STATE'S COST OF BORROWING DOUBLES IN EURO TURMOIL - The Irish Government's borrowing costs have more than doubled since the last week in April to hit close to 1.5% for 10 year debt at one stage yesterday.
Analysts have described the surge in borrowing costs for euro-area nations as a "market rout" with Ireland among the worst affected in a week-long shift in lender sentiment, says the Irish Independent. "From a fundamental perspective, nothing has changed on Ireland but the market was very one sided (in favour of low yields) and is now moving sharply the other way all at once," according to Owen Callan of Cantor Fitzgerald in Dublin. Volatility is especially high because big global banks that traditionally smoothed out big jumps by "making markets" - using their own balance sheets to buy and sell bonds - have been sidelined in part as a result of increased regulation. Yesterday the yield, or return, investors demand to hold Irish Government bonds moved sharply higher to 1.49% at one stage, before settling at around 1.25%. The levels are the highest seen so far this year. As recently as April 28 the cost of borrowing for 10 years was less than 0.70%. At the worst period of the euro crisis the yield was around 14%. The latest swing is reversing a three-year trend and a sign of a more challenging financing and volatile financing environment.
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GOODBODY POACHES FOUR SENIOR STAFF FROM RIVAL DAVY - Goodbody stockbrokers has poached four senior staff from the asset management arm of its biggest rival Davy, including James Forbes, its highly regarded director of distribution and investment solutions. The four will form the nucleus of a new retail asset management division at Goodbody, which should see it go toe to toe with Davy Asset Management in pitching for business to manage chunks of assets for big investors such as insurers and pension funds, writes the Irish Times. In addition to Mr Forbes, Goodbody has also plucked Damien Meade, a global fund manager who is described as lead manager of Davy’s Global Brands fund and co-manager of its Discovery mid-cap fund. He was previously with AIB Investment Managers and only joined Davy 18 months ago. It has also hired fund manager Paul O’Brien, who Davy’s website says is responsible for “running the Discovery fund”. Alan Wyley, a sales manager with Davy Asset Management, is also moving to Goodbody. The four, who have varying gardening-leave commitments, will all join Goodbody over the coming months. It is expected that the team could be fully in place by the end of the summer, when Goodbody will start pitching for business.
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STAFF EARNING OVER €100,000 AT STATE AGENCY FALLS DUE TO 'NATURAL ATTRITION' - The number of high-fliers at Enterprise Ireland earning over €100,000 stood at 18 in 2014, figures show. Numbers released by the development agency in response to a Freedom of Information request show Enterprise Ireland employs one person earning between €150,000 and €200,000, with an additional 17 earning between €100,000 and €150,000. The agency said 16 of the staff earning between €100,000 and €150,000 are based in Ireland with the 17th based in China. The 18 earning more than €100,000 at the agency compares to 14 in that bracket at the IDA, reports the Irish Examiner. However, the number of high earners has fallen. The agency, which helps Irish-owned businesses deliver new export sales, said the numbers earning over €100,000 at the end of 2012 was 40. This was “primarily down to natural attrition rates and recent voluntary redundancy programme,” said a spokesperson. Last year, Enterprise Ireland-supported companies created 19,705 jobs. This resulted in a net rise of 8,476 in the numbers employed by such firms, the highest net gain in the history of the agency.
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LI KA-SHING LINES UP BACKERS FOR £10.3 BILLION O2 BUYOUT - Li Ka-shing has won backing from Singaporean and Abu Dhabi sovereign wealth funds for his £10.3 billion purchase of Britain’s O2 - a deal that if approved will see the Hong Kong billionaire’s Hutchison Whampoa become the UK’s largest mobile operator. In total, investors will pay £3.1 billion for a 32.98% stake. Singapore’s GIC and the Canada Pension Plan will each chip in £1.1 billion, with the remaining £900m coming from the Abu Dhabi Investment Authority, Quebec pension fund CDPQ and BTG Pactual, the Brazilian banking group. The deal to buy 02 from Spain’s Telefónica was agreed in March and stands to transform the UK mobile market, says the Financial Times. It will catapult Hutchison’s Three from the market’s smallest player to its biggest and shrink the field from four to three. The move is a bold one for Mr Li as he pursues plans to build a pan-European mobile network - all the more ambitious given that Three took some eight years to turn a profit after burning through billions of pounds on capital expenditure. It also comes as the octogenarian Mr Li is in the middle of restructuring his sprawling business empire in preparation to hand over to the next generation. The restructuring is expected to be completed by June.
