BARRY GROUP PERFORMS AHEAD OF THE MARKET - The Barry Group, one of the country's biggest wholesale distribution companies, says its group pre-tax profits rose by 12% last year to €3m. The group supplies over 700 shops around the country, including those operating under the Costcutter, Carry Out, Buy Lo and Quik Pick chains. But the company blamed slower revenues on lower consumer spending.
The company's managing director, Jim Barry, says that 2009 was a difficult year for the retail business in Ireland and he predicts that this year will be just as tough, if not tougher. However, he says that the Barry Group traded ahead of the market due to how it reinvented itself to deal with the tough environment.
***
WARNING ON SENSITIVE MORTGAGE MARKET HERE - New research shows that Irish mortgage holders are uniquely vulnerable to rising interest rates compared to many of their EU counterparts, because of the prevalence of variable rate mortgages. The Irish Mortgage Corporation says that an over-reliance on variable rate mortgages, and a lack of rate caps means customers have little protection against rising mortgage costs and little time to adjust their household budgets to higher monthly payments. According to the regulator's latest figures, 32,000 mortgage holders are now more than 90 days in arrears on their mortgage payments. The mortgage corporation says though that the debt problem is much bigger when 30 and 90 days arrears are taken into consideration, along with borrowers who have renegotiated terms with their lenders. All lenders in the Irish market have increased their mortgage rates where possible over the past year, as troubled Irish and international banks find it harder to source funds for themselves. They have also been trying to get people off low-interest-rate tracker mortgages. Yesterday the Financial Services Ombudsman criticised lenders for for making "unwarranted and unsolicited" moves to entice borrowers off low-rate tracker mortgages.
Frank Conway of the Irish Mortgage Corporation says that traditionally a higher percentage of Irish people have gone for variable or 'super variable' rate mortgages rather than longer term fixed ones. He defines 'super variable' as one or two year fixed products. He says there has never been a competitive long fixed rate product developed here, although most institutions offer 10 year fixed mortgages. But this compares to terms of 30 years in the US. Mr Conway says that caps on variable rate mortgages could be introduced in an effort to protect mortgage holders and allow them to adjust their household budgets when rates increased. Looking ahead to when the European Central Bank starts to increase its rates again, Mr Conway says that the market will just be more difficult and the numbers in mortgage arrears will increase.
***
MORNING BRIEFS - The level of home ownership in the US has fallen to the lowest level since 1999, according to a government survey. The Census Bureau said the home ownership rate fell to 66.9% in the second three months of this year, down half a percentage point from the previous year.
*** Billionaire investor George Soros is in final talks to buy Dubai Holding's 4% stake in the Bombay Stock Exchange, as foreign investor interest in India's fast-growing financial markets rises. Soros Fund Management is planning to pay about $40m for its stake, valuing Asia's oldest stock exchange at about $1 billion. Individual foreign entities are allowed to own up to 5% in a local market, according to Indian domestic rules.
*** On the currency markets this morning, the euro is trading at $1.3009 cents and 83.41 pence sterling.
