AER LINGUS DEAL HANGS ON HEATHROW - The future use of the Heathrow slots controlled by Aer Lingus remains the only big hurdle to the Government sanctioning a takeover by IAG, the Irish Independent understands.
IAG is still only offering a five-year guarantee on the use of the prized take-off and landing slots, as negotiations with the Coalition continue over a €1.4 billion bid for the airline. But that is not enough for the Government, which is thought to want a guarantee for as long as a 10 years. IAG regards a deal of this duration as commercially unviable. IAG chief Willie Walsh previously said he would only be prepared to offer a pledge that the slots would be used to exclusively serve Irish routes for a maximum of five years after a takeover of Aer Lingus. And it is understood that remains IAG's position. The Government has sought assurances in areas such as job losses at Aer Lingus following an IAG takeover; giving the Government a veto over the sale of the Heathrow slots; and the development of services at Cork and Shannon. A Government review group and IAG officials have spent weeks negotiating details of the planned acquisition. It's understood that most of the concerns - bar the use of slots - have been more or less ironed out by the two sides.
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IRELAND COULD ADD 5,000 JOBS IN FINTECH BY 2020, SAYS DELOITTE - Some 5,000 jobs could be created in Ireland in the “fintech” industry over the next five years, according to an analysis by professional services firm Deloitte. This would represent a doubling in employment in this burgeoning part of the IFSC and would “predominantly be driven by the projected spend on IT services by financial services firms in Ireland”, Deloitte said. “Many financial services firms are struggling with outdated legacy platforms and IT architectures that are hampering their ability to grow and innovate,” David Dalton, head of financial services at Deloitte Ireland, told The Irish Times. “While some financial services firms have been cautious about new fintech start-ups, particularly where they are disrupting traditional business models and competing for customers, we are increasingly seeing a symbiotic relationship developing, which is helping to address these legacy issues in financial services companies. “Our view is that the fintech and financial services industries are inter-related and mutually dependent. The connectivity between the two sectors needs to be significantly enhanced.” Fintech is a term for technology applied to financial services, usually to support back-office functions.
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GLOBAL FUND MANAGERS WARN OF A BOND BUBBLE - A growing number of professional investors are warning that bonds are overvalued as fears grow that a fixed income bubble will collapse in a disorderly sell-off. Four out of five fund managers said bonds were overvalued in a survey of 300 global managers by CFA UK. Corporate bonds are more overvalued than ever before, while government bonds are the most overvalued asset class, the group said says the Financial Times. The group, which represents 11,000 investment professionals, says their valuations index, which has been running for three years, is in effect flashing red over the high valuations of bonds. Brad Crombie, head of fixed income at Aberdeen Asset Management, said: “You only know you’re in a bubble when it pops. But this market could pop. There is more tension and anxiety over valuations than for a long while.” John Stopford, head of multi-assets at Investec, said: “There could be a bubble as investors have loaded up on high yield and corporate bonds. If we do see a reverse in the market, there could be price dislocation and a messy unwind.” In the past six years, low interest rates and central bank quantitative easing have spurred a desperate search for yield. This has encouraged investors to buy investment grade, high yield and emerging market bonds to supplement their treasuries and gilts.
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UK'S NETWORK RAIL MAY SELL OFF TELECOMS RIGHTS - The telecoms giants BT, Vodafone and O2 could be in line to run the airwaves on Britain’s railways, providing wifi for passengers and transmitting signalling information to drivers. The uk Department for Transport is considering forcing Network Rail, which looks after the most important 20,000 miles of track and its biggest stations, to sell its telecoms work to the private sector, writes the London Independent. Network Rail was in effect formally renationalised last year, and ministers have been keeping a closer eye on the organisation. A senior rail industry source said the Department of Transport wants Network Rail to concentrate on “core work”, such as ensuring that maintenance and repairs are completed quickly and safely. Network Rail’s reputation has suffered of late, with engineering overruns at Christmas causing misery for thousands of passengers and chaotic scenes at London Bridge, which is undergoing redevelopment.
