GHOSE PREDICTS PROPERTY PRICES TO RISE BY 7-10% THIS YEAR - This time 12 months ago, Pramit Ghose, managing partner at Bloxham Stockbrokers, came on the business news to tell us about his surprise list of market forecasts for 2009. Those predictions would not necessarily be shared by all members of the forecasting fraternity. In the interests of accountability, we have Pramit Ghose back to find out how his forecasts did and what he sees ahead for 2010.
Pramit Ghose says his main forecast for last year - that stock markets would bottom out by February and then have a very big rally - worked out. He says it is hard to remember just how bearish everyone was this time last year and he adds that world markets have rallied by 60% since early March. Mr Ghose's predictions for the US markets were bang on and he says that this was probably one of the best forecasts he had ever made. However, he admits his predictions for the Irish stock market were the wrong way round. He had said the Dublin market would rally in the fourth quarter, but the market actually rallied by 40% to the end of September and then fell by about 10% in the last three months of the year.
Looking ahead to 2010, Mr Ghose says that both prime residential and commercial property markets will turn around this year and produce a return of between 7-10% by the end of the year. He points out that property prices have fallen nearly 50% and there is some pent-up demand to purchase at these prices. He says that yields are very attractive and a number of commercial property funds in Ireland have just lifted their exit restrictions, which means that the amount of money going out has dried up.
The stockbroker says that the two major Irish banks will avoid nationalisation and will put in place a reasonably strong shareholder base for share price recovery over the next few years. He says that both AIB and Bank of Ireland share prices will exceed €3 again at some point this year.
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MORNING BRIEFS - NAMA chief executive Brendan McDonagh was talking tough yesterday, insisting that the agency would be taking a hard-nosed approach to developers. He said that developers could either repay their outstanding loans or face enforcement proceedings. Development loans valued at €19 billion will be transferred next month, and another €20 billion or so in loans are expected to be transferred by the end of April. Mr McDonagh also saying that initial valuations were showing that the average discount on the loans would be about 30%.
*** The country's economic recovery will depend on the ability of our companies to export more and figures released by the Irish Exporters Association say that although Irish exports performed strongly enough last year, 2009 was one of the worst years on record for traditional Irish manufacturers. Total exports of goods and services last year fell by just 1% to €154 billion, but this was helped by a 12% rise in pharmaceutical and chemical exports and a 4% increase in medical devices, mainly by multi-national companies based here.
*** Formula 1 tycoon Bernie Ecclestone is part of a bid to take over struggling Swedish car maker Saab, it emerged today. The billionaire has teamed up with the Luxembourg-based investment company Genii Capital, which recently invested in Renault's racing team.
*** The Revenue Commissioners collected a total of €114.35m as part of its special investigations including probes into illegal offshore assets and interest reporting during 2009. During the year it obtained a total of 10 prosecutions for serious evasion, six for tax and four for customs. 126 cases are either being investigated or being considered by the Director of Public Prosecutions.
*** The Toyota Prius, the petrol-electric hybrid, was the best-selling car in Japan in 2009 by a long stretch, with over 208,000 of them sold, over 50,000 ahead of the non-hybrid Fit from Honda.
*** Recruitment firm Office Angels has come with its new list of office jargon. Local authorities trying to cope with the snow and ice and sub zero temperatures may appreciate this new verb - stressurised - a combination of stressed and pressurised.
*** On the currency markets, the euro is worth $1.43 and 89.7 pence sterling.
