AUTUMN 2015 Economic Outlook Constantin Gurdgiev
CHINESE STOCK MARKET PERFORMANCE Dr. Paul Egan
HIGH PERFORMANCE UNDER PRESSURE IN THE CORPORATE WORLD Conor McCarthy
THE RETURN OF THE TIGER Garvan Grant
OUR DEMOGRAPHIC TIME BOMB IS TICKING Joe Downes
GAINING COMPETITIVE EDGE THROUGH HIRING: 2015 AND BEYOND Morgan McKinley
Table of Contents Economic Outlook - Dr. Constantin Gurdgiev ................................................ P3 Our Demographic Time Bomb is Ticking - Joe Downes .............................. P7 Legal Briefs .................................................................................................................. P9 Business Briefs ............................................................................................................ P10 Stock Market Performance : A Poor Reflection of China's Real Economy - Dr. Paul Egan ....................................................................................... P11 HIgh Performance Under Pressure in the Corporate World Conor McCarthy ......................................................................................................... P13 Gaining Competitive Edge Through Hiring: 2015 and Beyond Morgan McKinley ..................................................................................................... P16 The Return of the Tiger - Garvan Grant ........................................................... P17 Meet The Team .......................................................................................................... P20 Range of Services ..................................................................................................... P21
WELCOME
Welcome to Collins Brooks’ Autumn Newsletter. We hope you had an enjoyable and relaxing summer. This edition of our newsletter has a variety of interesting and topical articles which we hope you will enjoy. We are happy to receive any feedback or suggestions you may have for future editions. We are very proud of the dedicated team here at Collins’ Brooks and are happy to speak with you should you have any legal queries, so please do not hesitate to contact us to make an appointment.
Jim, Roni and Lorna
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Economic Update Dr. Constantin Gurdgiev If there are two words that can sum up the markets of the summer past they are 'volatility' and ‘leverage’. And if there is a single lesson to be learned from the experiences of the last three to six months, it is that leverage mixed with volatility is still the widow-maker in the investment world.
Volatility’s Back… With a Vengeance…
after weeks of historically anomalous volatility, Shanghai stock exchange fell almost 8 percent, with Nikkei, EuroStox 500 and S&P500 all erasing on average just under 5% off their valuations. By the end of the month, massive volatility in the markets around the world pushed share prices into a recovery territory. Still, Shanghai was down 12 percent at the end of August, with S&P down 6% marking the largest monthly drop since May 2012, EuroStoxx fell 8.5%, index’s worst performance since 2011. Markets turmoil was so sharp, VIX index, a gauge of investors fear, even after the relative stabilisation has reached its highest level since 2011.
From the onset of 2015, volatility has been a running theme of the global financial markets. Most notably, the risks associated with wild swings in prices- or returns-related signals first blew up in our faces in the form of dramatically widening spreads as the ECB sucked liquidity out of the sovereign bond markets as covered previously in this newsletter. In recent weeks the links between bond and stock markets have undergone a dramatic revision with the China Tremor – the gasps of the stock market that was in a meltdown in the last weeks of August.
In August a massive blowout in the stock markets, triggered by a collapse in Chinese shares prices, drove panic across both the Advanced Economies and the Emerging Markets. On August 24th,
Investment Markets Widow-Makers As the storm in the global financial markets rolled from the emerging markets to corporate bonds in 2014, to European sovereign bond markets in the first half of 2015, the global economy has been limping from one growth downgrade to another. Energy, metals and even agricultural commodities prices were falling off the cliff. Central banks around the world were quietly, but aggressively, propping up the financial assets valuations. By the beginning of the year, Chinese authorities were staring down the barrel of slowing economy. Instead of 10 percent real growth (country average over the previous 20 years), or 7 percent in 2014, China was looking at a prospect of sub-6 percent GDP expansion for 2015 – a prospect so scary that it required urgent action. Enter the PBoC and the Government. Both unleashed significant efforts to prime stock market valuations in a hope that financial investment will take over the slack generated in the domestic demand by falling physical investment (as housing and construction, as well as infrastructure investment fell and factories slowed their fixed capital formation amidst growing unutilised capacity). Property markets posted over 6 percent drop last year (judging by the index covering 70 main urban markets) and this year, things were looking even grimmer back in 1Q 2015.
