OUTLOOK FOR IRISH EXPORTS BRIGHT - The Irish Exporters Association said yesterday that manufacturing exports grew rapidly in July, August and September, helped by a good euro exchange rate with the dollar. This morning, a report from Trinity and the Economic and Social Research Institute gives us more reasons to be optimistic. The report goes into the reasons why foreign firms are helping to boost the economy through their exports, and why in the medium term, the bulk of those firms are staying put.
Frank Barry, a lecturer at the business school at Trinity, says that while Irish exports have fallen in the last two years, the falls have been much less that those seen in other European countries. He adds that exports are strongly positive and that IT services and financial services along with pharmaceutical and medical devices are the best performers. But he adds that the weak sterling is a drag on exports and it is hitting indigenous export firms which are so reliant on the UK market.
Mr Barry says the switch of production from computer hardware to IT services has been very successful here and adds that the same switch in happening in the pharma sector as pharmaceutical and medical devices morph into biotechnology and gene-based therapies. On corporation tax, Mr Barry says he never really believed US President's Barack Obama's threat to make changes and says that the US focus on changes to tax havens in the Caribbean has actually benefited Ireland. Changes to banking secrecy laws have also been of benefit to Ireland, he adds.
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MORNING BRIEFS - A new executive chairman has been named at AIB replacing Dan O'Connor. The new appointee is David Hodgkinson, the former chief operating officer at HSBC. He has been hired to lead the bank through its current difficulties and manage the process of appointing a new chief executive. The process of hiring him was led by the National Treasury Management Agency, which oversees the bank rescue plan. Managing director Colm Doherty is to step down in coming weeks.
*** The first public Irish bank bonds to be sold since April were sold yesterday by Bank of Ireland. It sold €750m worth of two and a half year, government-guaranteed bonds amid strong demand that helped increase the sale from the original €500m. There was massive interest in the sale, and buyers of the bonds will be getting good returns in interest payments.
*** The Financial Times reports that Anglo Irish Bank faces a battle to impose a punitive settlement on its junior creditors, after a group of bondholders formed in a bid to block attempts to force a €2 billion debt exchange on creditors. The group of investors, represented by law firm Brown Rudnick and investment bank Houlihan Lokey, said they held enough bonds in one of the bank's 'lower tier-two notes' to block moves by the bank to force bondholders to accept a tender offer of that issue. The investors say they do not plan to participate in the tender and will vote against the extraordinary resolutions contained in it.
*** The Central Bank Governor, Professor Patrick Honohan, has said that EU rules on budget deficits were not able to signal the crisis in Ireland's public finances. Speaking to the Institute of Certified Public Accountants last night, he said Ireland had met all the targets set by the EU's Stability and Growth Pact before the dramatic collapse in tax revenue in 2008. He also said that as an indicator of the sustainability into the future of the public finances, the EU rules were not adequate. 'A country could run a surplus for years and yet the structure of its tax receipts and spending rules could leave it vulnerable to a sudden crippling turnaround in the deficit and a rapid accumulation of debt,' he said.
*** On the currency markets, the euro is trading at $1.3823 cents and 87.44 pence sterling.
