FYFFES' CHIEF IN US TO PETITION OVER MERGER - David McCann, the executive chairman of the banana distributor Fyffes, travelled to the US this week to appeal directly to major Chiquita shareholders to stick with its proposed $1 billion merger with his company, in the face of pressure to switch to a rival all-cash bid from two Brazillian billionaires. Mr McCann in recent days met with several large institutional shareholders of Chiquita, in an effort to convince them that the merger would be a better long-term bet for the US company than the rival cash bid from companies associated with Joseph Safra and José Luis Cutrale. Fyffes declined to comment when asked about Mr McCann’s trip to the US or to identify the shareholder groups with whom he met, says the Irish Times. Chiquita, whose shareholders must choose next month between the merger to create ChiquitaFyffes and a $13-a-share bid from the Cutrale-Safra groups, is co-owned by some of the biggest institutional investors on Wall Street. According to regulatory filings, Chiquita’s biggest shareholders include Dimensional Fund Advisors, which own 8.5% of its stock; Vanguard Group, which owns 5.7%; and JP Morgan Chase, which owns 5.4%.
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IRISH GOVERNMENT'S COST OF SHORT TERM DEBT FALLS TO ZERO - Irish Government borrowing costs have dropped to nothing. The National Treasury Management Agency has borrowed €500m on the markets at a yield, or return for investors, of nothing. Free money looks like a good deal for the government, but the fact that investors are accepting miserably low returns is a sign of the weakness in the euro area economy, and the fact that bondholders see little or no prospect of inflation over the next three months, writes the Irish Independent. The State was never expected to pay much in the latest of a regular series of short term financing deals yesterday, but the ability to borrow direct from the market at a yield of zero was a surprise. The deal means investors are prepared to give up any return in order to park cash, according to Fiona Hayes of Cantor Fitzgerald. The zero investment return is better than actually losing money by holding bonds, as investors in the likes of Germany are now doing. "Negative yields have been the norm for some so-called "core" borrower countries in recent weeks. That raises the question of where to invest," Ms Hayes said.
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RICH IRISH ‘DON'T DIVERSIFY ASSETS’ - Wealthy Irish people have the least diversified portfolio of assets than their counterparts in any of the other 17 countries surveyed as part of Barclay’s Wealth Insights report. The study shows that just 36% of this country’s “high net worth individuals” (HNWIs) - comprised of entrepreneurs, business leaders and investors - are invested in a geographically diverse portfolio, according to the Irish Examiner. Similarly, Irish respondents to the survey indicated a far greater preference for holding their wealth in domestic banks and assets, with just 30% opting for external financial institutions, as opposed to a European average of 50%. Commenting on the results, Barclays Ireland head of wealth and investment management, Pat McCormack said the findings are in line with previous research that showed an inclination on behalf of Irish investors to keep much of their wealth in domestic property. “We continue to encourage investors to review their portfolio regularly to ensure they are balanced and consistently match their goals. It is interesting to see that Irish investors are less geographically diversified than their EU peers but not surprising as we know from previous research that Irish HNWIs continue to hold a very high proportion of their wealth in property," he said.
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DRAGHI'S ATTEMPT TO JUMP START STUTTERING EURO ZONE FALLS FLAT - Mario Draghi’s latest attempt to stave off economic stagnation in the euro zone had a faltering start on Thursday when demand for the European Central Bank’s first offer of cheap four-year loans fell far short of expectations. The low take-up of the loans piles pressure on the ECB to consider more radical measures such as quantitative easing, though the idea continues to face resistance in Germany, Europe’s largest economy, reports the Financial Times. Europe’s banks borrowed €82.6 billion through the first of the ECB’s Targeted Longer-Term Refinancing Operations, or TLTROs, out of a possible €400 billion, much less than analysts had forecast. That dealt a blow to Mr Draghi’s ambitions to expand the ECB’s balance sheet by up to €1 trillion, in order to boost lending to smaller businesses in the region and counter low inflation. Inflation, at 0.4%, remains well below the ECB’s target of just under 2%. Meanwhile, investors continue to doubt policy makers’ ability to keep prices on track, with an important measure of longer-term inflation expectations falling on Thursday. The average eurozone inflation rate expected over the five years that start in five years’ time fell to 1.93% on Thursday, according to calculations by Barclays.