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Chinese stock market boomed through out H1 2015, with Shanghai Stock Exchange receiving massive inflows of credit and savings-driven funds. Starting with the year at 3351, Shanghai Composite first dropped to 2015 low of 3076 by February 2 before rising to the year high of 5166 on June 12. This massive rate of growth was sustained by repeated rates and leverage ratios cuts, regulatory reductions in reserve deposits ratios for the banks and a massive inflow of savings from retail investors pulled into stocks by the uncertain prospects of property markets and falling deposit rates. Record numbers of Chinese retail investors flooded into the rising markets between February and June. Around the start of 2015, there were roughly 500,000 A-shares accounts opening monthly, a rise on closer to 150,000 monthly average over the period of 2011-2014. By the end of 1Q 2015, new retail investment accounts were being opened at a rate of over 4,050,000 per month. By the end of 2Q 2015, the rate of monthly accounts openings rose to over 10 million. For comparison, if in the entire 2014 there were only 9 million new investment accounts added in China, in second quarter of this year alone the number stood at 38 million.
about 11 percent of all Chinese households held any stocks in their accounts. When one takes a look at the actual data by names attached to individual accounts, one quickly realises that much of the so-called 'retail' investment holdings is down to larger domestic and international investors who tend to open multiple smaller accounts for the purpose of reducing transparency of their exposures. Around the peak of the stock market craze, the FT did some number crunching. Of all investors in Chinese stocks, 69 percent held less than USD16,000 in their accounts, accounting, in total, for just 5 percent of the market value. Which brings us to another insight into the Chinese markets behaviour in recent months. For quite some time now, Shanghai Stock Exchange valuations have shown negative or zero correlation with both macroeconomic fundamentals in the Chinese economy, the Emerging Markets and the advanced economies stocks. Which made Chinese shares a relatively strong hedging instrument in the eyes of institutional investors world wide.
Leverage in the Chinese stocks also played a central role in the meltdown. In August 2014, outstanding balance of margin debt in two main Chinese exchanges stood at around 2 percent of the total market cap. By the end of 2Q 2015 it was 4.4 percent. Adding unregulated borrowings by investors, ratio of margin debt to market cap was at over 9 percent or five-fold increase in just 11 months. By the end of July, officially reported leverage metrics were showing moderation in investors’ exposures. Reality, however, differed from official reports. Bank of America Merrill Lynch (BAML) report estimated that, based on relatively transparent sources of lending, total leverage in the Chinese markets amounted to 34 percent of the market free float. Just as the Chinese authorities were quietly putting caps on leverage available through official, regulated, brokers’ accounts, BAML argued that outside relatively transparent channels, leverage available via banks’ corporate and personal loans not declared for the purpose of investment in the markets, plus funds extended to the China Securities Finance Corp (CSFC) effectively meant that effective leverage ratio was closer to 50 percent of the free float. Less noticed by analysts, behind the surge in retail investment accounts and internally-generated leverage, there was another worrying trend developing in the market. Back at the end of 1Q 2015, retail investors were still a minority force in the markets, with China Household Finance Survey estimating that only 6 percent of households held any exposure to stocks, against, for example, the U.S. where over 55 percent of households are invested in the markets. Even at the peak of Shanghai market valuations, only
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Beyond that, there have been advanced negotiations between Chinese equities regulators and international indices administrators on inclusion of Chinese stocks into global indices. The latter aspect of the market meant that today's long investors into Chinese shares were sitting on assets that, in their opinion, were about to go into major global indices. When shares move into global equity indices, such as FTSE or MSCI, there is a massive ramp up in the demand for these shares by passive index-linked funds, ETFs. New demand for Chinese A-shares coming from indices inclusion can be very significant: around the end of 1H 2015, combined capitalisation of the two main Chinese exchanges was roughly double the overall capitalisation of MSCI emerging makers basket. And MSCI has been actively engaged with Chinese securities regulators on A-shares inclusion for some time now, issuing a public statement on the matter on June 9th this year.
Interconnected Markets
that can be earned by holding much riskier equities. Thus, at the end of August, many institutional investors worldwide were banking on continued negative correlation between stocks and bonds returns, along with low volatility in bonds prices. And many investors were seeing Chinese markets as a hedge against global economic growth slowdown.
While Chinese stocks were booming, trouble was brewing in the far East. Global trade was falling off the cliff, largely unnoticed in the mainstream media. Chinese growth engine was stalling having officially slowed down to 7 percent growth and unofficially to around 4 percent. Asia Pacific was swept by repeated rounds of currencies devaluations and monetary activism that started to inflict serious damage to the staple of the regional financial diet the carry trades. A broad basket of agricultural and industrial commodities hit lowest levels since the start of the century in August. Oil dropped to lowest level since 2009, down almost 50% over the course of 12 months and 22% since June's high. Copper hit 6 years low by August 24th.
