reports that emerging-market stocks dropped to a six-week low before the
release of minutes of the Federal Reserve’s July meeting. India’s rupee extended
falls to a record low, while Turkey’s lira pared losses after the central bank
said it would tighten monetary policy.
India’s S&P BSE Sensex Index slumped for a fourth day to the lowest since Sept.
11, while the rupee weakened 1.3% against the dollar. The lira slipped 0.4%
after sliding as much as 0.9%, while the benchmark equity gauge headed for a
two-month low. Indonesian stocks rebounded after sliding 11% in the previous
The MSCI Emerging Markets Index slid 0.6% to 926.48 at 2:02 p.m. in London, its
fifth day of declines.
Malaysia today cut its forecast for growth this year after second-quarter growth
missed estimates. The economy may expand 4.5% to 5% in 2013, from a previous
prediction of as much as 6%, the central bank said in Kuala Lumpur today. Gross
domestic product rose 4.3% last quarter from a year earlier, after gaining 4.1%
in the previous period, it said.
Glanbia, the Irish food group,
today reported a first half of the year revenue rise by 13% to almost €1.68bn.
Pre-tax profits for the six months to the end of
June increased to €95m from €88m the same time last year.
Glanbia's Dairy Ireland division reported a
rise in saw revenue but earnings dropped, which the company blamed on lower
volumes and higher milk input costs.
John Moloney, group managing director, said: “The
group’s first half performance was driven by Global Performance Nutrition and
Global Ingredients. These two business segments now represent over 70% of
Group EBITA and are our core platforms for future growth. We expect little
change in the external operating environment in the second half and with clear
challenges remaining in Dairy Ireland we are maintaining our 2013 full year
guidance of adjusted earnings per share growth of between 8% and 10%, on a
constant currency basis. Our recently announced management changes put in place
an excellent team to continue to drive the business forward and to evolve the
long term strategy that will deliver the next phase of growth. Overall, Glanbia
is in a strong position to capitalise on its unique portfolio of global
businesses, development opportunities and strong balance sheet.”
Glanbia Nutritionals strong, Ireland
weak, 2% FX headwinds in H2: Robert Eason of Goodbody
comments - - "Glanbia reported a 10.6% rise in adjusted eps for H113. Much of
the variance versus our 13% forecast can be attributed to the larger fall in
Dairy Ireland profits (when adjusted for re-statement) but most trends were as
expected. Global Performance Nutrition increased profits by 18.3% driven by a
near 13% increase in volumes combined with a 50bps margin improvement. Profits
would have been higher again except for the fact that the benefits of lower
high-end whey prices will not be felt until H2. Branded volumes were up 20%+.
Its B2B businesses saw a 6% rise in profits. Underlying volume growth was 7%
while pricing / mix added another 6%, Aseptic Solutions +4% offset by a 90bps
margin fall. This was due to the decline in whey prices (which impacts profits
here immediately, whereas GPN’s impact is lagged as old higher-priced whey stock
gets used first). We believe Premix was slightly ahead in H1 as was Cheese.
The fall in Irish profits was worse than we had forecast with the decline
driven, as expected, by lower volumes and higher input (i.e. milk) costs in the
Consumer Products area. The underlying position within Consumer Products was
actually worse than the headline 24% fall when the fact that the agribusiness
did well in H1 is taken into account.
Trends are expected to be broadly similar, though perhaps accentuated, into H2.
Global Performance Nutrition margins should strengthen, Ingredient Technologies
weaken further while Premix Ingredients should return to solid growth. Elsewhere
Associates will contract somewhat while Ireland remains very tough.
EPS guidance is being maintained by Glanbia at 8-10% on a constant FX basis. We
currently forecast 10% (continuing) eps growth on the assumption of a similar
dollar rate in FY13 as in FY12. Adjusting for recent euro strength, we expect to
cut our euro based eps to c.8%, though the underlying divisional assumptions are
unlikely to alter significantly (Ireland a bit lower but Nutritionals higher)."
Economic View: Euro at high end of a tight range: Dermot O'Leary of
Goodbody comments - - "In the four years after the start of the financial crisis
in 2008, the euro experienced repeated bouts of weakness followed by
appreciation. Over that period, the euro moved in a wide range between $1.20 and
$1.60 and, relative to sterling, the euro first moved from below 70p to 95p
before oscillating in a range of 80p to 90p.
Given this history, moves in currencies over the past twelve months have been
relatively minor. Relative to the dollar, the euro reached a high of $1.36 at
the beginning of the year but didn’t fall below $1.28 (currently $1.33). The
currency has been even more stable relative to sterling, moving in a very tight
range around 85p (currently 85p).
An easing, firstly of the financial crisis, and then the euro area sovereign
crisis, has undoubtedly played a role in reducing currency volatility. However,
despite the improvement in the euro area data in Q2, the relative strength of
the euro is not justified by growth differences between the developed economies.
Instead, the more aggressive quantitative easing policies of the Federal Reserve
and the Bank of England have managed to maintain their currencies at relatively
depressed levels. But where does the euro go from here?
