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Morning business news - May 28

TURBULENT SUMMER EXPECTED ON EUROPEAN STOCK MARKETS - Further details of how Madrid will effect a €19 billion bail-out of Spain's fourth largest bank Bankia are expected later today. Spain's economy minister Luis De Guindos, who not too long ago told the Spanish people no more of their money would be used to bail out banks, is expected to structure the deal so that Spanish government debt is transferred to Bankia. That would allow Bankia to deposit the government debt with the ECB in return for cash and save Spain having to borrow the €19 billion immediately at very high interest rates.

The Spanish banks are just one of the issues weighing on investment markets at present. Over €3 trillion has been wiped off the value of global shares this past month. The euro itself under pressure too.

Paul Sommerville, founder of Sommerville Advisory Markets, says this summer is expected to be just as turbulent as last year on the stock markets. However, markets are expected to open higher in Europe today and the euro is set to strengthen against the dollar as US markets are closed for Memorial Day. He says that there is a record amount of bets in the market against the euro at the moment - this is a sure reverse indicator and so the euro will gain in strength over the next few months. Mr Sommerville also points out that a weak euro is in some ways good for Ireland, adding that it is 13% cheaper for US visitors to come here this year than it was last year.

The analyst says that the smart investor should be trimming his or her portfolio at the moment. He points out that last week economic sentiment indicators from the US and Germany were all very positive, but that markets were still down. He also says that his firm will stay away from the Irish shares as the Irish market is just too small.

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MORNING BRIEFS - Limerick based software company Action Point Technology is expanding. Having focussed until recently on the Irish market the company, which helps other firms develop software they need to help run their own businesses, has been growing sales to the UK. As a result of its success to date it anticipates an 84% growth in turnover to over €3m this year and is hiring new staff. The expectation is that Action Point will create 50 new jobs between now and 2014.

*** Irish tech company Newry-based First Derivatives has results this morning which show that its full year pre-tax profit rose by 25% to £7.3m sterling. First Derivatives sells software and consulting services to large financial institutions to help them manage risk. Obviously that is the kind of thing big banks are very much interested in these days as demonstrated by a 25% rise in revenues for First Derivatives to £46m.