Thus, once China started selling U.S. Treasuries to generate dollars to prop up its markets and currency, three things happened: bonds prices moved down, in line with falling share prices; bonds prices became more volatile in line with increasing volatility in stocks; and leveraged funds were forced to cover mounting losses on their Chinese positions by relying on already thin markets elsewhere. A sell-off of risky assets across global markets ensued to cover the latter. Even controlling for trade and direct investment links between China and the rest of the world, portfolio risks relating to investment strategy of many institutional investors made sure that the Tremor in China was felt across the globe. Only consistently low leverage costs and, thus, ability of institutional investors to quickly cover margin calls broke the chain reaction.
Lesson Redux Which brings us to the main lesson from the China Tremor: history does repeat itself, even after being recognised as farce.
Having devalued yuan by some 5 percent overnight on August 11, the Chinese authorities made the matters worse by subsequently aggressively intervening in the markets by selling U.S. dollars and buying Chinese stocks. All in, estimates from markets analysts suggest that China sold more than USD100 billion worth of U.S. Treasuries to partially fund foreign exchange interventions and stock markets support measures within just two weeks between August 12th and August 26th – more than it did in the previous eight months combined. This put fear into USD64 trillion bonds markets worldwide: as equity investors were rushing into the safety of the U.S. bonds, sell orders were flooding in from the largest international holder of Treasuries. Back in June-July, many institutional investors worldwide were holding so-called risk-parity portfolios positions. This strategy involves borrowing heavily to invest in low volatility assets, like Advanced Economies’ Government bonds. The returns to these bonds tends to countermove with stocks returns, so booming stock markets in the U.S. and Europe implied shrinking bonds returns. To offset low returns from bonds, risk-parity investors leveraged their bonds purchase to increase returns closer to those
The combination of drivers for Chinese markets collapse over the summer fits neatly into the theoretical framework of the modern day financial crises developed by Claudio Borio of the Bank for International Settlements. The Excess Financial Elasticity theory of domestic policy regimes that stipulates that the international monetary and financial systems amplify the excessive sensitivity of domestic financial markets to swings in domestic and international policy regimes to build up in external and internal financial imbalances.
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Since the start of the Global Financial Crisis in 2007, the world has been flooded with research papers and analytical studies all pointing to the dangers poised to the financial markets by excessive leverage and volatility-inducing policy changes. Then again, since late 2007 on, the world has also been gripped by a series of unprecedented monetary policy interventions across majority of economies, quietly overlaying the on-going currency battles. This underwrote much of the so-called recovery that we have been witnessing prior to the onset of 2015. In other words, the ship of the global economy today, eight years since the unfolding of the crisis based on unsustainable debt, leverage and asset valuations is once again sailing out of the safe harbor laden with the same cargo of more debt, new leverage and asset markets primed for serious questions about their valuations.
Dr. Constantin Gurdgiev is the Adjunct Assistant Professor of Finance with Trinity College, Dublin, and serves as a co-Founder and a Director of the Irish Mortgage Holders Organization, Ltd and the Chairman of Ireland Russia Business Association. He holds non-executive appointment on the Investment Committee of Heinz Global Asset Management, LLC (US). In the past, Dr. Gurdgiev served as the Head of Research with St Columbanus AG (Switzerland), the Head of Macroeconomics with the Institute for Business Value, IBM, Director of Research with NCB Stockbrokers, Ltd, and Group Editor and Director of Business & Finance Publications. He also held a non-executive appointment on the Investment Committee of GoldCore, Ltd (Ireland) and Sierra Nevada College (US). Born in Moscow, Russia, Dr. Gurdgiev was educated in the University of California, Los Angeles, University of Chicago, Johns Hopkins University and Trinity College, Dublin.
Irish Economy Seeing Robust Recovery The Paris-based Organisation for Economic Cooperation and Development (OECD) said that the tax base must be broadened and more must be done to control health spending although it did acknowledge that economic recovery is underway. It welcomed the introduction of water charges, noting that they remain among the lowest in the OECD. Revenue from the property tax is also low by international standards. More must be done to accelerate through the courts the resolution of non-performing home loans that require repossession. Rising property prices pose risks, and more housing supply as well as a more developed rental market was needed, but it cautioned against giving any subsidies to first time buyers. They also warned that productivity growth here has been falling for some time. Although Ireland's multinational sector thrived during the crisis, the domestic SME sector is still lagging behind despite the shift away from the low productivity construction sector, with much lower levels of competitiveness, productivity and R&D spending. Economic growth in Ireland last year was the fastest in the OECD countries and they are forecasting further growth of 5pc this year and 4pc next year.
