|As the Senate debates bipartisan immigration reform legislation, President Barack Obama and Vice President Joe Biden meet with DREAMers who have received Deferred Action and US citizen family members of undocumented immigrants, in the Oval Office, May 21, 2013. |
the agri-services group, today reported in
a trading update a 5.2% fall in revenues for the third quarter.
Revenues for the nine months to the end of April rose by 3.8% to €995.7m from
€959m with bad weather especially in the UK blamed.
Liam Igoe of Goodbody comments - - "Origin Enterprises FY13 eps
maintained despite weather factors Origin Enterprises has reported in its IMS
that underlying Q313 sales (to end April) were 4.6% lower yoy (-8.4% volumes and +3.8% prices) due to adverse weather. Much of
this will be recouped in Q4 and we expect that the financial implications of any
residual impact will be offset by a continuing strong performance from associates. Origin’s core
UK Agronomy operation suffered the brunt of the “weather effect”. Crop
protection volumes were down by double-digit percentages, but some of this should be recovered in
Q4. The Polish agronomy operations (Dalgety) saw good organic growth while fertiliser
sales increased (+5% yoy in Q3) after a surge in demand after the weather improved
towards the end of April. The marine protein JV continued its strong performance into Q3 on
the back of higher prices and margins while Valeo Foods is performing as expected.
We are retaining our eps forecasts, though reducing the consolidated profits
by €1.7m and increasing the associates by an equivalent figure – we forecast these short term trends to reverse next year. We continue to rate Origin a Buy in view
of its structural growth story, earnings resilience in the face of adverse
conditions, strong financials and modest rating."
Bank of Ireland Enters MSCI All-World Index at end of this week:
Eamonn Hughes of Goodbody comments -- "Bank of Ireland is set to enter the
MSCI World All-Share Index later this week, on May 31. Potentially c.1bn shares need to be purchased which is c.3% of the share count,
but given the relatively tight shareholder structure, it will be closer to 6% of the
actively traded free float (and c.20% of the trading in the name over the past 3 months). The shares
are up strongly year to date (and 37% since our Buy call) and now reside at our trough
TNAV of 19.3c.
There is likely to be a capital raise of c.€1bn at some stage later in the
year to repay the government’s preference shares and whilst likely to be dilutive, recent sector
experience has seen stocks re-rate subsequently as the market warms to improving capital
metrics should it involve reducing State interests. However, BOI must navigate potential stress
tests in the autumn which may see investors more reticent about getting involved ahead of the
The stock should get a kicker from the index inclusion but a TNAV valuation
is looking stretched for a bank losing money this year and just the right side of breakeven in 2014. Medium term TNAV and pre-provision profit growth rates warrant premium multiples for BOI but the stock is now trading on a 15-20% premium (TNAV and PPP) to UK peers and c.10-30% premium to European peers. The longer term story looks pretty good on the name but its recent squeeze is starting to stretch valuations in the short term."
Banks: Kennedy Wilson close to large investment in Irish property; Eamonn
Hughes and Colm Foley of Goodbody comment -- "Press reports this morning
appear to confirm recent speculation that Kennedy Wilson (KW, the 1% shareholder
in Bank of Ireland) is close to securing a portfolio of 16 properties for a cash
sum of €306m. On May 20th, the vehicle which owns the properties, Opera Finance,
and formally connected with Treasury Holdings, indicated that KW’s all cash
offer had been endorsed. Bondholders in the vehicle must vote on the sale, where
KW was the highest of 3 bids all over €300m. The portfolio includes some high
profile buildings such as the Stillorgan Shopping Centre, the BOI headquarters
and the KPMG building in the city centre. The rent roll delivers a c.8% yield on
the purchase price.
Market speculation in recent weeks has centred on KW successfully acquiring
the portfolio, so there is unlikely to be much surprise by developments over the
past week. Nevertheless, property market participants have suggested that
success in acquiring this portfolio will give KW critical scale in Ireland which
may see it considering forming a REIT (Real Estate Investment Trust) at some
stage in the future (a point also picked up in some editorials over the
Economic View: Shift from austerity to growth gathering pace;
O'Leary, chief economist of Goodbody, -- "The slow and belated shift in
European policy from austerity to growth appears to be gathering steam. Various
reports over recent days suggest that policymakers are looking at ways to both
slow down the process of deficit reduction as well as reports that even Germany
is willing to help to spur growth in the bloc.
In the periphery, the Head of the eurogroup, Jeroen Dijsselbloem, has said
that the EU may consider giving Portugal more time to meet its deficit targets
if economic conditions worsen, while the European Commission will decide
tomorrow whether it will give Spain until 2016 to bring its deficit to the 3% of
In the core, German and French politicians, including Wolfgang
will meet in Paris this morning and may announce plans to tackle Europe’s
chronic youth unemployment situation. Meanwhile, Spiegel is reporting that
Schäuble has written to his economics minister saying that he believes that
Germany should offer bilateral aid to peripheral economies, with the story
suggesting that this aid could come by way of low interest loans from the
government-owned Kfw development bank. If this indeed comes to pass, it would
represent a significant change to the German perspective on austerity.
