Morning business news - January 23Thursday 23 January 2014 11.15
Spain's financial sector programme has ended. It saw €100 billion being made available to the country to help deal with problems in its banking sector. Spain followed Ireland out of its bailout programme without a precautionary credit line and yesterday sold €10 billion worth of 10-year bonds at a yield of 3.8%. European Commission vice president Olli Rehn said that the Spanish programme had worked, saying the country's financial markets have stabilised, banks have increased liquidity, their solvency position remains comfortable, deposits have been rising and access to funding markets has been improving.
Joe Haslam, of the IE Business School in Madrid, says that leaving the bank bailout programme is not really big news in Spain and the public there treating it like "changing mortgage providers". But he says the programme was damaging politically as it cost the taxpayer and raised Spain's debt to GDP ratio to over 90%. He says Spaniards are more concerned about the stubbornly high rates of unemployment in the country, with the rate of jobless now over 26% compared to rates of just over 7% in the UK. Property prices are still falling in Spain and while the economy got a seasonal boost from the once again growing tourism sector, Mr Haslam says that the economy remains in focus. He says the fact that Spain is once able to borrow on the international markets is more down to the "Draghi factor" than anything the government has achieved. Mr Draghi promised last year to do "whatever it takes" to save the euro, and that brought borrowing costs for stressed countries lower.
MORNING BRIEFS - Following Emirates' announcement a couple of weeks ago, Etihad Airways has now announced it will operate two flights a day between Dublin and Abu Dhabi - that is nearly 9,000 seats a week. This will take passengers away from Frankfurt, Amsterdam and Heathrow airports, and mean they will be able to fly from Dublin, to the United Arab Emirates, and onwards to 45 destinations in Middle East, Africa and Asia.
*** British low-cost airline EasyJet has said that first half losses will be higher this year than last year because of the timing of Easter.
*** Activist investor Carl Icahn has called on the online auction site eBay to spin off its payments business, PayPal. Both eBay and PayPal have operations here in Ireland, with a combined staff of close to 2,000. Carl Icahn made the proposal after disclosing he had bought a 0.8% stake in the firm. He has also nominated two of his employees to join eBay's board. The firm said it routinely reviews its strategy and has explored "in depth" a spin-off or separation of PayPal , and that it does not believe that breaking up the firm is the best way to "maximize shareholder value". Ebay said PayPal is able to leverage the company's technology capabilities, commerce platforms and relationships with retailers, brands and large merchants worldwide. The firm's shares rose as much as 12% in after hours trading after Mr Icahn's proposal.
*** Shares at Netflix rose by about 16% at one point when it said it added four million new users in the last three months of 2013 to give it 44 million viewers, nearly 11 million of which are outside the US. The television and film streaming service, also reported a jump in net profits to $48m in the last quarter, from $8m for the same period a year ago. Netflix said 2.3 million new customers had joined in the US alone. Netflix has produced award winning shows like House of Cards, Orange is the New Black, Arrested Development and Hemlock Grove. It said that nine out of ten of its "international" customers, including Irish users, are paid-up subscribers, so the free trial users are limited. It gave no figure for Ireland, but 300,000 would be conservative estimate.