Morning business news - August 22Thursday 22 August 2013 10.24
EAGERLY AWAITED FED MINUTES INCONCLUSIVE - The minutes of the Federal Reserve's latest monthly board meeting were published yesterday evening. These were eagerly awaited as investors were looking for any hints about when the Fed would begin "tapering" or reigning back on the $85 billion a month in bond purchases it is making from US banks. The minutes were pretty inconclusive. While they showed that the Fed did discuss slowing the asset purchase programme, there were no real clues as to when that might happen and whether it would be, as some investors fear, as early as September when the Fed holds its next monthly meeting.
Tom Petruno, a financial journalist in the US, says that markets instantly reacted when the Fed first suggested that it might begin to taper the bond purchases programme. He says that markets currently do not know that they want - they do not want to think that they are ''addicted'' to the easy money of the stimulus programme, but are very fearful about what will happen when the supply of money slows - and eventually stops. The journalist says there is ''real fear'' about what the Fed does or does not do in September. He predicts that even if the Fed says it will just reduce the programme from $85 billion to $75 billion, the markets would then start pricing in when the programme would go to zero dollars.
A further complication is the fact that US Fed chairman Ben Bernanke is due to leave the post in January. Mr Petruno says his successor will be left to ''clean up'' the current mess and it will be the new chairman who makes the decisions from next year no matter what happens in September. The ending - or even slowing - of the US programme is seeing money coming back from emerging markets to the US, and India's rupee has fallen to new lows against the dollar. Mr Petruno says that investors in the US are now talking about Europe as a new area of stability. ''Europe is the place to go now as the ECB seems dedicated to near 0% rates,'' he states.
MORNING BRIEFS - Book retailer WH Smith has issued a trading statement saying it will meet full year profit forecasts. In a trading update ahead of the publication of the firm's year results in October, the company highlighted a strong performance at its travel division. WH Smith operates outlets at train stations, motorway service stations and airports including Terminal 2 in Dublin Airport.
*** Support in Sport, a Sligo-based company that provides playing pitches to sports clubs including football teams Real Madrid and Barcelona, reported a 20% rise in profit to €3m last year. Accounts just filed by the company show revenue rose 13% to €32m. The growth was driven by new business wins across Europe and in the Middle East. Support in Sport recently completed a project to provide a synthetic turf pitch for English Premiership rugby team Saracens in London. It is the first artificial surface to be used in the Aviva Premiership.
*** Apple is losing market share in China. The company shipped just under 1.5 million iPad tablet computers in China over the second quarter of the year which would account for 28% of the market in the country. That is down from the 49% market share it enjoyed at the same point a year ago according to figures from research firm IDC. Samsung, by contrast, was a big gainer. The South Korean company doubled its share of the Chinese market to 11%.