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Our Demographic Time-bomb Is Ticking Joe Downes Ireland is sitting on a demographic time bomb. Put in the simplest possible terms: in the not-so-distant future, we'll have too few taxpayers to cover the ever-increasing costs of caring for an ever-increasing population of old people.
"The increase in the age dependency ratio is predominantly due to growth in the older age groups, with 108,000 more over 65-year-olds by 2021 versus 2016, bringing increased health and social spending pressures," said Mr Mac Coille.
And we can't say we haven't been warned. Both the budgetary watchdog, the Fiscal Advisory Council, the European Commission and several prominent Irish economists have cautioned that demographic spending pressures will soon become a major issue for the Irish economy, with the potential to undermine the country's growth prospects. While the Government faces in to an election year and promises the austerity-weary Irish electorate better times ahead, Davy, the country's biggest stockbroking firm, has joined in the chorus of warnings that, very soon, there will simply not be enough people of working age paying enough taxes to cover the rapidly increasing costs of education, pensions and healthcare for the non-working population.
A recent report from the Department of Finance said that population projections indicate that there is likely to be a significant shift in the composition of Ireland’s population. The overall size of the population is projected to not only be larger but also to be much older than it is now. By 2021, older people are projected to account for about 16% of the population. By 2031, older people will account for about a fifth of the population. The population of people aged 65 years or older is set to increase from 535,400 in 2011 to between 849,500 and 860,600 by 2026, an increase of at least 58%. Over the same period, those aged 70 years or older will increase from 359,500 to between 599,200 and 606,700, an increase of at least 66%.
It pointed out that the ratio between the young and the old and the rest of the workforce was about 50:50 in 2011. However, figures now show that the too young or too old to work segment of the Irish population is likely to rise to 55.4% by 2016 and 57.8% by 2021. "While Ireland's population as a whole is set to expand strongly in the coming years, the population pyramid is becoming more top heavy," Davy economist Conall Mac Coille says.
"The projected contraction in the share of the working age population will contribute to an increase in the dependency ratio so that by 2060 there will be fewer than 2 people employed for every retired person over 65 years as compared with today’s ratio of almost 4," it said.
While it's true that we have a relatively young population at present in comparison with other EU countries, it is also clear that our population, as a whole, will age in the coming years and that this will place an increasingly heavy burden on the taxpaying population.
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Adding to the chorus of warnings, the European Commission said that, put in simple terms, Ireland will not have enough revenue from taxpayers to meet future demands. Projections set out in the European Commission’s 2015 Ageing Report suggest that demographic changes in Ireland will present significant challenges to the Exchequer over the medium-term. In particular, total pension expenditure is projected to increase from 9.2% of GDP in 2013 to 11.4% in 2025. Expenditure on health care and long-term care is projected to increase from 6.7% of GDP in 2013 to 7.4% in 2025. Expenditure on education is projected to increase from 6.0% of GDP in 2013 to 6.3% in 2025. With an election looming, it will be hard for any Government to convince a population that has only just emerged from the worst economic downturn in modern history on top of huge public spending cuts and austerity that they need to pay more now to care for tomorrow's old people.
Joe Downes business writer, editor, Journalist Joe Downes is a business writer, editor and journalist. He was editor of BusinessWorld.ie for 12 years and has written extensively on business and economics matters for local and national newspapers. He was the business editor at the Irish Daily Mail between 2006 and 2010. He is currently a freelance journalist and editor.
NEW DOG MICRO-CHIPPING LAW TO TAKE EFFECT. Micro-chipping is now a legal requirement for puppies, but by March next year all dogs will be required by law to have a microchip. The Minister for Agriculture, Food and the Marine, Simon Coveney, announced €100,000 in funding to subsidise micro-chipping. Owners must also ensure that the correct data for their micro-chipped dog is registered on an approved database and will still need to hold a dog licence. This new process will reduce the number of dogs being destroyed unnecessarily and mandatory registration and certification will help families to identify if they are receiving a puppy from a reputable breeder. All puppies born from June 1 2016 onwards must be micro-chipped under the Microchipping of Dogs Regulations 2015. This costs between €20 and €50. Local authorities, the Department of Agriculture, Food and the Marine and the Gardaí will be responsible for enforcing the law. Owners of dogs found without a chip, after April 2016 will have a short time to have the procedure carried out. Refusal to comply could result in a fine of up to €5,000.
