The Bank of Russia on Monday raised interest rates after
President Putin's decision to seize Crimea, an automonous region in Ukraine.
would be vulnerable to tough economic sanctions
The bank raised its rates by 1.5 percentage points, bringing the key rate to 7%
The dollar hit an all-time high of 37 rubles and the euro reached its record
high of 51.2 rubles at the market opening.
"Given downside risks for fixed investment growth
and potential economic sanctions by Western nations on Russia, this monetary
tightening could send Russia into recession in 2014," Danske Bank said in a
Moscow News reported that Russia’s currency fell to a historic
low on Monday as stock markets in Moscow lost more than 9% of their value
within minutes of the opening of trading.
Such a crash was widely predicted by experts after Russia
approved the use of military force in Ukraine on Saturday, prompting widespread
condemnation from the international community.
Responding to what it described as “risks to financial
stability,” Russia’s Central Bank increased interest rates by 1.5% on
Monday. The regulator has left interest rates unchanged for the last 18 months.
The falling ruble was accompanied by sharp declines on Russia’s
The MICEX bourse was down more than 9% under an hour after
trading began at 10:00 a.m., while the dollar-denominated RTS lost over 10% .
Major Russian companies saw millions of dollars of value wiped
Shares in state-owned gas giant Gazprom, which is considered
particularly vulnerable to events in Ukraine because of its extensive pipeline
system in the country, fell by almost 11% .
Ireland reports “significant” improvement in 2013 results
Economy 2014: Manufacturing PMI up again, excluding patent drug cliff falls
Economy 2014: Quarter of additional jobs in 2013 went to foreign nationals
manufacturing PMI recovery continues in February 2014
manufacturing showed more weakness in February; Services PMI rose
The strong upswing in the UK manufacturing sector
was maintained during February, as levels of
production and new business continued to rise at
robust and above-trend rates. The solid
performance of the sector again filtered through to
the labour market, with jobs added at the fastest
pace since May 2011.
At 56.9 in February, from a revised reading of 56.6
in January, the seasonally adjusted Markit/CIPS
purchasing manager’s index (PMI) ticked higher
and signalled improved operating conditions for the
eleventh straight month.
The strengthening domestic market remained the
primary driver of the manufacturing recovery,
underpinning an eleventh successive monthly rise
in production volumes. Companies also linked
higher output to promotional activity, new product
launches and investment in new machinery.
FBD Holdings, the Irish insurance group, today reported profit before
taxation of €51.5m in 2013, down €800,000 on its 2012 outturn.
FBD said its capital base has improved with its solvency lever standing at 78.1%
compared to 73.8% in the previous results.
FBD Holdings FY13 results in line with guided range: Eamonn Hughes of
Goodbody commented - - "FBD has reported FY13 operating EPS of 136c, in line
with the 135-140c guided range in an RNS in early January (Goodbody 138c).
Operating profit was €52.7m (-19% yoy, but 1% ahead of expectations), with
Insurance at €46.3m (-23% yoy and compared with our €46.9m forecast) and
non-underwriting activities at €6.4m (vs. our forecast of €5.4m). Expenses were
2% higher than anticipated though was largely made up on higher than expected
investment income. The dividend increase of 16% to 49c was ahead of estimates of
47.7c. The dividend brings the pay-out ratio up to 36%, compared with 25% in
FY12. FBD is reiterating its medium term dividend pay-out target of 40-50%. NAV
p/s at 823c was up 14% yoy and compares to our 815c estimate.
FBD has indicated that whilst the February wind storms will not exceed its
budget for catastrophic weather events, persistent bad weather in January will
lead to an increase in the cost of claims. In addition, increased economic
activity will lead to a higher frequency of claims ahead of this being reflected
in premiums, impacting short term profits in 2014 and early 2015. As such, FBD
is initially guiding FY14 operating EPS in the range of 120-130 cent (Goodbody
154c). We will pare our estimates back to these levels, though the impact on NAV
will be more muted."
Conall Mac Coille, chief economist at Davy, commented - - "The key
macroeconomic data today are manufacturing PMIs for Europe and the UK, and also
the US ISM manufacturing survey. Some commentators had attributed the sharp drop
in the ISM to 51.3 in January to poor weather conditions. However, the consensus
is only for a small rebound to 52.0 in February. However, political events will
also play a role. Stock index futures indicate losses in excess of 1% at the
European open, following developments in Ukraine over the weekend.
