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US: The Dow Jones Industrial Average rose to its highest level since
June 2008 on Wednesday after existing-home sales rose by more than forecast last
month and encouraging earnings from Tuesday boosted technology stocks higher.
After markets closed at 4:00pm, Apple announced a
stunning fiscal 2011 second quarter, which ended March 26, 2011,
with 83% revenue growth, 95% profit growth record and iPhone sales up 113%.
Apple's results and outlook pushed up its shares
in after-hours trading by 3.9% to $355.69 at $342.41.
The market capitalisation was $315.45bn compared with Microsoft's $216.45bn and
Japan: The impact of last month's
devastating quake and tsunami disaster will cut Japan's economic growth to 0.8% this year, the OECD said Thursday, halving its previous forecast of
However, the Paris-based think-tank for 34 mainly developed countries, said
massive government and business investment in reconstruction is expected to
trigger a sharp rebound in 2012, with the economy growing 2.3% up from the
OECD's previous forecast of 1.3%.
The OECD said: "In addition to the usual risks related to the strength of
world trade, exchange rates and commodity prices, there is great uncertainty
about developments in Japan, including the duration of electricity shortages,
the problems at the Fukushima nuclear plant and the size and timetable of
government reconstruction spending. Consequently, the timing and strength of an
economic rebound is exceptionally difficult to forecast."
UK retail sales expected to contract in March: Davy economist, Conall Mac Coille, comments - -
"The outlook for UK
consumer spending has deteriorated as weak nominal wage growth,
coupled with higher tax rates and CPI inflation, has pushed down on
real incomes. Since January, the rise in the value added tax (VAT)
rate by 2.5 percentage points to 20% and higher oil prices have had
a large negative impact on UK consumers' spending power. Hence,
measures of UK consumer confidence have declined through the second
half of 2010 as consumers have realised that the negative impact of
the planned fiscal consolidation was upon them. Other indicators for
spending, ahead of today's retail sales data, have indicated
deteriorating conditions in the retail sector.
Today's release of UK retail sales is expected to show a
contraction of 0.4% on the month in March following a 1% decline in
February. In January, retail sales grew by 1.1% despite the increase
in VAT rates during that month. But the rise in January most likely
reflected a bounce-back from the 0.5% decline in December, which
most likely reflected poor weather conditions during that month. So
the full impact of the slowdown in retail sales on consumer spending
may not be felt until the Q2 national accounts data.
Yesterday's release by the Bank of England of the minutes of
the April Monetary Policy Committee (MPC) meeting suggests that the
weakness of consumer spending is pushing out the likelihood of rate
increases in the near future. Most members thought that the news on
the month 'had probably been to the downside.' That said, the MPC
warned that CPI inflation could still rise above 5% in 2011 despite
the recent decline in the headline rate to 4.0% in March from 4.4%
in February. However, a rate rise in May now seems far from the
certainty that the market had priced up until the recent negative
news on the UK consumer."
European Peripheral Debt: Folker Hellmeyer, chief analyst at Bremer Landesbank, comments on the widening credit default swaps of Greece and Portugal:
Economic View: State considers asset
sales; Goodbody economist, Juliet Tennent, comments
- -"According to the Report of the Review Group on
State Assets and Liabilities, released yesterday, the NAV of the commercial
State assets that it is recommending are sold is around €5bn, which the report
also caveats is no more that a rough guide. As the Memorandum of Understanding
between Ireland and the IMF/EU does not specify a target for asset disposals,
any proceeds of such sales could be used to reduce the State’s projected gross
It would have no impact on the deficit
position which would nevertheless have to be tackled and the ongoing austerity
measures would still have to be implemented. The report recommends a planned
programme of asset sales, as opposed to an accelerated process, thus it may be
some years before any value is realized.
On our forecasts, a €5bn reduction in the State’s debt level would reduce the
Debt/GDP ratio by roughly three percentage points and assuming the programme was
complete by 2014, would see the ratio rise to 117%, from 101% in 2011, versus
the 120% we currently forecast."
Irish Financials; Legal challenge to AIB
debt restructuring; Goodbody's Colm Foley comments
- -"We note the Government’s plans to buy back some of
AIB’s subordinated debt have been met with a legal challenge from two of its
The action is in relation to the Subordinated Liability Order (SLO), which was
passed last week in the high court and will amend certain debt coupon terms,
maturity dates, and permit the purchase by AIB of the debt instruments. With
€2.8bn of hybrid debt capital outstanding, the Finance Minister has previously
said that the Government intends to 'take whatever other action is necessary to
ensure appropriate burden sharing by remaining subordinated bondholders.' Of
relevance to BOI, is its €2.7bn of hybrid capital, which will be central to its
€4.2bn equity raise plan.
The legal challenge has the potential to hinder the burden sharing, however,
there appears to be an appetite on the Government’s side to ensure this is
pushed through. The motion has been adjourned until the first week in May."
Sweden: ‘The Canada of Europe’: "They’ve got good economic growth, they’ve got a good underlying export-based economy, so I don’t think we should be worried about this, but I think we should keep a good eye on it,” Tim Skeet, managing director of the Financial Institution Group at RBS, told CNBC about the Swedish economy and unemployment rate:
In New York Wednesday, the
Dow rose 187 points or 1.52% to 12,453.
The S&P 500 added 1.35%
and the Nasdaq advanced 2.10%.
MSCI Asia Pacific Index gained 1.3% Thursday.
Japan's Nikkei 225 rose 0.82%; China's Shanghai composite index added 0.65%;
Australia's S&P/ASX 200 Index climbed 1.13% and the Bombay Stock Exchange's Sensex index increased
0.78% in Mumbai.
BDI closed at 3,005 on Thursday, Dec 31st - - a rise of 289% in 2009. The index
averaged 59% lower in 2009 than a year earlier.
Thursday, July 15, 2010, the index fell for the 35th straight session, by 9
points, or 0.537%, to 1,700 points,
On Friday July16th, the BDI rose 20
points or 1.12% to 1,700 to break the 35-session losing streak.
Wednesday this week, the BDI slipped 9 points or 0.71% at 1,262.
The Financial Times reported
earlier in January, that Australia’s flooding and fears of ship oversupply has
pushed down a gauge of the cost of hiring ships to carry coal, iron ore and
other dry bulk by nearly half since October to the lowest level since the
aftermath of the financial crisis. The Baltic Dry index, the widely watched
measure of dry bulk charter rates, fell to 1,453, nearly half the 2,784 peak
reached on October 27, 2010.
margin between the US benchmark WTI (West Texas Intermediate) used on the New
York Mercantile Exchange and Brent is over $12.
said in early February that a surge in oil inventories in Cushing, Oklahoma,
where WTI is delivered into America’s pipeline system, has depressed the value
of the benchmark against other yardsticks. The
International Energy Agency said on Thursday that with “few relief valves” to
cut the stock overhang in Cushing, the price dislocation “may persist for months
[or years] to come”.