RISING IRAN TENSIONS PUSH ENERGY INDEX SHARPLY HIGHER - A 9% increase in oil prices and a 20% increase in gas prices pushed the Bord Gáis Energy Index up 8% in February. The rise was because of a combination of rising geopolitical tensions, supply constraints, rising energy demand, a weaker US dollar and improving market confidence. This led to the price of a barrel of Brent oil hitting an all time record in euro terms during the month.
John Heffernan, energy trader at Bord Gáis, says that the rising tensions with Iran is continuing to unnerve the markets, while the growing demand for energy as key global economies continue to see a recovery, is also putting pressure on prices. He says that rising energy prices is now a major cause of concern for governments, with US President Barack Obama and the US Federal Reserve's chief Ben Bernanke recently warning of the dangers of rising oil prices.
The way Japan is generating its power is also having an impact on world energy prices. A year on from the earthquake, tsunami and the Fukoshima nuclear disaster, Japan has closed down nearly all of its nuclear energy plants and is now using natural gas to replace that nuclear power. Japan is competing for the same gas as European markets and is putting upward pressure on prices.
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MORNING BRIEFS - Bakery group Aryzta has said that group revenues for the six months to the end of January edged 0.9% higher to €1.91 billion, while group earnings rose by 3.3% to €178.8m. Revenues at its food division rose by 9.4% to €1.4 billion, with revenues in Europe up by 7.5%, while North America turnover rose by 9.6%. The group was formed in 2008 after IAWS bought Swiss firm Hiestand. Aryzta sells bread and pastries under brands like Delice de France and Cuisine de France in Europe.
*** A statement this morning from business services group Siteserv says it is in advanced discussions which may lead to a sale of all of its operating companies. Such a transaction, should it materialise it says, will require a vote of shareholders and that at this stage it's not possible to quantify the final financial impact of a deal. It says though that a sale is not expected to have any negative impact for staff, customers, key business relationships or suppliers. Weekend reports suggested Denis O'Brien was the front runner to buy the company.
*** According to the ISME Quarterly Bank Watch Survey, banks have not responded to increased demand for finance from small and medium enterprises. ISME says the number of firms looking for finance in the last three months has increased to 37% from 25% the same time last year. But, banks are still turning down one in every two applications, according to the survey. ISME said it was a "slight" improvement from the 52% refused finance in its previous survey. Nine out of 10 firms surveyed said the banks are making it more difficult to access finance. ISME chief executive Mark Fielding said the findings confirm the evidence of the recently published Central Bank report and the EU survey on access to finance in the euro area, which said Irish SMEs were second least successful, after Greece, in obtaining bank finance.
*** There has been a significant improvement in business confidence following a sharp decline at the end of last year, according to employers' group IBEC. Exporters in particular are confident about the outlook and 30% plan to hire staff in the next three months. IBEC's Business Sentiment Report said though that the domestic economy remains in paralysis and needs help to return to normal levels of trading.
*** On the currency markets the euro is trading at $1.31 and 83.6 pence sterling.
