The Best of the Weekend Business Papers 22 March 2020

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THE MAIN TALKING POINTS

· The Business Post says the cost of mitigating the impact of Covid-19 could top €15bn

· The Sunday Independent says Mainstream Renewable Power is in talks about an equity sale

· The Sunday Times reports the government is finalising plans for a 75% wage subsidy scheme

· The Financial Times says the UK government is to pay laid-off workers 80% of their salaries

· The Wall Street Journal says US applications for unemployment benefit could hit 2m next week

 
QUOTES FOR THE WEEK

“We are asking people to come together as a nation by staying apart from each other.”

– Taoiseach Leo Varadkar

 

 

 

THE BUSINESS POST
 

 

The financial cost of bailing out the economy from the impact of Covid-19 could top €15bn according this week’s Business Post. The figure comprises the cost of income supports for laid off workers as well as higher spending on the health service. Already some €2.3bn has been allocated to cover social welfare costs although this will be a fraction of the final figure when HSE spending and business and employee supports are included.

On page two, Aaron Rogan reports that three Irish life science companies who have developed rapid Covid-19 testing kits are expanding to meet demand.

All are all offering test kits for the virus which return results “within minutes”.

There is a nine-page section in this week’s paper devoted solely to the coronavirus crisis. Under the headline “Recusing the economy demands rapid, large-scale intervention” Ian Guider looks at what the government needs to do to prevent the economic impact of Covid-19 becoming permanent. He reports on the Irish government’s €3.1 billion package to fight the spread of the coronavirus amounts to almost €630 per person — making it four times bigger than Germany’s measures announced through March 9 and 30 times bigger than those of the US, according to calculations by Goodbody Stockbrokers. Also quoted is Danny McCoy, CEO of employers’ group Ibec, who wants a “corporate welfare” programme which would see the government guarantee 70% of the income of temporary laid-off workers for up to 20 weeks.

Another topic likely to feature heavily on this week’s agenda is insurance. Peter O’Dwyer reports that businesses are “staring down the barrel” because most insurance policies don’t pay out for losses arising from a pandemic. He concludes that the government may be forced to “step into the breach to share the burden”.

The phrase “helicopter money” is likely one you are going to hear more of as this crisis unfolds. The idea is that central banks give cash directly to the public and has been floated across the world as a way of alleviating the impact of Covid-19, has been. “People are talking about helicopter money because lowering interest rates has more or less run of steam,” former Central Bank of Ireland governor Patrick Holohan tells Barry J. Whyte.

On pages 14 and 15 there is a round-up of the impact that Covid-19 has had to date on Irish companies. C&C have said that the outbreak will have a “material impact” on its performance in the current financial year while building materials group Kingspan said it would no longer propose to pay shareholders a dividend. Meanwhile, both Ryanair and Aer Lingus have said that pay for staff would be cut by as much as 50%.

In Brief

· Bank of Ireland has recorded a 200% increase in the number of business customers seeking payment deferrals

· The owners of George’s Street Arcade in Dublin will not seek rent arrears from tenants when it reopens

· Media industry body Newsbrands Ireland said media outlets should be given “essential service status”

· Credit ratings agency Fitch said Denis O’Brien’s Digicel could default on a $63m bond payment due in September

 

 
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THE SUNDAY INDEPENDENT
 

 

 

This week’s top business story is that Mainstream Renewable Power is in discussions with major funds and energy giants interested in taking a stake in the company. The company also said it was close to finalising a $700m funding round.

There rest of the front page stories are Covid-19-related. Firstly, Samantha McCaughren reports that tens of thousands of people may struggle to claim redundancy payments because of significant issues with the liquidation process due to the coronavirus outbreak. Separately, it’s reported that hotel operator Dalata is in talks with a number of government agencies about potentially providing accommodation to coronavirus front-line workers.

Returning to the main paper, and there are a number of opinion pieces regarding the economic fallout from the coronavirus crisis. Colm McCarthy writes that unconventional economic policy is needed to stop the virus from causing even greater damage while Dan O’Brien writes that markets need a “shock and awe” response to Covid-19. There is also an op-ed by Central Bank governor Gabriel Makhlouf who say the Central Bank is using “all its firepower” to help households and the economy.

