Weekly Market Insight

Latest Economic & Market Update 20th October 2020

20th October 2020

Good afternoon, it is October 20th 2020 and here is your economic and market update from BlackBee. 

Today’s focus:

  • 25% YoY reduction in Dublin housing stock – Daft Q3 Report
  • EU gears up for bond issuance by hiring investment banking underwriters

As the pandemic crisis in Ireland deepens, the long-standing housing issue remains as important. Daft’s Q3 Irish House Price Report highlights some startling statistics. Since the pandemic began there has been an increase in workers leaving Dublin city to relocate to other parts of the country, but this doesn’t appear to have alleviated the pressure on the Dublin housing market. From a sample pool of Daft.ie listings, the number of properties listed on the Dublin market this month was 25% lower than in October 2019. House prices in Dublin were 2.2% higher on October 1st 2020 than 12 months previously. In Dublin County as a whole prices rose the most in the city centre, gaining 3.1%. The nationwide housing supply, according to Daft.ie listings, has also taken a hit. The total number of properties available in Ireland on October 1st 2020 was 17,700 – the lowest supply level on the website in 14 years. House prices nationally are 2.7% higher than October 2019. An ESRI study “Assessing the Impacts of Covid-19 on the Irish Property Market” highlights the disruption caused by halting construction in Wave 1 of the pandemic. 24,000 houses were due to be built this year but the ESRI estimates that this could fall as low as 15,000 to 16,000. Ireland drastically needs an increase in available housing stock with near term delivery. BlackBee are committed to helping address this issue and providing impact investment opportunities to investors via social housing and residential real estate product offerings.

The EU is finalising plans to further curb coronavirus economic disruption by issuing SURE (Support to mitigate Unemployment Risks in an Emergency) bond instruments this week. Targeting the sale of new 10 and 20-year bonds, Barclays, BNP Paribas, Deutsche Bank, Nomura and UniCredit have been hired by the monetary union to deliver the debt securities to the market. The FT reports that the debt is expected to be priced on Tuesday. This will be the first bond issuance under the SURE programme aiming to provide up to €100bn of loans to member states. This will financially support EU members, including Ireland, by ideally keeping workers in their jobs during the Covid-19 crisis. The sale is expected to meet strong demand as investors look for premium rated bonds and potentially provide an alternative to traditional safe-haven sovereign debts instruments such as those issued by the US or Germany. The EU has a triple A credit rating with Moody’s and Fitch. This is further indication of the fiscal support available within the EU. It is possible that Ireland will seek to avail of this support to help cover the cost of the self-imposed 6 week level 5 lockdown.

Best & Worst Performers of Large Cap US Stocks on Monday
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Global Market Update
(as at close of markets 19/10/2020)