Data released on Friday show Irish mortgage approvals equal to €216m in January
2014, up 69% from the €128m recorded in January 2013. However, approvals were
especially weak in early 2013 following the rush to take advantage of expiring
mortgage interest reliefs at the end of 2012. Smoothing through the volatility,
on a three-month basis, approvals are up 16.0% on the year, suggesting a more
modest pace of growth. However, on an annualised basis, approvals were €2.7bn in
January, below the €3.2bn recorded in calendar year 2013. So Friday's stronger
mortgage approvals data provide only tentative evidence that Irish mortgage
lending may pick up this year, after the disappointing 5.3% fall to €2.5bn
recorded in 2013.
In contrast, this morning's Irish manufacturing PMI was 52.9 in February, up
from 52.8 in January. This is the ninth consecutive reading above the 50
no-change level. Employment in the sector also expanded for the ninth
consecutive month. Rising new business from the UK and European markets was
reported as driving an eighth successive rise in new orders. Overall, today’s
survey reinforces our view that output in the Irish traditional manufacturing
sector continues to recover – broadly in tandem with the euro area – but with
headline industrial output figures held back by multinational companies in the
Economic View: Fast track NAMA wind-down increasingly likely;
O'Leary of Goodbody said -- "NAMA Chairman Frank Daly failed to dampen
speculation of an earlier than expected wind-down of the institution when he
gave a speech on Friday. He said that the Board was “actively considering” that
possibility, but the actions of the agency of late suggest that an early
wind-down is more likely than not.
Firstly, NAMA is to redeem €3bn of NAMA senior bonds this week and expects to
have redeemed €15bn (50%) of the total by the end of the year. Secondly, NAMA is
clearly accelerating its asset disposals. In the speech on Friday, Frank Daly
stated that NAMA plans to sell packaged property portfolios, with a minimum
value of €250m, at rate of one per quarter in 2014. This is in addition to the
€1.5bn in property assets that are currently for sale and in addition to loan
portfolios which will be offered to the market this year. Thirdly, earlier
expectations of a large transfer of assets from the IBRC liquidation do not seem
likely at this stage. Fourthly, NAMA has begun to pay coupons on its
subordinated debt for the first time. Fifthly, Minister Noonan has asked for the
possibility of an early wind-down to be examined.
Given the improvement in market conditions, some may question why NAMA would
not hold on to achieve higher prices for the assets in the future. However,
while state involvement was required at the start of the crisis, governments are
not, in general, the right entity to be managing property. Moreover, a removal
of the contingent liability of NAMA would be a positive for the sovereign."
US benchmark updates
Asia Pacific Index lost 0.7% Monday.
Japan's Nikkei 225 fell
1.27%; China's Shanghai Composite rose 0.92%; South Korea's KOSPI dropped
0.77%; Australia's S&P/ASX 200 slid 0.38% and in Mumbai, the Bombay Stock
Exchange the S&P BSE India Sensex Index slipped 0.88%.
In Europe, the Dow
Jones Stoxx Europe 600 is down
2.04% in early afternoon trading Monday.
In Dublin, the
ISEQ has slid 1.70%
Ireland is off 4.88% and FBD slipped 3.80%.
Irish Share Prices
AIB Daily Report
Bank of Ireland Daily Report
The euro is
trading at $1.3774 and at £0.8234.
For live currency updates, check the
right-hand column of the Finfacts
The US dollar
fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.
Dry Index, a
measure of shipping costs for dry commodities, hit
an all-time high of 11,771 on May 21, 2008. From
that time it reversed and on the 5th of December, 2008 it hit a low of 663 - -
close to a 1986 low.
July 15, 2010, the index fell for the 35th straight session, by 9 points, or
3.11%, to 1,619 points, Bloomberg
On Friday in
London the BDI closed up 11 points or 0.95% to 1,175.
rose by 220% in 2013 to 2,237.
Global rebalancing — the tanker
Crude oil for April 2014 delivery is trading on the Chicago
York Mercantile Exchange (CME/Nymex) at
$104.03 up $1.70 from Friday's close. In London, Brent for April 2014
delivery is trading on the International
Commodities Exchange at $111.45. The
North 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 falls.
The spot price of an oz of gold is trading on the CME
in Chicago at $1,344.80 up $23.40 from Friday's closing - - the
gold price fell 28% in 2013, the biggest annual plunge since 1981.
Gold had hit a
record high of $1,921.15 a troy ounce on Sept 06, 2011.
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