BUILDING SOCIETY THREATENS TO QUIT SAVINGS SCHEME - Yorkshire Building Society has pleaded with the Government to take action or risk 10,000 Irish savers being left out of pocket.
The society has written to junior finance minister Michael D'Arcy saying it won't be able to continue operating 'Save-As-You-Earn' (SAYE) schemes here without a Brexit deal. It has asked the Finance Department to amend legislation in a way that it believes would safeguard the SAYE schemes even if no Brexit deal is struck, writes the Irish Independent. "Given ongoing negotiations over Brexit, we have looked into obtaining an Irish banking licence to continue offering this service," the society's letter to Mr D'Arcy reads. "However, we have concluded that the costs of authorisation would be disproportionate to the benefits of doing so. In the event of a no-deal Brexit, or a deal without equivalence in place, we will no longer be able to continue deposit-taking on a cross-border basis in Ireland... unless an alternative arrangement can be put in place, that would mean the [circa] 10,000 savers we have would no longer qualify to receive shares on a tax-efficient basis at the end of next year". The SAYE schemes are designed to allow employees buy shares in the companies they work for in a tax-efficient manner. The employees are granted options to buy shares, then save with a third-party financial institution for a period of years, and at the end of the period then buy the shares using the savings that have been put in place. Yorkshire said it has around 10,000 people using the scheme in Ireland, and that it is one of three financial institutions that provides the scheme.
THREE BWG EXECUTIVES IN LINE TO SHARE €75m WINDFALL - Leo Crawford, chief executive of Irish Spar franchise owner BWG, and two other directors of the group are in line to share a windfall of about €75 million in coming years as BWG's majority shareholder takes full control.
Mr Crawford, together with BWG's property director John Clohisey and its finance director John O'Donnell, own 20% of BWG, with the rest owned by South African company, the Spar Group (TSG). When TSG first invested in BWG in 2014, the Irish investors struck a deal with it to sell it their remaining shares under a pre-agreed pricing formula that depended upon future profits. That agreement is due kick in next year, says the Irish Times. Johannesburg-listed TSG on Wednesday reported its financial results for the year to the end of September, including a detailed financial snapshot of BWG, which is unlimited and doesn't file accounts at home. TSG's results put a putative valuation on the 20% of BWG that it is obliged to buy of 1,216 million Rand (€75 million). It will make the first payment to the BWG executives in December 2019, with more due in 2020 and 2022. Meanwhile, TSG's results confirmed that stockpiling by consumers of bread and other food items during this spring's cold snap, as well as demand for cold drinks during the hot summer, helped swell BWG's annual sales by 4.5% to €1.5 billion. BWG's profits were reported in Rand only, up 15% to 538 million Rand (€33.2 million).
REBUILDING SEMI-DETACHED HOME SOARS TO €227,440 - The costs of rebuilding a home after a fire or a major flood - yardsticks used by insurance firms - is at least €227,440 in some areas, up 5.5% in the past year, and far in excess of inflation, according to surveyors.
The Society of Chartered Surveyors Ireland said its annual survey showed the hikes were driven by the rising costs of regulation in the building industry, which is ramping up to meet the huge demand for new homes. "The construction sector is experiencing high demand and this increase in activity is having an inflationary effect on prices," Mark Bourke, from the surveyors' group, said. "Next year will see the introduction of amendments to heating and ventilation requirements for new builds and it's expected that these will also have a further impact on prices, although the new regulations are expected to reduce heating costs and should be positive in the long-run," said Mr Bourke. In Dublin and Cork, the minimum rebuild costs are €227,440 and €182,427, respectively, but homeowners need to include costs of €30,000 to rebuild garages, kitchens, built-in wardrobes, and floor finishes, writes the Irish Examiner. The costs are based on rebuilding "a standard, three-bedroom" semi-detached house of 1,023 sq. ft, or 95 square metres. Galway's minimum rebuild costs are the next most expensive, at €180,381. Waterford and Limerick homes cost €174,243 and €177,312 to rebuild.
NUMBER OF MARKET INDICES HITS 3.7 MILLION - Indices measuring markets have ballooned in number by another 438,000 to more than 3.7 million in the past year, as providers produce a blizzard of bond market, environment, social and governance benchmarks.
Gauges designed by benchmark providers to measure everything from the performance of small Chinese companies and African debt derivatives to the music streaming industry or groups that adhere to Catholic values have been spurred by the rising popularity of passive investing, says the Financial Times. As a result, the number of indices globally climbed by 12% from June 2017 to 3.73 million this June, according to the second annual survey of the landscape by the Index Industry Association, a trade body set up by 14 of the biggest players in the benchmarking business, including MSCI, S&P Dow Jones indices and FTSE Russell. "Last year we were able to quantify the index landscape for the first time ever. Now that we have a baseline, it's fascinating to see the amount of innovation coming out of fixed income where investors are looking for more fine-tuned benchmarks,' Rick Redding, the chief executive of the IIA, said in the report. While the number of stock market indices dipped 3% to just over 3 million in the 12 months to June 2018, as providers retired some smaller sector-focused indices, the bond benchmarking business continues to grow at a healthy clip - now accounting for about 16% of the overall index universe.