In Brief

· Irish airline CityJet has temporarily laid off most of its 1,200 staff due to Covid-1

· Irish online food delivery platform Flipdish has signed up an additional 100 restaurants

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THE SUNDAY TIMES
 

 

“State set to pay 75% of wages for virus-hit jobs” is the splash on this week’s paper. According to the report, the government is close to finalising a massive wage subsidy which would see it pay workers laid off due to the coronavirus outbreak 75% of their wages. The new measure are due to be released early this week.

“Insurers reject coronavirus claims” is the stark headline on the top story in the business pages. Niall Brady reports that insurers are refusing to pay claims for loss of earnings, even those from businesses that paid extra to secure cover for infectious diseases. The reason? Covid-19 is a new disease so insurers say it is not covered under policies.

In a worrying sign of the knock-on effects of the outbreak, Gavin Daly reports that Nasdaq-quoted software company Wix.com has pulled out of a deal to lease office space in Dublin. The company was due to move into a new building at Sir John Rogerson’s Quay which would have accommodated around 200 workers.

In Brief

· Hotel operator Dalata is set to close some of its hotels this week

· More than 400 staff at Irish whiskey distillery visitor centres have been laid off

· The Unicorn restaurant in Dublin is to be demolished to make way for apartments

· Larry Goodman has secured majority control of Blackrock Clinic in Dublin

· French sports retailer Decathlon has postponed the opening of its first Irish store in Dublin

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THE FINANCIAL TIMES 
 

 

In Companies & Markets the top story is that Ryanair boss Michael O’Leary and the rest of the airline’s staff is to take a 50% paycut. In an interview with the paper O’Leary said he thought the virus shutdown would last three months, but also admitted that “none of us have any idea”.
 
Elsewhere, the FT leads with the news that the UK government will pay 80% of salaries, up to €2,500 per month, of workers who are laid off due to the coronavirus. The scheme was described as a “landmark package” and “one of the most comprehensive in the world”.
 
How long will social distancing measures have to last, is a question many of us have been asking recent days. The answer is up to a year. That’s according to a report on page two citing the advice given to the government by its top scientific advisers. The only glimmer of light is that the measures could be relaxed “from time to time”.
 
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THE WALL STREET JOURNAL
 

 


The Wall Street Journal reports that applications for unemployment benefits in the US could hit 2m next week when the US Labour Department announces jobless claims. Unsurprisingly, this would be the highest single weekly increase in claims on record.Starbucks has said it is closing the majority of its cafes in the US and shifting to a delivery and drive-thru service. The company, which has 8,870 outlets and around 190,000 employees in the US, said it would pay its workers for the next 30 days whether they reported to work or not.Finally, it was another torrid week for stock markets with the S&P 500 and Dow Industrial indexes falling more than 14% for the week. “Unlike in 2008 there’s no place to hide,” says Scott Martin, chief investment officer with Kingsview Wealth Management. “Nobody wants to own anything other than cash.”
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All views are strictly my own brief interpretation of the articles in the various publications and not intended to be comprehensive. 
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Have a safe & healthy week.  
Regards,
Shay

 

 
 
Shay Dalton 
 
Managing Director – Lincoln Recruitment
E: sdalton@lincoln.ie
A: 5 Fitzwilliam Square, Dublin 2

 

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About the Author

Shay Dalton

Shay Dalton

Managing Director

sdalton@lincoln.ie+353 16498583

Shay Dalton is the Managing Director of Lincoln Recruitment Group. Shay is a qualified ACCA Accountant with over 20 years’ experience specialising in the placement of senior positions across a broad spectrum of Accountancy and Finance positions within the industrial and financial services sectors. Having been involved in the establishment of some of the most respected financial recruitment brands in the Irish market, Shay subsequently set up Lincoln Recruitment Specialists in 2008. He also hold’s an MSc in Organisational Management and is a member of BPS, qualified to conduct and interpret psychometric testing as well an EQi testing.

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