While there have been signs of improvement across the developed economies of
late, the euro area, with 12% unemployment, has a lot further to travel to
return to full employment and thus see inflation pressures emerge once more. The
more hawkish members of the ECB Governing Council will continue to warn of the
risks of inflation, but these are unlikely to materialise in the foreseeable
future. While we do not see major currency moves in prospect, with Fed tapering
coming and growth strengthening in the UK, the euro should weaken over the
Banks: Investec enter Irish mortgage market; Eamonn Hughes and Colm Foley
comment -- "Press reports this morning (Irish Independent) indicate that
Investec is set to enter the Irish mortgage market. The bank will offer variable
mortgage rates and will source new business through intermediaries and hopes to
be up and running by year end. The initial focus will be on the Dublin market.
The bank has a fund of about €250-350m, which at current activity levels would
equate to around 8-10% of the new business market. However, it is unclear if
this is the full mortgage pool as we note its focus in the UK on professional
mortgages, which may indicate a more targeted approach to its new Irish business
in due course. In the UK, Investec offers “professional mortgages” which it says
are mortgages for business professionals, qualified professionals and
entrepreneurs with sophisticated financial circumstances. Investec considers
qualified professionals to be qualified in one of the following; accountant,
actuary, architect, barrister, dentist, medical practitioner, optometrist,
pharmacist, pilot, solicitor, surveyor and veterinarian, with a minimum income
of £50,000. A business professional works in the following roles; with a minimum
annual income of £75,000, director, partner, senior executive, manager, business
head and someone with influence over corporate governance.
The target market of Investec in the UK implies a possible preference for a
cohort of mainly buy-to-let investors in Ireland. With many of these investors
likely to be facing greater financial oversight in recent months, Investec may
be well placed to benefit. Any new competition to the market is unlikely to be
welcomed by the main banks. However, we suspect the Investec approach may be a
more targeted one in due course which is unlikely to materially hamper the
profit progression at the main banks."
David McNamara, economist at Davy comments - - "Today's FOMC minutes from
its July meeting (19.00) may provide the first firm indication of when the Fed
will begin to taper its $85bn a month asset purchase programme. The consensus is
that this will begin by year-end, with another positive labour report perhaps
the tipping point ahead of the September meeting.
Tapering could begin by year-end
Today's FOMC minutes from its July meeting (19.00) may provide the first firm
indication of when the Fed will begin to taper $85bn a month asset purchase
programme. Consensus is spilt on when the central bank will begin the process as
a flood of good news suggests that the economy is nearing 'escape velocity'.
Most expect this process to begin before year-end – perhaps as soon as the end
of Q3, with a minority expecting the Fed to hold off until Q1 2014.
While today’s minutes may give an indication of the range of options the FOMC is
considering, the key data point ahead of the September 17th meeting will be the
employment figures for August on September 6th. The unemployment rate fell to
7.4% form 7.6% in July, and a further fall in August may prompt the Fed to begin
tapering by year-end.
Elsewhere, July's UK public finance numbers should reveal that the government is
on track to hit its year-end borrowing target of £112bn. July is the
second-biggest month for tax revenues and the monthly surplus is expected to
rise to £3.5bn from £1.6bn in July 2012."
In New York Tuesday, the
Dow fell 8 points or 0.05% to 15,003.
The S&P 500 added 0.38%;
the Nasdaq advanced 0.68%.
The MSCI Asia Pacific Index
retreated 1.7% Wednesday.
Japan's Nikkei 225 rose
0.21%; China's Shanghai Composite gained 0.50%; Korea's Kospi index declined
1.08%; Australia's S&P/ASX 200 rose 0.53% and in Mumbai, the Bombay Stock
Exchange the S&P BSE India Sensex Index tumbled 1.830%.
In Europe, the
Dow Jones Stoxx Europe 600 is down 0.31% in mid-afternoon trading Wednesday.
In Dublin, the
ISEQ is up 0.24%.
Irish Share Prices
Key Index Performance Statistics
AIB Daily Report
Bank of Ireland Daily Report
The euro is
trading at $1.3378 and at £0.8522.
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.
Baltic Dry Index,
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 rose 30 points or 2.69% to 1,145.
Global rebalancing — the tanker scrapyard index?
Crude oil for October 2013 delivery is
currently trading on the
Chicago York Mercantile Exchange (CME/Nymex)
at $104.81 down 30 cents from Tuesday's close. In London, Brent for October
delivery is trading on the
International Commodities Exchange at
Sea benchmark accounts for two-thirds of the global market.
Finfacts, July, 15, 2013:
US West Texas Intermediate oil benchmark jumps in
July - - margin between WTI and Brent
Gold spot price
The spot price
of an oz of gold is trading on the
CME in Chicago at $1,363.50, down $9.50 from Tuesday's closing.
Gold had hit a
record high of $1,921.15 a troy ounce on Sept 06, 2011.
out our subscription service, Finfacts Premium
, at a low annual charge of €25