Irish people’s appetite for investing in shares and other such asset classes is likely to fall in the coming months, largely due to the continuing fallout from the spread of coronavirus, Bank of Ireland has said.
“Irish investor sentiment was stable in the first quarter prior to the spike in market volatility that accompanied the spread of the coronavirus,” said Bank of Ireland Investment Markets’ Tom McCabe.
“However, this is very much in the rearview mirror now. Looking forward, it is difficult to envisage anything but a drop in investor sentiment over the next few months, particularly given the human and market concerns raised by coronavirus,” he said.
European stock markets endured their worst week since the 2008 financial crisis last week and more market volatility is expected across Europe and the US in the weeks ahead.
“Right now, we view investing in the current environment using the hackneyed phrase of ‘catching a falling knife’,” said Richard Bernstein, chief executive of Richard Bernstein Advisors in a note to investors.
“We see no need to rush into markets.”
Meanwhile, Ibec has called on the Government to unveil further extensive stimulus measures to support businesses amid the ongoing coronavirus crisis.
“The economic aspects of this crisis are unique,” said CEO Danny McCoy.
There is no precedent and it will require a very different policy response to that used in previous crises. A co-ordinated international and multi-agency fiscal stimulus package will ultimately be required in order to reboot our damaged economy.
Seanad Éireann candidate Peter Finnegan has urged the Government to enact emergency legislation that would see the banks place a moratorium on mortgage payments and loan repayments for a period of six months.
Mr Finnegan, who serves on the board of Maynooth University, has also called for emergency measures to be introduced to help businesses who continue to pay staff wages for the next three months.
“The economy is facing a major problem as cashflow dries up with the slowdown and some sectors have had a complete collapse of business activity,” said Mr Finnegan. “The hospitality industry, tourism, conferences and events are some of the unintentional victims in the war against the virus. People may forget that the staff in these businesses, many on modest wages and struggling to cope with mortgage and rent outlay, have an absolute fear of growing debt and lack of income for mere survival.
“When the economic crash happened, facilitated by the banking sector, we, the taxpayers, rescued the banks. This is the time for the banks to repay this debt,” he said.
The effect of these emergency measures would be to reduce fear, provide support for recovery of business activity, keep cash flowing in communities, and enable employers to retain staff on payroll, even on reduced wages, said Mr Finnegan.
Elsewhere, the Irish Travel Agents Association (ITAA) wants the Government to draw up a support plan for the travel and tourism sector.
The introduction of bridging loans, relief to business rates, and Vat and PAYE deadline extensions are among the “extraordinary support measures” it wants introduced in a bid to protect businesses.
The ITAA wants a 40% reduction in commercial rents until the end of the year, and the same reduction in commercial rates.
Denmark’s government has told private companies in the country, struggling with drastic measures to curb the spread of coronavirus, that it would cover 75% of employees’ salaries, at a maximum of 23,000 Danish crowns (€3,073) per month until June 9, if they promised not to cut staff.
“If there’s a big drop in activity and production is halted, we understand the need to send home employees. But we ask you: don’t fire them,” said Denmark’s prime minister Mette Frederiksen.