|Vladimir Putin, Russian president, announces that Crimea is to join the Russian Federation, March 18, 2014.
Markets news on stocks, currencies and
commodities: SuperValu is second-biggest Irish retailer; Aldi and Lidl
The latest supermarket share figures from Kantar
Worldpanel in Ireland, published today for the 12 weeks ending 2 March, show
that SuperValu has become Ireland’s second largest grocer following the
rebrand of Superquinn’s stores on 13 February.
David Berry, commercial director at Kantar Worldpanel, said: “Bringing 24
Superquinn stores under the SuperValu banner has enhanced the retailer’s
position as a major player in the grocery market. SuperValu now accounts for
25.3% of Irish shoppers’ grocery market spend, just 1.1 percentage points behind
Tesco. Its sales have remained broadly in line with the market, which shows that
it has been able to retain its market share while acquiring assets. Now, the
main challenge for SuperValu is to convince previously loyal Superquinn shoppers
of the merits of the SuperValu brand, and ultimately hold onto their custom."
Dunnes Stores saw its share fall 4.7% to
Despite the overall grocery market declining for the fifth successive month,
Aldi and Lidl continue to impress. Both retailers are delivering double digit
sales growth, and have increased their market shares by 1.4 and 0.8 percentage
points respectively. Over the past three years Aldi and Lidl have captured a
combined 3.8 share points from the competition, and have grown sales by 37%
in an overall grocery market which has grown by just 1%. Conversely, Tesco
and Dunnes have both experienced declines in market share and actual sales as
the result of the pressure exerted by the increasingly competitive market place.
February saw the grocery market’s weakest performance since September 2011, with
sales declining by 0.6%. Falling inflation has played a significant part in this
as vegetables and bread, two important staple items, are now cheaper than they
were last year.
Grocery inflation stands at 1.7% for the 12 week period ending 2 March 2014,
down from 2.9% last period and the lowest level since April 2012.
The inflation figure is based on over 30,000 identical products compared
year-on-year in the proportions purchased by Irish shoppers and therefore
represents the most authoritative figure currently available. It is a ‘pure’
inflation measure in that shopping behaviour is held constant between the two
comparison periods – shoppers are likely to achieve a lower personal inflation
rate if they trade down or seek out more offers.
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UTV Media FY13 in line and positive trends in current trading: Gavin Kelleher of
Goodbody comments -- "Group revenue of £107.8m, was -4% yoy and in line with our
£107.9m forecast (adjusted for disc. ops). Operating profit came in at £19.9m versus our £20.1m forecast
(adjusted for disc. ops). H2 saw improving trends with revenue +3% yoy and operating profit +10% yoy
(H1: revenue -11%, operating profit -36%).
In Radio GB, revenue was -7% yoy to £50.5m which was impacted by tough comps
with no major sporting event last year. Divisional operating profit was £7.9m, in line
with our forecasts. Radio Ireland revenue was -0.8% yoy to £20.8m and operating profit
was £5.1m, in line. This division showed an improving revenue trend as it moved through the
year (H1: - 10%; H2: +9%).
Television revenue was in line with expectations at £31.9m, -2% yoy, and
operating profit was £7.4m. The statement noted that its Irish television business was +11% in
H2. In New Media (UTV Connect & Portals now within discontinued operations), revenue was
£4.6m and operating profit £2.3m.
Net debt came in at £49.1m, flat yoy and the group has declared a final
dividend of 5.25p, full year 7p, in line with our forecast.
Television revenue in Q1 is expected to be up +5% with Irish TV revenue +11%,
and in April TV revenues are expected to be up 10%. In Radio Ireland, there are clear signs
of a recovery as the group is guiding +9% on a local currency basis in Q1 and further
single-digit growth in April. In Radio GB, the group is guiding revenue +7% in Q1 (talkSPORT +12%)
and +17% in April (talkSPORT +25%) highlighting some of the benefit from the World Cup.
