EXPORTERS TURN EAST - While the turmoil on the stock markets have been providing all the drama in recent weeks, Irish businesses have been more worried about a more serious trend. The euro has gained 20% on the dollar and 15% on sterling over the past 12 months. According to recent figures from the Central Statistics Office, more and more Irish companies are now turning to the emerging markets in Eastern Europe and Asia.
IBEC's head of trade and international relations is Pat Ivory. He predicts that 2008 will be a very tough year for Irish exporters, especially those with a high level of dependence on the US and UK markets. He says that about 18% of the country's exports go to the UK, with slightly less of that going to the US. When US and UK consumers slow their consumption, he says that Irish companies feel the effect.
He says that Irish companies - as advised by IBEC - have been broadening the markets where they are selling their products. One of the positives that came out of last week's CSO figures was the fact that new emerging markets are starting to have a real impact on Irish business, Mr Ivory states. He says that Irish goods exported to key emerging markets such as China, Russia, India, South Africa, Brazil and Mexico now account for over 21% of exports and are valued at over €3.6 billion. Mr Ivory says these new emerging markets offer Irish exporters an opportunity to spread the risk of currency exposure. They also have very high rates of growth - India and China would have GDP growth rates of 8-10%. The new markets within the EU also offer significant opportunities for Irish companies and are taking about €1.6 billion of Irish exports.
Mr Ivory also says that certain sectors that are exposed to currency risks, like the food sector, are reaching into the huge Asian markets. They have reached 2009 targets already and are already exporting €400m worth of food and drink exports to Asia.
MORNING BRIEFS - It seems that JP Morgan did not get its hands on Bear Stearns for the bargain basement price it first thought. The bank's first offer was roughly $2.50 a share - compared to the $57 each share was worth the day before the bank sought emergency funding. Last night JP Morgan raised its offer to $10 a share and struck a deal to buy almost 40% of the company. Some of the shareholders had been agitating for a better deal - among the most prominent being British billionaire Joseph Lewis. The new deal now values the investment bank at $2.4 billion.
*** The improved Bear Stearns offer helped sentiment on Wall Street, with the Dow Jones rising to its highest level in a month. Share prices in the US were also helped by new figures which showed that sales of existing homes there rose in February - the first time in seven months. Purchases increased by 2.9%. But the slump in prices continued with the average price of single-family homes falling 8.7% in the month - the most pronounced drop in four decades of record keeping.
*** It is reported this morning that HBOS is preparing to hand over to the British financial watchdog its account of what exactly it thinks happened last week. The Financial Services Authority is looking at unusual trading patterns as part of its investigation into possible stock manipulation. Shares in the bank fell as much as 17% last Wednesday when false rumours spread that it had sought emergency funding from the Bank of England.
*** It is expected that Ford will announce tomorrow that it has finally gotten rid of its troubled luxury brands Jaguar and Land Rover. Talks with the Indian car company Tata are said to have finished and its thought the deal could be worth around $2 billion to the US motor giant.