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LEGAL BRIEFS
European ruling on work travel time may raise Irish wages bill Irish companies could face substantial wage bill increases after a European Court of Justice (ECJ) ruling that time spent travelling to and from home by staff without a fixed working base should count towards hours worked. The decision relates to a case involving staff at Spanish security firm, Tyco. However, because the ruling covers the European Union working time directive, it is expected to affect workers across the EU zone. The ruling says excluding journeys made by employees from working time would be contrary to the objective of protecting the safety and health of workers pursued by EU law. It essentially means businesses will have to pay employees without a fixed working base for their journey time and will also affect how rest break entitlements and maximum working hours are calculated. The case came about after Tyco closed a large number of regional offices across Spain in 2011 and technically assigned all its employees to the company’s headquarters in Madrid. The staff employed by the firm install and maintain security equipment in homes and on commercial premises located within whatever geographical area are assigned to them, and so have no fixed place of employment. With some staff members travelling for up to three hours a day without pay, employees went to court to argue that time spent commuting from home to business appointments should be officially classified as working time. The British government tried to intervene in the case, arguing that allowing travelling time to be counted as working time would lead to substantially higher business costs. The ECJ dismissed this argument and sided with the Spanish employees. It said that where workers who do not have a fixed or habitual place of work, time spent travelling between their homes and the premises of the first and last customers designated by their employer constitutes working time within the meaning of the directive. It also took the view that staff are at the employer’s disposal during travelling time and should officially be classified as working at such moments. The ruling is potentially good news for those who don’t have a set workplace such as tradespeople and care workers. Employers’ group Ibec said careful consideration must be given to those employers with workers travelling to a variety of locations in the course of the working day.
Overseas property affected by change to inheritance law Irish owners of holiday homes in Brittany, golf properties in Qunita do Lago, or apartments in Puerto Banus are now able, for the first time, to decide to whom they wish to leave these properties under new EU succession regulations. The regulations came into force on Monday and will apply in relation to deaths after this date. The rules are designed to allow people to apply their own national laws to their succession assets in other EU states which have signed up to the regulations, thus avoiding so-called forced heirship rules in place in many European countries. These impose succession principles on the owners of properties, and determine how the property may be passed on to spouses, children and other beneficiaries. In France for example, children may be entitled to three-quarters of the estate – even if this is against the wishes of the property owner who may wish to leave the property to a non-relative. In Ireland on the other hand, provided you have a valid will, you can decide to whom you wish to leave your estate. Along with the UK and Denmark, Ireland opted out of the new succession regulations as, according to the Department of Justice and Equality, opting in would have “interfered to an unacceptable extent with the manner in which estates are administered in this jurisdiction”. However, Irish residents are likely to still benefit from the rules if they own a property in one of the 24 other EU member countries, including holiday home hotspots Spain, France and Portugal, as well as investment sites such as Germany. This is because they will be able to elect for the law of their own nationality – i.e. Irish law – to apply in these countries, which are bound by the new regulations. While Irish people with properties in the UK and Denmark won’t be able to apply the rule, it may be less of an issue, given the similarity of UK inheritance rules. For those with property abroad, who wish for it to be passed on after their death in accordance with Irish law, action may need to be taken now. Kildare-based solicitor Alvaro Blasco, who advises Irish people on Spanish property transactions and says it can be a “minefield”, says the new law is beneficial, but it means you will either have to make a will, or update an existing one, clearly indicating that you want Irish law to govern your estate. However, before making any moves it may be important to get tax advice also as, if people invoke the nationality rule, they may then find themselves caught in a tax nightmare.
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BIZ BRIEFS
More skilled workers coming to Ireland than are leaving
Euro zone industrial production stronger than expected
More than 3,000 startups formed in August as insolvencies fall by 46%
About 20% more skilled professionals came to Ireland than left during the second quarter of 2015, data scientists at LinkedIn have found. The software industry was the most popular sector for professionals moving to Ireland, reflecting the country's popularity as a destination both for European start-ups looking to expand and for US firms looking for an EU base. Healthcare and retail sectors also attracted foreign professionals.
Euro zone industrial production was stronger than expected in July, rising thanks to a higher volume of energy, capital and durable consumer goods, data from The European Union’s statistics office Eurostat released on September 14th, showed.
Company insolvencies fell by 46 per cent in August compared to the same time last year while more than 3,000 start-ups were formed, an average of 114 a day, new figures show.
