STRESS TESTS RESULTS KEY FOR INTERNATIONAL CREDITABILITY - Stress levels in the Irish banking sector are building to a crescendo this week. On Thursday we will get sight of the report carried out by teams of consultants at the direction of the Central Bank on the books of AIB, Bank of Ireland, EBS and Irish Life and Permanent. That should then provide us with a final number on the amount of fresh capital and funding required to fix the Irish banking sector. Figures being talked about by the banking analysts here, including Davy which produced a research report on this last week, are in the region of €25-27 billion.
Peter Brown, managing director of the Irish Institute of Financial Trading, says that on Thursday he wants to see the assumptions used in the stress tests. He says growth rates, the threat of increasing interest rates and falling property prices are all issues which will continue to cause concern for the industry. He says the results of the stress tests need to be right, but he adds that he remains very sceptical that they will be correct. He says he is not sure the figures being touted about this week are correct as the issue of impaired mortgage books and whether mortgage arrears will be paid back or not all have to be examined.
Mr Brown says that all eyes of Europe will be focused on Ireland on Thursday as well as the big institutional investors and bondholders. He adds that if the euro zone debt contagion continues, Spain is the next problem country.
***
MORNING BRIEFS - Cement company Readymix, which is based in Ireland and quoted on the Irish Stock Exchange but majority owned by the Mexican firm Cemex, says talks that it had held with an unnamed potential suitor have not resulted in a takeover bid. This follows last October's announcement that the company had been approached by third parties and was entering talks.
*** Technology company HP, one of the country's largest multinational employers, is to expand its StorageWorks operation in Belfast with an as yet unspecified number of jobs to be created. HP describes StorageWorks as a global centre of software engineering excellence to develop products based on its cloud computing software platform. Cloud computing involves both businesses and individuals making use of software and services provided over the internet rather than being stored on their own PCs or laptops.
*** GE - the company once known as General Electric - is apparently going back to its roots in the electricity sector and is recruiting 20 engineers and IT staff this year for its Irish energy business. Those new staff will be working on technology to maintain and improve electricity grids. GE operates two power plants in Ireland - the Tynagh plant in Galway in which it is also a shareholder and the Whitewater plant in Cork which it operates under contract for Bord Gáis.
*** Irish manufacturers are feeling more positive than they have at any time since January 2007. That is according to a survey of the sector carried out by accounting firm KPMG. KPMG does this exercise at four monthly intervals and tells us that the number of manufacturers expecting to add jobs in the next 12 months outnumbers those expecting employment in the sector to remain steady or fall by nine percentage points. A large majority of those surveyed also expect both revenues and new orders to increase this year.
*** On the currency markets, the euro is worth $1.4050 and 87.8 pence sterling.