According to this morning’s Irish Times, even Ireland may join those
countries attempting to slow the process of austerity. Officials are reportedly
examining the possibility of an additional €1bn being funnelled towards capital
projects. Such a plan is made possible due to the fact that, under current
official forecasts, deficit targets agreed with the Troika will come in better
It is worth noting that some support for growth policies in the euro area
appeared following the election of Francois Hollande in 2012, but nothing came
of it. This time around there is broader support for growth policies and there
is a welcome momentum behind it."
Irish retail sales and earnings data due
today: Conall Mac Coille, chief economist of Goodbody,
comments - - "This morning's data should provide a gauge of the strength of the
Irish consumer at the start of 2013. We already know that retail sales fell back
sharply in Q1. However, this fall was not entirely unexpected. Budget 2013 tax
rises and spending cuts were always likely to hit consumer spending hardest in
Q1. Earnings and labour costs data will provide the first indication of wage
growth in the public and private sectors in 2013, following a 0.6% rise in 2012.
Fall in retail sales in Q1 not unexpected
This morning's data should provide a gauge of the strength of the Irish consumer
at the start of 2013. We already know that retail sales fell back sharply in Q1
— by 3% quarter-on-quarter, or 1.9% excluding the volatile motor trades sector,
in the first quarter. However, this fall was not entirely unexpected. Budget
2013 tax rises and spending cuts were always likely to hit consumer spending
hardest in Q1. Our forecast for broadly flat consumer spending in 2013 (+0.3%)
assumed that retail spending would contract in Q1. So the April data, due today,
may give us an indication of the strength of the Irish consumer heading into Q2.
Some bounce-back from the sharp fall in March may materialise. Volumes fell 1.9%
in March, with the unseasonably cold weather in that month perhaps weighing on
an already weak retail sector.
Earnings and labour costs for Q1 are also released this morning. The 0.3% fall
in the final quarter of 2012 partially unwound some of the gains seen in
previous quarters, but overall average weekly earnings were up 0.6% for the
calendar year 2012 — the first rise since the series began in 2008. This
compares to 1.7% CPI inflation last year, so real wages continued to fall. The
national accounts measure for wages suggests earnings growth of 1.8% for the
calendar year 2012, so the true path of wages is still uncertain, but they have
certainly stabilised in the last number of quarters.
The outlook for Q1 is mixed. Private sector employment growth likely continued
in the quarter which should feed into wage growth in the sector, but the cuts to
the public workforce will weigh on employment and wage growth. The latest cuts
agreed to the public pay bill will not become apparent in the data until Q2,
which will limit overall inflation in the first half of the year."
US markets were closed on Monday for the Memorial
Day public holiday.
The MSCI Asia Pacific
Index of shares rose 0.3% Tuesday as the yean fell over 1% against the US
The Japanese Nikkei 225
rose 1.23%; the
Shanghai Composite Index added 1.24%; Korea's Kospi 200 index gained 0.32%;
Australia's ASX/S&P 200 rose 0.22%; in Mumbai, the Bombay Stock Exchange the
S&P BSE India Sensex Index climbed 0.49%.
In Europe, the
Dow Jones Stoxx Europe 600 is up 0.31% in mid-morning trading Monday.
In Dublin, the
ISEQ is up 0.73%.
Enterprises jumped by 9.62%.
Key Index Performance
Bank of Ireland Daily Report
The euro is
trading at $1.2906 and at £0.8554.
For live currency updates, check the right-hand
column of the Finfacts home
The US dollar
fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.
The Baltic Dry
a measure of shipping costs for dry commodities,
hit an all-time High of 11,771 on the 21st of May, 2008.
From that time it reversed and on the 5th of December, 2008 it hit a low of 663
- - close to a 1986 low.
On Thursday, July 15, 2010, the index fell for
the 35th straight session, by 9 points, or 0.537%, to 1,700 points,
the BDI fell 2 points to 826 - - UK markets were closed on
Crude oil for July 2013 delivery is currently
trading on the
Chicago York Mercantile Exchange (CME/Nymex)
at $94.55 up 40 cents from Friday's close (markets were closed Monday). In London, Brent for July delivery
is trading on the
International Commodities Exchange at
$103.54. The North Sea
benchmark accounts for two-thirds of the global market.
reports that for the
first year since the futures were created, Brent crude is poised to overtake
West Texas Intermediate (WTI) oil as the world’s most-traded commodity.
in Brent jumped 14% to average 567,000 contracts in the year to November 20
compared with all of 2011, while WTI fell 17% to 575,000, according to data from
the ICE Futures Europe exchange in London and New York Mercantile Exchange
compiled by Bloomberg. The number of Brent futures changing hands has exceeded
those for WTI every month from April through October,
the longest streak since at least 1995.
Brent, produced in the
North Sea, is gaining favour among traders because of its role as the benchmark
for energy prices from Saudi Arabia to Russia. Prices have climbed 34% in the
past two years, reflecting everything from war in Libya to the embargo on Iran.
WTI, the main grade in the US, has risen 9% as the nation, which prohibits crude
exports, has struggled to clear a glut at Cushing, Oklahoma, the delivery point
for Nymex futures.
Gold spot price
The spot price
of an oz of gold is trading on the
CME in Chicago at $1,392.50 up $5.70 from Friday's closing (markets were
Gold had hit a
record high of $1,921.05 a troy ounce on Sept 06, 2011.
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