Friday's business news headlines
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What are the major headlines in today's business news?
Breakfast Business with Enterprise Ireland on Newstalk. Good morning, you're listening to Breakfast Business with me, Tom McEnany, standing in for Joel Lynham. And we have lots coming up between now and seven o'clock, including HR horror stories and News Talk's Green Person of the Month. First, let's have a look at the newspapers before we're joined by Aidan Donnelly, Head of Global Equities at Davie Stockbrokers. All of the newspapers this morning are focused on the impending sale of permanent ESB, with much of the focus being on how much the government will lose from the sale. The Irish independent columnist, Martina Devlin, who co-authored the book Banksters about Irish banks during the crisis, suggests the loss could be as great as 400 million euros.
Ms Devlin writes, Ireland's 57% stake in PTSB might net €860 million when the bank sells, in addition to the €2.75 billion already returned to the state. Come what may, there will be a shortfall. The likelihood is that we will be around €400 million adrift in our investment, made at gunpoint following the financial crisis. The billions for PTSB, part of a €64 billion package for the zombie Irish banking sector, had to be scraped up prized out, borrowed at steep interest rates and amassed with extreme difficulty. Over in the Irish Times, its market correspondent, Joe Brennan, puts the expected loss at a mere €300 million in a lead story that focuses mainly on concerns that the new owner will cut branches and jobs in what is the Republic's least cost-efficient bank.
Mr. Brennan writes that the bank's forecast 525 million running costs for this year will equate to more than 75% of its income. And that compares to figures of below 50% at AIB and at Bank of Ireland. Now, as I mentioned earlier on, we're joined for the markets by Aidan Donnelly, head of global equities at Davies Stockbrokers. Good morning, Aidan. Morning, Tom. How are you? I'm not too bad. Now, I know I can't talk to you about permanent TSP because Davie Stockbrokers is advising permanent TSP. But there is plenty more going on in the markets. First of all, there's a small matter of a deal between the US and China. It looks like they've done a one year stop on all tariffs and all punishments for each other, as it were.
Yeah, and it's interesting to read the commentary now from both sides of it. I think given the history that we've seen since this all started in April, nobody really believes it. They'll accept it now and they'll take it for as long as it lasts. But I don't think anybody is going to make any major business decisions based on what happened yesterday. And I think, you know, if you look at it from the Chinese side, we're seeing a lot of the suppliers continuing on to try to diversify their the countries that they operate in in order to make sure that they're circumventing the straight-up Chinese-US tariffs wherever possible.
What are the financial implications of the permanent ESB sale?
And I think even from the US perspective, in terms of bringing... goods into the US, an awful lot of companies are looking to try to move from single source as well. So, look, I think, you know, it's nice that there was an Entente Cordiale signed for a little while, but as we know, you know, And certainly the Trump administration in a couple of months time could turn around and get annoyed about something. And lo and behold, we're back to square one again. So I would say a brief breath of relief, but nobody is certainly putting anything permanent around it.
I see that Donald Trump and President Trump is eschewing his normal penchant for hyperbole by saying that this deal is a 12 out of 10. But the FT this morning, an analysis piece that doesn't make it into the main paper, is saying that the big winner here is China establishing its ability to force America to roll back on tariffs.
Yeah, and that's ultimately the big thing here that the American administration might not want to admit it. But the reality is when you look at the cards that China are holding, particularly around the rare earths and things like that, rare earth licenses and access to rare earths and how dependent the US is on that.
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