A roundup of today's other business news in brief
Stockbroker predicts GDP will contract by 1% next year
Ireland’s gross domestic product (GDP) will contract by 1 per cent in 2010, an economic forecast has said, amid mounting evidence that the Irish and international economies are showing signs of recovery.
The report from Bloxham stockbrokers said the average fall in real GDP for 2009 would be in the region of 7.2 per cent, but would narrow to 1 per cent next year, before showing growth in 2011. Gross national product (GNP) will contract by 3 per cent in 2010, compared to a drop of 10.2 per cent this year.
“Recent Irish indicators suggest that the worst of the downturn is over, but how soon the economy recovers remains open to debate,” the report said.
Exports will drive growth in the Irish economy, Bloxham predicted, as increased global demand filters through. Sterling’s performance remained a serious concern.
Dubai’s Enoc to retain Dragon Oil
Dubai-controlled refiner Emirates National Oil Company (Enoc) will retain control of Dublin-quoted explorer Dragon Oil, quashing speculation of a sale based on Dubai’s need for cash to meet crushing debt obligations.
Enoc said it remained committed to a November 2nd bid for the remaining 48 per cent of the firm at about $1.8 billion (€1.2 billion), valuing Dragon at $3.9 billion.
Analysts, many of whom said the 455 pence/share bid price was low, had speculated that Dubai’s debt woes could prompt state-owned Enoc to sell Dragon on to another party for a profit upon completion of the takeover. But Enoc said it would not sell any of its Dragon shares until the end of 2011.
Castlewilder profits rocket to €250m
Profits at an Irish holding company for US software firm Cadence Design Systems soared to almost $250 million (€165 million) in 2008, up from €3.2 million the previous year.
The holding company in question – Castlewilder – paid out dividends of $250 million to its Californian parent during the same period. Cadence is a publicly quoted company incorporated in Delaware. It manufactures software for electronic design automation.
Cadence is involved in a dispute with the Internal Revenue Service over claimed tax deficiencies. It is disputing two tax claims totalling $461 million, some $309 million of which relates to transfer pricing arrangements with an unnamed foreign subsidiary.
Moody’s AAA rating for 3bn bond deal
Credit ratings agency Moody’s has given almost €3 billion worth of Irish mortgage-backed bonds a triple A ranking.
This means it believes there is little risk of default on the investment.
The agency yesterday said that it is giving a “AAA” rating to €2.8 billion worth of bonds issued by Dublin-based Wolfhound Funding and backed by owner-occupied and buy-to-let mortgages on homes in the Republic.
Bank of Scotland Ireland is the lender.
Dell transfers Polish plant to Foxconn
Computer giant Dell announced yesterday it is transferring its manufacturing operation in the Polish city of Lodz to Taiwanese contract manufacturer Foxconn Technology.
Dell said the move will simplify its global operations and make them more efficient.
Dell confirmed its employees in Lodz will continue in their roles when Foxconn takes over management of the operation. Almost 2,000 Dell workers were made redundant from the company’s Limerick plant earlier this year.
