About 1,000 staff at Bord Gáis Éireann (Bord
Gáis), the State-owned energy company, are to share a €54m tax-free bonanza following
the winding up of an employee share ownership scheme.
The stake of 3.27% was available to staff who
were with the company in the period 2005-2009.
Payouts will average €54,000 each over 5 years,
with some getting as much as €66,000.
The employee share ownership plan (ESOP) was
agreed by a Bertie Ahern-led government in 2005 as part of a productivity deal
agreed with unions, which it is claimed produced savings between 2005 and 2009
The wind-up of the employee share ownership plan
(ESOP) is required as part of the process of restructuring Bord Gáis to allow
for the sale of the energy business to Centrica and the establishment of
Finfacts:Eircom staff earned €1bn tax-free; Dead golden goose has had 6
owners since 1999
The National Treasury Management Agency
(NTMA) today completed an auction of Irish Treasury
Bills, selling the target amount of €500 million.
Total bids received amounted to €1.902bn which was 3.8 times the amount on
offer. The Treasury Bills, which have a maturity of three months, were sold at
an annualised1 yield of 0.20%.
Conall Mac Coille, chief economist at
Davy, comments on the Fed's policy meeting - - "The
Fed’s new forecasts, released yesterday, expect policy rates to increase to 1%
by the end of 2015, and to 2.25% by the end of 2016. This is 50bps higher than
the Fed had previously predicted. The Fed also tapered its monthly asset
purchases by another $10bn, to $55bn.
With the unemployment rate expected to fall to 6.2% by the end of 2014, the Fed
dropped its 6.5% threshold level, a pre-condition for rate rises. The FOMC’s
statement indicated that rates will remain near zero “for a considerable time
after the asset purchases programme ends”. At her press conference, Fed Chair
Janet Yellen said that a six-month gap would occur before rates rise. If the Fed
continues to taper at a $10bn pace, asset purchases should end by mid-2014,
suggesting that the first rate rise will occur in early 2015.
In the UK, Chancellor George Osborne’s budget for 2014 was broadly neutral.
Lower-than-expected spending by government departments in 2013 was locked into
expenditure plans for 2014, allowing some modest room for tax cuts. The income
tax threshold will now rise by £500 to £10,500, and there was also a small
increase in the threshold for the higher 40% income tax rate. The Budget also
contained modest measures to encourage UK export growth and business investment.
But the most eye-catching news was measures aimed at savers, specifically
eliminating restrictions on contributory pensions, including requirements to buy
annuities with pension pots.
Overall, Chancellor Osborne resisted the temptation to engage in a budget
giveaway ahead of the election in 2015. But doubts remain whether he can cut
back government spending from 43.5% of GDP in 2013 to 37.8% of GDP in 2018,
whilst ring-fencing education and health from cutbacks. Furthermore, the OBR’s
forecast for the budget deficit of 5.5% of GDP in 2014 still looks conservative,
and based on 2.7% GDP growth, below our forecast of 3.3% and the Bank of England
at 3.4%. Should growth and public finances continue to beat the OBR’s
projections, political pressure for a budget giveaway ahead of the 2015 election
will surely grow."
Economic View 1: UK budget has one eye
on 2015 election; Juliet Tennent, economist at
Goodbody, comments - - "As expected the Office of Budgetary Responsibility (OBR)
raised its GDP forecasts from 2.4% to 2.7% for 2014 and from 2.2% to 2.3% for
2015 for the UK economy. This underlines the OBR’s reduction in both the deficit
and debt forecasts for the UK over the same timeframe.
The deficit is now expected to be 5.5% in 2014 and 4.2% in 2015 from 5.6% and
4.4% respectively. The debt/GDP level is still forecast to peak in 2015 but at
the lower level of 93.1% (was 94.7%).
A 3% increase in the minimum wage, confirmed in yesterday’s budget and due to
take effect in October, is the first such real increase since 2007 and sets a
benchmark for private sector wage increases, which only managed to increase by
c.1% in 2013. There were also additional measures announced to ease the tax
burden on consumers which will take effect in 2015.
The better fiscal picture is being driven by an improvement in economic growth
as opposed to structural changes and Chancellor Osborne confirmed that the
government remains committed to austerity. However, additional austerity looks
like it will not be an issue ahead of the 2015 election."
Economic View 2: FOMC raises
expectations for rate increases; Juliet Tennent added
-- "The US FOMC created a bit of a stir yesterday with both its statement and
its press conference. As expected the FOMC reduced QE by a further $10bn to
$55bn, and also as expected the 6.5% unemployment rate was dropped as the key
forward guidance indicator. Instead, a more “balanced approach” approach
incorporating maximum employment and 2% inflation will be taken. What wasn’t
expected were the more hawkish interest rate forecasts from some of the members
of the FOMC. The median of these sees Fed Funds at 1% at the end of 2015, versus
0.75% previously, which implies that interest rates will have to start
increasing in mid-2015. The suggestion from the new Chair, Janet Yellan, that
the gap between the end of tapering and interest rate rises would be around 6
months, also raised the spectre of earlier interest rate rises, although Ms.
Yellan did stress that policy is not pre-set.
While the forecasts for the US economy were
revised down modestly for 2014 (from 3.1% to 2.9%), the FOMC see risks to the
economy and labour market as broadly balanced and yesterday’s revised interest
rate forecasts have increased the likelihood of earlier rate rises in the US."
In New York Thursday, the Dow
rose 31 points or 0.19% to 16,263.
Both the S&P 500 added 0.23%
and the Nasdaq advanced by 0.21%
US benchmark updates
Asia Pacific Index sank 2.1% Thursday.
Japan's Nikkei 225 dropped 1.65%; China's Shanghai Composite
declined 1.40%; South Korea's KOSPI fell
0.94%; Australia's S&P/ASX 200 dipped 1.15% and in Mumbai, the Bombay Stock
Exchange the S&P BSE India Sensex Index slid 0.42%.
In Europe, the Dow
Jones Stoxx Europe 600 is off
0.41% in mid afternoon trading Thursday.
In Dublin, the ISEQ has slid
Ryanair is off 0.50% -- the
airline today announced 7 new routes from Dublin - - to Basel, Bucharest,
Cologne, Lisbon, Marrakesh, Nice and Prague. The airline also added more flights
on 21 business routes as it grows to over 1,000 flights per week.
Irish Share Prices
AIB Daily Report
Bank of Ireland Daily Report
The euro is trading at
$1.3767 and at £0.8347.
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.
On Thursday, July 15, 2010,
the index fell for the 35th straight session, by 9 points, or 3.11%, to 1,619
On Wednesday in London the BDI
closed up 52 points or 3.43% to 1,570.
rose by 220% in 2013 to 2,237.
rebalancing — the tanker
Crude oil for
April 2014 delivery is trading on the Chicago
York Mercantile Exchange (CME/Nymex) at
$100.24 down 13 cents from Wednesday's close. In London, Brent for April 2014 delivery
is trading on the International
Commodities Exchange at $106.01. 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 $1,329.90 down
$11.40 from Wednesday'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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