But the company has urged government and the business community to do more to bring home skilled Irish people who have left the country to work overseas. Professionals who have left Ireland offer a wealth of talent in areas where the country faces skills shortages, the business networking site's senior human resources director for EMEA Wendy Murphy said. The company is working with the American Chamber of Commerce Ireland on strategies to encourage the return of skilled ex-pats.
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Industrial output in the 19 countries sharing the euro rose 0.6 per cent month-on-month for a 1.9 per cent year-on-year gain.
The data, from business and credit risk analyst Vision-net.ie, showed the number of insolvencies fell to 58 from 107. The construction sector experienced a 77 per cent decline in insolvencies to six compared with 26 in August last year.
Economists polled by Reuters had expected a 0.3 per cent monthly rise and a 0.6 per cent annual gain.
Dublin accounted for 52 per cent of all insolvencies although the number of failing companies fell to 30 from 51.
Eurostat also revised up data for June to a 0.3 per cent monthly fall from -0.4 per cent and to a 1.5 per cent year-on-year rise from the previously reported 1.2 per cent increase.
Clare, Kerry, Kilkenny, Leitrim, Louth, Mayo, Roscommon, Sligo, Westmeath experienced no insolvencies in August. Meanwhile, company startups rose by 22 per cent with a 34 per cent increase in business registrations. Professional services, social and personal services, and wholesale and retail were the three most popular sectors for new start-ups, Vision-net.ie said.
The July numbers were mainly driven by a 3 per cent monthly rise in the output of energy, 1.4 per cent higher volume of capital goods production and a 1.3 per cent increase in the output of durable consumer goods.
Stock Market Performance a Poor Reflection of China’s Real Economy Dr. Paul Egan On the 24th of August, the Shanghai Stock Exchange (SSE) fell by almost 9%, its largest one-day fall since 2007. This was followed by substantial losses on markets in Europe, the U.S., Japan, Australia and in China’s fellow emerging markets. It seemed that many investors believed that China, which for years had been the engine of growth in the global economy, was on the brink of a financial and economic meltdown. The headlines that followed had a clear message ‘Crisis in China to Sink the World Economy; China's Devaluation Pointing to Another Global Economic Downturn; Will China’s Ailing Economy Cause a Repeat of the 2008 Global Financial Crisis?’ It is true that as the world’s second largest economy, China has ever increasing financial and economic links internationally, and therefore, any developments or vulnerabilities will have an important impact on the health of advanced economies globally. This, of course, includes the Irish economy. While we have few direct links with China, many of our main trading partners do. This means that we would not escape the spill over effects of a weak Chinese economy. There is little evidence to suggest however, that China’s economy is slowing in any significant way from the 7% annual growth target set by the county’s leadership, the Chinese Communist Party (CCP). China is expected to reach its average wage growth target of 13% for the five-year period ending in 2015. Both real and disposable income are growing strongly at 7.6% and 9% year on year respectively, for the first half of 2015. Job creation, along with the consumption expenditure of Chinese households, has also grown strongly in 2015. These are hardly the symptoms of an economy on the cusp of an economic crisis. So what has caused some to reach for the panic button?
The events of the last few weeks were triggered by a surprise depreciation of the Chinese currency, the renminbi (RMB) on August 11th. The policies behind the value of the RMB (often called the yuan) have long been a contentious economic policy
issue. For years, China has tightly controlled the value of its currency by setting a daily rate versus the US dollar. It has been heavily criticised for this policy, particularly by the US, who have often accused China of manipulating the value of the RMB, keeping it undervalued to gain a competitive advantage. China now believes however, that the RMB is actually overvalued compared to the currencies of its main trading partners. Therefore, Chinese policy makers, in the spirit of liberalizing the controls over the RMB, have allowed market forces to play a larger role in its day to day trading.
The motivation for this liberalization by the central bank, the People’s Bank of China (PBOC), has been widely debated. A popular argument is that the PBOC devalued the RMB in an attempt to kick start its “floundering” economy by making its currency cheaper, thereby making its exports more competitive. This is an overly simplistic assessment, however. The move can instead be viewed as an essential reform that allows the market to determine the currency's value, something the Chinese have often been criticised for avoiding. A key consideration for this most recent reform is the bid to have the RMB accepted by the International Monetary Fund (IMF) into its baskets of reserve currencies, to gain what is called Special Drawing Right (SDR) status. This would place the RMB on the same level internationally as the dollar, the euro, the yen and the pound and would undoubtedly boost China’s global prominence. Internationalizing the RMB in this way has been a key goal for the Chinese over the last five years and this move can be viewed as further commitment to a more market oriented exchange rate, which will only improve its chance of success. It is also very important not to confuse the ailing Chinese stock market to the strength of its economy. Firstly, the relationship between the stock market and China’s real economy has always been particularly negligible. In many advanced countries, the
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stock market is one of the main indicators of the strength of the economy, and a large sell-off in equities could spell a rapid decline in an economy’s growth. The correlation between China’s stock market and the real economy is almost non-existent however. As a perfect example, between 2010 and 2014, when China’s economy was the world’s fastest growing, its stock market was consistently one of the world’s poorest performers. In fact, it has established a reputation for being an immature and underdeveloped market that is hindered by poor information about listed companies where insider trading is widespread.