Management notes that as it sees growth in its core markets, it can look forward
to seeing the benefits of the operational gearing in its business model reflected in
Overall, the FY13 performance was as expected but the key takeaway for us was
the very encouraging trends being seen in current trading. We are unlikely to
make any significant changes to FY14 numbers following this morning’s results (except
for some mix changes). The performance in the year to date leaves us comfortable
with our numbers and a continuation of these trends would leave upward bias.
It’s worthwhile highlighting that our FY14 forecasts are inclusive of £3m in start-up
costs in UTV Ireland (underlying operating profit growth forecast is for c.16%
yoy ex this investment). We view this, along with the talkSPORT International business, as attractive long-term growth drivers for the group. We reiterate
Economic View: The FOMC’s communication challenge;
Dermot O'Leary, chief
economist at Goodbody, comments - - "While the changing of the guard at the
Federal Reserve has gone smoothly thus far, Janet Yellen faces her most important task over the next two days at her first FOMC
meeting as Chair. While recent data has indicated that the US economy has slowed somewhat,
it is unlikely to change the tapering path initiated by her predecessor. In this
regard, the announcement of a further $10bn reduction in asset purchases is expected.
More important though will be the communication of the Fed’s forward
guidance. Similar to the Bank of England, the FOMC will have to explain how they will maintain an accommodative monetary policy in light of a faster than expected reduction in
the unemployment rate. It is likely that a more qualitative approach will be used
that goes beyond the 6.5% unemployment rate threshold. Yellen will also have the
opportunity to lay out the Fed’s views on the scale of spare capacity in the US economy. Given the
uncertainty around the calculation of the size of the output gap this will not be an easy
After injecting record amounts of stimulus into the economy over recent
years, the task of removing this stimulus is not easy. Bernanke learned last year that communicating this policy runs the risk of a sharp increase in yields, with
knock-on implications in a wide range of markets. It is now Janet Yellen’s turn to face
the market scrutiny."
FBD Holdings: Government considering applying 1% levy to all insurance
policies; Eamonn Hughes of Goodbody says - - "Reports in this morning’s Irish
Independent indicate the Government is considering applying a levy on all insurance policies, to create a distress fund to assist c. 50,000
homes who are unable to buy flood cover. The proposed 1% charge would bring total levies on
home and motor insurance policies to 6%, following the 2% levy introduced in September
2011 to cover the losses at Quinn Insurance and the 3% Insurance levy introduced in
1982. At the crux of the issue, the Government maintains the insurance industry is not
sufficiently protecting those living in flood prone areas, in spite of significant amounts
being spent on flood defences in certain areas.
The introduction of the levy would be disappointing for the insurance
industry and its customers alike given the levies that are already in place. This does not
alter our positive view on FBD and we are unlikely to make any changes to forecasts at
this point, given the levy will affect all policies and insurance companies equally."
In New York Monday, the
Dow rose 182 points or 1.13% to 16,247.
Both the S&P 500 added
0.96% and the Nasdaq advanced by 0.81%
US benchmark updates
Asia Pacific Index gained 0.6% Tuesday.
Japan's Nikkei 225 climbed
0.94%; China's Shanghai Composite added 0.08%; South Korea's KOSPI advanced 0.66%;
Australia's S&P/ASX 200 rose 0.51% and in Mumbai, the Bombay Stock Exchange
the S&P BSE India Sensex Index climbed 0.10%.
In Europe, the Dow
Jones Stoxx Europe 600 is off
0.25% in early afternoon trading Tuesday.
In Dublin, the
ISEQ has slid 0.19%
Glanbia is off
1.06%; no movement in UTV Media shares.
Irish Share Prices
AIB Daily Report
Bank of Ireland Daily Report
The euro is
trading at $1.3908 and at £0.8376.
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 4 points or 0.27% to 1,481.
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
$98.12 up 4 cents from Monday's close. In London, Brent for April 2014 delivery
is trading on the International
Commodities Exchange at $106.35. 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 $1,362.70 down $10.20 from Monday'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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