – first actions occurred in July 2008 – but the actions so far are clearly not enough and Ireland is facing into a four-year fiscal consolidation period. So far, the majority of the adjustment has come in the form of tax increases rather than spending cuts, but we will be looking for a reversal of this feature in Budget 2010. As is usually the case in these types of events in Ireland, there has already been some leaking of the measures to be introduced on Wednesday. The planned saving, as was pointed out as early as April, is still €4bn.
Savings on public sector pay and pensions should amount to €1.3bn, and after Friday’s Government rejection of union proposals for the introduction of compulsory leave, it now looks like this will be mainly in the form of plain vanilla pay cuts. Reductions in social welfare spending will amount to another €1bn. Given the reduction in building costs, there can indeed be a reduction to the capital spending budget in nominal terms without it having the full effect on the volume of projects to be completed. Sound public finances are the bedrock for a sound economy. Ireland has rightly got credit for its efforts to address the problem over recent months. It’s not an enviable task, and indeed the political arithmetic is on a knife-edge, but that process must continue when Finance Minister Brian Lenihan makes his announcement at 3.45pm on Wednesday afternoon."
Goodbody's Eamonn Hughes comments: Irish Financials; Property valuers keep us on our toes - -"CB Richard Ellis, the property agent, is quoted in the media over the weekend as indicating that combined effect of the 80% windfall tax on development property, the ban on upward-only rent reviews and the recent flooding mean that the government is going to have to revise down its €47bn market valuation for the €77bn of loans to be transferred into NAMA. The Director of Research at CBRE has indicated that they are in the process of valuing the first tranche of some of the loans of the 10 big developers for the banks and that “the market value of some properties has certainly fallen, mainly in the area of unzoned land”. The agency had commented last week on the impact that the introduction of a ban upward-only rent reviews could have on property values and on the attractiveness of the Irish commercial property market as an investment proposition, with the knock-on implications for the banks’ NAMA loans and, therefore, potentially the Government from such a move being emphasised over the weekend.
Both banks released RNS statements last week ahead of proposed AGM’s (December 23 for AIB and in early January for BOI). Given updated commentary from the banks, we revised up our NAMA loan haircut assumptions from 28% to 33% for AIB and from 18.5% to 26.5% for BOI, with knock on implications for estimated capital needs. BOI in particular was more negative on the impact of valuation regulations, with the various assumptions on discount rates and the timing of cashflows also having a large effect on the ultimate valuation. As was pointed out by the Government on 16th September, the 30% haircut on NAMA loans from the banks expected to participate was an estimate, with the final haircut unlikely to be known until all loans have been valued and transferred to NAMA (although obviously, the larger loans, which are going in first will have a significant impact on the overall haircut)."