Secondly, it is crucial to examine the developments that preceded events in August, particularly with regard to the prices on mainland China’s two stock exchanges, the Shanghai Stock Exchange (SSE) and the Shenzhen Stock Exchange (SZSE.) In the year June 2014 to June 2015 for example, the SEE rose by almost 150%, during which time the Chinese economy was actually cooling. There remains some debate as to the cause of such a rise, but it seems to be a combination of easing monetary policy by the PBOC, the availability of cheaper credit for investors and the relaxation of regulations which had previously restricted the investment of borrowed money. These policy actions, which were part of a broader plan to kick start the sluggish economy, appear to have boosted equity prices without really reflecting any significant change to the real economy. Instead, they appear to have encouraged a massive influx of small, amateur investors with little experience of equity markets. It is estimated that approximately 80% of the SZSE is comprised of these small individual investors. This is unlike most developed stock markets where large institutional investors are the by far the largest player. Therefore, the events of the past few weeks can be seen more as an adjustment for a period of speculative investment and a correction of overinflated equity prices, rather than any fundamental issue with the Chinese economy.
It must be stressed that the Chinese economy is facing a number of key challenges. China’s GDP growth has been in decline over the last three years. For almost three decades, China’s annual GDP growth averaged close to 10%. This dropped to 7.7% in 2013, 7.4% in 2014 and is expected to drop to 7.1% by the end of 2015. This has coincided with a rapid decline in China’s industrial sector. Growth in industrial production fell to 6% in August 2015, a far cry from the 15-20% witnessed during the late 1990’s and 2000’s. The heavy industries, that for so many years drove the Chinese economy, have fallen victim to declining demand and over-investment. Many of the ‘doomsday’ advocates cite this as the most significant sign of China’s impeding implosion. But these declines are both inevitable, and as it happens, necessary. The key point which is often overlooked is that China is intentionally moving away from the industrial sector as part of a new growth model.
The problem with China’s growth model over the last two decades has been that domestic investment and exports have played an ever increasing role in economic growth. This has corresponded with a decrease in the role played by consumption which stood at just 48% in 2014. This is unlike most developed world economies in which final consumption accounts for up to 70% of GDP. While this growth model brought great success and unprecedented growth, there is a consensus that it may now have exhausted its potential. If consumption cannot increase to play a much larger role in aggregate demand, given the constraints on exports and the limits to investment led growth, then there is a danger that China’s rapid growth will slow drastically in the near future. Therefore, the government is now attempting to shift the economy to one that is more reliant on consumer spending, the service sector and technology driven manufacturing. This shift will make China more economically independent, greatly improve its long term prospects and benefit the global economy as a whole. This will also, however, take time. The Chinese economy is currently in a stage of transition and development. Creating short term pain is therefore necessary. But this pain is in favour of a more balanced and market determined economy which will have far reaching positives in the long run. Therefore supporting and embracing this transition needs to be the central aim of policy makers both in China and globally. Dr. Paul Egan was awarded a PhD in Economics entitled "Essays on Inflation, Output & Monetary Policy in Post Reform China" from the University of Limerick which was funded by the Irish Research Council (IRC). Paul is a Teaching Fellow at the School of Economics & Finance. He completed a B.Comm (Economics) and a M. Econ Sc (International Finance) at the National University of Ireland, Galway.
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HIGH PERFORMANCE UNDER PRESSURE IN THE CORPORATE WORLD After 10 years in Banking, Conor McCarthy established a business based on a fascination he had developed in the area of high performance. This business (Kaizen Performance) is now working with some of the biggest companies in Ireland. Here, Conor explains how a motivation to combine his sporting life, his corporate experience and his academic interests lead him on a journey through some of the world’s most notable high performance environments and towards a realisation that high performance can be pursued with more than just lip service.
