Morning business news - August 12Tuesday 12 August 2014 10.49
The proportion of people who say they are saving money regularly rose from 35% to 41% in July, according to the Nationwide UK Ireland/ESRI Savings Index. Asked about how they would allocate any additional cash over and above their everyday needs 40% of Irish consumers said they would save it, down from 46% in June and 14% said they would spend it up from 13%.
Brendan Synnott, the managing director of Nationwide UK (Ireland), says the latest index shows a return to the normal long term level of saving among consumers - a reversal of the decline which started in late 2012. Mr Synnott says that Irish people always had the desire to save, but recent months has also seen a return of people's ability to save. The precautionary driver behind consumers' saving practices was very evident during the downturn, but now people are starting once again to save for a specific event or item - a positive sign for the economy, according to Mr Synnott. He also says it is "quite refreshing" to see people saving for an item or a holiday rather than borrowing in order to buy it.
The Nationwide UK (Ireland) boss says a normal saving ratio would be 40% of the population, but he adds that many consumers believe it is not a good time to save and that current Government policy is actually discouraging people to save between low interest rates on offer and increased DIRT levels. But he says that people will continue to save because they want a risk free return and they want to get back to a situation where they can have cash available to them when they need it.
MORNING BRIEFS - Amounts being staked by Irish gamblers in its betting shops fell 6.7% over the first half of the year according to interim results from UK bookmaker Ladbrokes. Its net revenue here was down 10.6% and operating profit was 60% lower at £2.5m. In a statement alongside those results, the company said that the competitive environment remains challenging in the Republic of Ireland.
*** A response is expected soon from fruit company Fyffes to the emergence of a significant obstacle between it and the $1 billion merger it has agreed with Chiquita. Fyffes shares fell 14% and Chiquita's surged yesterday as the US juice maker Cutrale and the Brazilian investment firm Safra offered $611m to buy Chiquita in cash provided it pulls out of the merger. That offer was a 29% premium to Chiquita's shares. However its stock closed 30% higher following news of the offer and are now valued at more than Cutrale and Safra were offering. That suggests investors feel Chiquita is very much in play and that Chiquita will attract a higher price either from Fyffes or the rival consortium.
*** Real Estate Investment Trust Hibernia has agreed a new €100m loan facility with Bank of Ireland Corporate Banking. In addition to €40m in funds committed by shareholders, that leaves Hibernia with €140m to invest in Irish property. Real Estate Investment Trusts are stock-market listed companies which allow their shareholders to invest in a portfolio of property in a tax-efficient manner.
*** France has retained its position as the world's top destination for tourists. Figures compiled by the French government and its Central Bank show the country attracted 84.7 million visitors last year. That was up 2% on its 2012 total and comfortably ahead of the US, which welcomed 69.8 million tourists last year and third-placed Spain which hosted 60.7 million. Portuguese, Greek and Irish tourists were the most smitten among visitors to France spending an average of 10.6 nights each. That was the longest average stay among those holidaying in the country.