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Markets News Afternoon: CRH's Polish unit fined €25.6m; Irish labour disputes soar; Central Bank to add senior staff; US set to lose on bailouts of insurance and car firms
By Finfacts Team
Dec 10, 2009 - 4:39:03 PM
L – R: Bill O’Herlihy, Broadcaster & Chairman – O’Herlihy Communications, Jackie Masterson, Taxation Partner – Russell Brennan Keane, Mark Cunningham, Director Business Banking – Bank of Ireland, Liam Rattigan, Chief Executive – Russell Brennan Keane at a Budget 2010 Breakfast Meeting in Dublin, Dec 10, 2010.
Central Bank appointments
The Central Bank announced today planned senior appointments as part of the financial regulatory structure that is being introduced. These include three new Assistant Director General positions with responsibility for Enforcement, Markets Supervision and Policy and Risk.
The positions will be advertised in the coming days and are in addition to the previously advertised position of Assistant Director General for Financial Institutions Supervision. In addition the Central Bank has appointed Con Horan to the position of Special Adviser to the new Head of Financial Supervision, Matthew Elderfield. Horan will provide advice to Mr Elderfield on supervisory matters, leading supervisory projects and assisting in supervisory crisis management and will be deputy chairman of the Central Bank’s Supervisory Risk Committee.
In addition, he will chair a proposed new advisory risk expert panel on financial regulation. Each of the new posts will report directly to the Head of Financial Supervision, Matthew Elderfield, who takes up his position with the Central Bank in January. The Central Bank also announced today that the panel of external risk advisers will be recruited in the New Year. These experts will support the supervisory teams in assessing governance and risk management standards and provide a resource for analysing the business risks and the commercial environment facing regulated firms. They will be asked to provide periodic high-level risk assessments for Central Bank senior management.
Speaking today, Central Bank Governor, Patrick Honohan, said: “These are very important posts in the new financial regulatory structure at the Central Bank. While our regulatory approach will emphasise risk-based supervision and an open, but challenging, dialogue with regulated firms, it must be underpinned with a strong enforcement capability.”
Irish labour disputes rise: 66,887 days lost to industrial disputes in the third quarter
During the third quarter of 2009 there were 66,887 days lost to industrial disputes. This compares with 578 for the same period last year.
Eleven industrial disputes began in the third quarter of 2009 and two disputes carried over from the second quarter.
There were 20 disputes in progress in the first nine months of 2009, involving 25,076 workers and a total of 81,530 days lost.
The Industry sector accounted for almost 75% of the total days lost in the first nine months of 2009.
The Bank of England left interest rates unchanged at 0.5% and its quantitative easing program intact at $325 billion Thursday, as widely expected. Anthony Gibbs from Vantage Capital Markets and Geoffrey Dicks from Novus Capital Markets weigh in on the decision:
CRH on Polish findings
CRH plc announced today that it has received notification from the Polish Office for Competition and Consumer Protection (OCCP) that, arising from an investigation conducted by it since mid 2006 into the Polish cement industry, it has concluded that 7 companies including CRH subsidiary Grupa Ożarów S.A., Lafarge Cement S.A., Górażdże Cement S.A., Cemex Polska S.A., Dyckerhoff Polska Sp. z o.o., Cementownia Warta S.A. and Cementownia Odra S.A. were involved in anti-competitive practices. As a result the OCCP has levied fines. In the case of CRH subsidiary Grupa Ożarów the fine amounts to PLN 104.97 million or approximately €25.6 million.
CRH says the conclusions of the OCCP are a matter of serious concern as it always understood that Grupa Ożarów conducted an independent commercial policy in the Polish cement industry. It says this has been verified by analysis undertaken, at the request of CRH, by leading Polish economic experts. Following a preliminary review of the OCCP conclusions, CRH and Grupa Ożarów have been advised that there are significant grounds for appeal.
CRH says its Code of Business Conduct sets clear standards for the conduct of its operations in the various territories in which the Group operates and expressly prohibits any anti-competitive behaviour.
An appeal to the Polish courts must be lodged by 23rd December 2009.
US Treasury Secretary Timothy Geithner testifies before the Congressional Oversight Panel on TARP:
US
US Treasury Secretary Timothy Geithner said today that he government is unlikely to recover all its bailout support for insurance giant AIG (American International Group) or the car makers General Motors and Chrysler
He also said he chose to extend the $700 billion Troubled Asset Relief Program to give the Obama administration more time to unwind its bank-rescue efforts, adding that the economy still faces “significant headwinds,” and housing markets remain dependent on government support even as they are stabilising.
Geithner said in prepared testimony for the Congressional Oversight Panel, that US. financial and economic conditions have improved,.
The Treasury expects to make money on its banking investments, other than the bailouts for the insurance and car firms.
“There is a significant likelihood we will not be repaid from our investments in AIG, GM and Chrysler,”Geithner said.
The Government Accountability Office said on Wednesday that U.S. taxpayers will lose $30.4 billion from the car industry bailout, down from a previous estimate of $43.7 billion. The GAO report predicted a similar loss of $30.4 billion in AIG, down from a previous estimate of $31.5 billion.
US markets
The US trade deficit narrowed unexpectedly in October, falling to $32.94 billion as the rise in exports from September of goods such as cars was slightly higher than the increase in imports. The figure, representing the US deficit in international trade of goods and services, is 7.6% lower than the downwardly revised $35.65 billion trade gap the US ran in September. Separately, the number of US workers filing new claims for jobless benefits rose more than economists expected last week. Total claims lasting more than one week, meanwhile, fell.
Europe's debt warnings and downgrades this week are a hiccup in the state of the global recovery. Andrew Busch, of BMO Capital Markets, tells CNBC whether investors should be worried:
In Europe, the Dow Jones Stoxx 600 has gained 0.73%, Thursday.
The ISEQ has risen 0.64% in Dublin.
CRH is up 3.4%; AIB has lost 2.9% and INM has rebounded 12.5%.
On the New York Mercantile Exchange, oil for January 2010 delivery is trading at $70.70 up 3 cents from Wednesday's close. In London, Brent crude for January delivery is trading at $72.00 a barrel.
Currencies
The euro is trading at $1.4715 and at £0.9058.
For live currency updates, check the right-hand column of the Finfacts home page.The dollar traded at a record low $1.6038 per euro on July 15, 2008.
