EQUITIES FACE WORST QUARTER SINCE 2011 OVER FEARS FOR GLOBAL ECONOMY - US and global equities are heading for their worst quarterly performance since 2011, with investors rattled by China’s economic slowdown, uncertainty over Federal Reserve policy and growing pessimism about corporate earnings.
Adding to investors’ unease, the International Monetary Fund on Tuesday warned that corporate failures were likely to jump in the developing world, after a borrowing binge in the past decade. With an array of sectors slumping since the start of July, beyond those directly influenced by the rout in commodity prices, the global equity bull run of recent years is now facing a major challenge, writes the Financial Times. The S&P 500 has fallen 8.5%, the biggest decline since the third quarter of 2011. Previously high-flying sectors that led the market earlier this year, notably biotech and healthcare stocks, have fallen appreciably in recent weeks. “The question now is - are investors ready for the first down year since 2011 . . . and the worst year since the ‘bad days’ of 2008,” said Howard Silverblatt, analyst at S&P Dow Jones Indices. In turn, global stock markets are poised for their worst quarterly showing since 2011, shedding more than $10 trillion in value. The FTSE Emerging Index has tumbled more than 21% this quarter, its worst showing since 2011, and the fifth-worst quarter this millennium.
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UK, GERMAN FIRMS EYE DUBLIN RETAIL MOVES AFTER NAMA LOAN SALE - UK property company Hammerson and German financial services group Allianz expect to take between one and two years to formulate their plans to redevelop potential retail sites in Dublin’s city centre and Dundrum village. This follows confirmation of their joint purchase of Project Jewel from the National Asset Management Agency for €1.85 billion. The loans are connected with Irish property developer Joe O’Reilly and his company Chartered Land, and represented the biggest sale to date by NAMA. The portfolio includes the existing Dundrum Town Centre and a nearby development site in the village covering six acres. These loans are being jointly purchased by Hammerson and Allianz. Hammerson is also acquiring the loans connected with Chartered Land’s 50% shares in both the Ilac and Pavilions shopping centres in Dublin, and a five-acre city centre site bounded by O’Connell Street and Moore Street. This means that Hammerson will pay €1.23 billion of the overall cost with Allianz paying €620 million. “We will have a good understanding of what the potential site could be over the next one to two years,” Hammerson’s chief executive David Atkins told The Irish Times. “There’s no immediate hurry on those. The first stage is to really establish what’s appropriate. We are a long-term investor with very supportive shareholders, so it’s about getting this right not just the speed of execution. We can afford to take our time and bring forward the best developments," he added.
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PROVIDENCE LOOKS TO EXTEND DEBT FACILITY IF BARRYROE DEAL DRAGS ON - Irish exploration company Providence Resources is considering extending its debt facility in case it cannot secure a timely farm out of the potentially lucrative Barryroe oilfield. Announcing its half-year results yesterday, the oil and gas explorer said it is in discussions with its debt provider, US-based Melody Finance, regarding a "possible extension of the terms and maturity" of its debt facility. Providence agreed $24m in financing with Melody in June 2014. This was made up of two credit facilities, one for $20m and one for $4m. The $4m was repaid in June. The balance of the $20m is currently due to be repaid in May 2016, says the Irish Independent. Under the terms of the agreement made between the two companies, Providence is required to repay the $20m facility with the proceeds of the farm-out of the Barryroe oil and gas field. The company's half-year results show it had €15.6m of the facility outstanding as of the end of June, and also had €11.3m in cash and cash equivalents. Providence, which has an 80% stake in Barryroe, has been attempting to secure a farm-out partner to help fund the development of the field since its discovery in 2012.
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FOUR-STAR MOUNT WOLSELEY RESORT TO INCREASE PROFITS - The luxury four-star Mount Wolseley Hotel, Spa and Golf Resort is set to increase profitability “substantially” this year. That is according to new owners, Tetrarch Capital, which last year saved the Co Carlow business after investing €7.5m in the resort when taking it out of examinership. The business entered examinership in April 2014 with debts of €60m to a number of different financial institutions, with around €28m owed to Bank of Ireland alone, says the Irish Examiner. The purchase of the resort, which includes a golf course designed by Christy O’Connor Jnr, by Tetrarch Capital, backed by Smiles Dental founder, Emmet O’Neill, was completed in July of last year. New accounts just filed with the Companies Office by Mount Wolseley, Hotel, Golf & Country Club Ltd show that the firm’s accumulated losses increased by €282,947 last year. However, a Tetrarch Capital spokesman said, yesterday, that the firm recorded €1m in costs arising from the examinership and write-offs last year.
