TWO BIG BANKS WARN OF CONSEQUENCES OF NOT TAKING PART IN NAMA - Both Bank of Ireland and AIB have announced extraordinary general meetings of shareholders to get approval for participation in the NAMA process. The two banks account for more than €40 billion of the €77 billion of loans heading to NAMA. Both banks are still speaking to some extent in the dark as the fine details have yet to be worked out. Both lenders also warn of the prospect of nationalisation if they do not vote in favour of NAMA.
The head of research at Dolmen stockbrokers, Oliver Gilvarry, says it is significant that Bank of Ireland is giving a very different estimate of the NAMA 'haircut' or discount compared to what the bank had said in September. Bank of Ireland are now saying that the haircut will not be vastly different from the 30% level, whereas before it said it would be significantly less than 30% with analysts saying it could be as low as 19 or 20%. AIB are also not as confident that its haircut will be less than 30%. The analyst says this shows that the uncertainty surrounding NAMA is still there.
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UAE MARKETS SLUMP AFTER DUBAI WORLD SHOCK - Markets in Dubai and the Abu Dhabi have opened for the first time since state backed property development company asked for a six month break in repaying $59 billion of debts. The markets had been closed for the last four days as a result of a religious holiday and have not traded since before the news broke on Wednesday.
Jeremy Batstone, of Charles Stanley Securities in London, says that markets in the United Arab Emirates are down quite sharply this morning, as would have been expected. He describes the news coming out of Dubai as 'pretty awful' and says that property and banking stocks are seeing very significant falls as they are in the eye of this particular storm. He says that while further falls are expected, those falls will be limited. He notes that Asian markets, which fell very steeply on Friday, rebounded overnight. He says that investors fell that Dubai is a 'containable' situation.
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MORNING BRIEFS - Drinks group C&C has bought the UK cider assets of Constellation Brands for £45m. The assets of the business being acquired include a broad UK cider portfolio which includes the brands Blackthorn, Olde English and Gaymers. It also includes a cider production facility at in Somerset in England; and a distribution warehouse in Bristol.
*** Aryzta, the company which was formed last year out of the merger between IAWS and Swiss bakery group Hiestand, has said it sales totalled just under €730m in the first three months of its financial year, to the end of October - down 16% on the same time last year.
*** Origin Enterprises, the agribusiness which Aryzta owns just over 70%, has said that sales fell almost 24% in its first financial quarter to the end of October, compared to the same time last year.
*** On the currency markets, the euro is worth $1.5053 and 91 pence sterling.
