ISEQ SET FOR WORST YEAR SINCE 2010 BAILOUT - The Iseq index of Irish shares is on track to post its first annual decline since 2010 - the year that the State was forced into an international bailout.
While the benchmark has rallied almost 23% from its post-Brexit lows, it remains down 4.4% from where ended in 2015, with only a day and a half of trading before 2016 draws to a close, says the Irish Times. The Iseq fell by 0.4% to close at 6,490.69 points on Wednesday. "Over the course of 2016, the Iseq underperformed the broader European market held back by the overplayed view that Ireland would suffer from UK’s decision to leave the European Union," said Gerard Moore, head of equity research at Investec in Dublin. While Irish shares were caught up in global volatility early in the year, amid heightened concern about the Chinese economy and emerging markets, the Brexit vote sent stocks into freefall, with Irish companies affected particularly by a slump in the value of sterling against the euro. However, rising expectations that incoming US president Donald Trump will push through a massive stimulus plan next year has reignited expectations of economic growth and inflation has served to lift stocks globally.
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FIRST-TIME BUYERS SQUEEZED OUT BY CASH-RICH INVESTORS - Investors are dominating house purchases and squeezing first-time buyers out of key markets as prices continue to rise.
Investors have bought more homes than first-time buyers in almost half of all markets, or 62 from 128, an analysis of data from the Central Statistics Office (CSO) showed. While the overall figures suggested first-time buyers and existing owners purchased the bulk of all homes sold, they masked the fact that cash-rich investors were buying in areas of highest demand where shortage of properties was resulting in rocketing rents and rising prices. Among the markets targeted were Galway City, Limerick City, Dublin 1, 2, 4, 6 and 8, Waterford city, Cork city and the Co Cork commuter towns of Mallow, Kinsale and Bandon, says the Irish Independent. In some markets, investors snapped up more homes than all owner-occupiers combined. These areas included Dublin 2, Cootehill in Co Cavan, Clifden in Co Galway, Charleville in Co Cork and Kilrush in Co Clare. The figures will add to pressure on the Government, which is grappling with a slow increase in delivery of new homes, coupled with political controversy over rising house prices and soaring rents which are now at boom-time levels. The latest figures from the Department of Housing, which covered the period to the end of October this year, showed that 11,797 houses and apartments have been built in 2016.
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GOVERNMENT MUST STOP PANDERING TO SMALL PARTIES AND START HELPING SMEs - Small businesses are concerned about insurance costs and the lacklustre response of the political class, says ISME's Neil McDonnell writing in the Irish Examiner.
With the media fixated on motor car insurance, SMEs will tell you that the costs of all types of insurance for buildings, public liability and employees, are rising. Mr McDonnell said that ISME is no supporter of the insurance industry, but as long as we have a system that places the value of a broken toe at €15,000, we will have expensive insurance. We and other players presented to the Dáil finance committee a list of measures to reduce insurance costs. The committee ignored most of what they were told. If the judiciary won’t play ball, legislate a way out for them, and amend the Constitution, if necessary. As long as judges continue to pick compensation figures out of that part of their anatomy best reserved for sitting upon, we will have unaffordable insurance. All sorts of costs are too high in Ireland. Insurance, electricity, rent, health, education, transport and energy - all affect SMEs directly, or through their employees. All are highly influenced or controlled by government policy.
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CHINESE KEEP BUYING LONDON PROPERTY DESPITE BREXIT - For many international real estate investors, London is no longer the place to be.
Since the UK voted to leave the EU in June, investment flows into London commercial property have dropped to less than half their level of a year earlier. But one group of investors is proving markedly less pessimistic: buyers from China and Hong Kong, who have continued to snap up trophy assets in the City of London and the West End, largely undeterred by Brexit, writes the Financial Times. Peter MacColl, head of global capital markets at the property advisers Knight Frank, describes a "surge of Chinese money" into UK property, including cash from state-owned enterprises, corporations and ultra-wealthy individuals. Demand from mainland China has been at least equalled by that from Hong Kong, says Chris Brett, head of international capital markets at CBRE. "At the moment, there is about £4.5 billion of live equity targeting London from Hong Kong investors," Mr Brett says. "It’s the most activity we see from any international buyers." These inflows are helping to limit an overall decline in overseas buying since the EU referendum.
