FOREIGN INVESTORS LOOKING FOR VALUE - The Construction Industry Federation is holding a breakfast briefing today on the outlook for foreign investment into Ireland in 2010. Attending the briefing are representatives from the country's biggest law firms, property development companies, accountants, estate agents and banks. All of these benefited from the building boom and are now looking for the next big thing to get involved with.
Patrick Koucheravy, an economist with estate agents CB Richard Ellis, says that when it comes to 'selling' Ireland, his colleagues have quite a negative perception of the country, especially in the UK. He says it is a matter of putting the facts into some sort of context - the bad news can not be denied, but can be explained along with the positives in the country. He says there is no way of getting around what has happened in the past year and a half and people can't simply lie about it. He says that investors - with news coming through of renewed interest from Middle Eastern and German investors - are ultimately looking for value. He says that as yields have decreased significantly in recent months, there is good relative value out there. He says that up to this, international investors would have avoided Ireland due to the high costs here. He says that investors would also be tempted by the fact that the majority of the Irish stock is new. He says that while these investors are not spending much yet, he hopes that the second half of 2009 will see a bit of a pick-up.
Alan McQuaid, chief economist at Bloxham Stockbrokers, says he wants to hear from IDA Ireland today that the foreign perception of Ireland has improved in recent months. He says the economy has witnessed sharp wage cuts, especially in the private sector, and he adds that while the country's competitiveness position is not particularly great, it is going in the right direction. He says he would like to hear IDA Ireland saying that foreign investors are seeing potential in Ireland in the long run, despite the short term difficulties. He says he hopes the economic situation in 2010 will be better than this year's and from a stockbrokers' point of view, he wants to see foreign investors buying Irish shares and Government bonds. He points out that this week's Government Bond auction was again very successful, which does suggest that there is demand for Irish financial products.
Mr McQuaid says that issues such as NAMA and the outcome of the Lisbon Treaty vote will also be looked at very closely by international investors. He says that if the country rejected Lisbon again, it would probably give the wrong signal to overseas investors.
Neil Gibson, a partner at Ernst and Young, says that while the Irish economy has really suffered during this recession, there are many countries that would gladly now swap places with ireland as the recession has eroded the cost base.
'The collapse in finance, loss of confidence in what assets are worth; dampening domestic and world demand for goods and services that we export; and the squeeze in the public sector through much reduced revenues have been a triple whammy for Ireland,' he said.
He said the country needs to have a proposition for something that can only be done here, to separate us from the competition. He states that tax and education matter most to investors. The stability of the legal environment, labour skills, Ireland's physical location and a very good track record are also key factors as emerging economies become riskier.