The Flight There’s a fascinating clip on youtube which simulates US Airways 1549. It’s the flight that crashed into the Hudson River in New York and the first time ever that a commercial airline flight had crash landed on water with zero fatalities. In this clip, the actual voice recording of the cockpit and the air traffic control is synched with a computer generated video of the plane in motion over the New York skyline. It paints a very different scene to the one that Hollywood would have us expect. There are no raised voices and no indication of bags flying wildly through the cabin. In fact, the voice of pilot Chelsea ‘Sully’ Sullenberger and the air traffic control crew is as measured and as clear as you would expect it to be on a routine flight. This 2 minute clip perfectly encapsulates the concept of high performance under pressure.
these values most. My starting point in terms of personal experience was such that I had reached a management position within the corporate banking world with BOSI and latterly with Certus. I had also played football for Cork for 8 years, played in an all Ireland final and won a few medals. But even in that, there was an element of regret in not having achieved more and besides I knew that the level of experience I had obtained up to that point wasn’t really enough in any case. There were also many ‘bluffers’ in the training and development space too and I knew that if I was to be valid in any way, shape or form, I had to experience genuine high performance across a number of domains. Access to these high performance environments appeared daunting but what I began to learn is that legitimate high performance environments appreciate learning and are often more than willing to share their experiences with people who they can be sure are only trying to learn more themselves.
That was back in January 2009 and for a guy who had a fascination with high performance; it really struck a chord with me. In the aftermath, Sully Sullenberger talked about how he not only loved his job but how he had always trained for scenarios that would happen in the real world, and not just in a training simulator. It convinced me that most battles in business, in sport and in life are won before they are actually fought. The question which I struggled with was this; how do you prepare for that level of high performance under pressure? How do you prepare to win first and go into battle second as opposed to going into the battle first and then seeking to win?
The Learning process I was hooked and wanted to know more. I decided to set about identifying other key areas of high performance and then seeing if I could visit the high performance environments which espoused
Learning In London
I started by trying to find out how one might communicate to corporate high performers in a way which resonated with them. In researching the executive education market, it became clear The London School of Business was the global leading provider in this area, a school where high achievers in industry went to get even better. I duly enrolled in their executive education programme on Forensic Financial Analysis. This comprised an intense week long period of learning, along with some very heavy pre and post
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reading. The fascinating part about watching high performers being educated to improve even further was that the content wasn’t the most important part. The real point of difference was the merging of the content with a guided discovery approach to education wherein these individuals came to the right answers in a way which felt almost self-directed.
The Dodger Way I researched the best list of companies to work for in the States and learned that on 3 separate occasions the LA Dodgers had been listed in the top 100 by Fortune Magazine, the only sports franchise on the list. I went there and spent some time with former owner Peter O’Malley. I came to understand how he and his father before him had engendered in his staff so much loyalty and attachment to the franchise that these people came to live their lives in ‘The Dodger Way’, not just at work but at home and at play as well.
Pressure is Necessary The one thing I have learned about any group of people working towards a common goal is that in order for high performance to occur, there has to be pressure. We spend a lot of time and sometimes money, trying to avoid the concept of pressure like it’s a disease, when in actual fact; it’s entirely necessary if genuine high performance is to occur. Without pressure, it’s easy. We’re in the comfort zone. The best in the world however accept the pressure, its not that they don’t feel it, they simply manage it better. When they start to coast, they know they must be going downhill.
Conor with Peter O'Malley of The LA Dodgers
Culture in New Zealand I continued by reading voraciously on the subject of high performance and when the All Blacks won the rugby world cup in 2011, it came to represent another brilliant example of high performance under pressure. In the book Legacy; What the All Blacks can teach us about the business of life, James Kerr describes how the group delivered when the expectation and circumstance was at its most intense. I learned that it wasn’t their size or their speed or their skill alone which had generated this victory, in fact it was the cultural transformation that the New Zealand rugby side had undergone which transformed them from world cup under achievers to winners in 2011. Eventually, I managed to convince my wife to go to NZ on honeymoon so that I could spend an additional two weeks in that All Black environment after the honeymoon part of the trip was over.
The Psychology of High Performance When an opportunity came up for redundancy within the Banking world, I made the decision to go for it. High Performance was becoming big business but again there was going to be a need to ground myself in the academic theory if this was going to be a credible career choice. So I undertook a Masters in Applied Psychology and Coaching by night in UCC. As with any course, the real learnings were generated through life experience and the practical focus which had been obtained through the high performance environments I had visited. The final piece of the jig saw (for now) will be a visit to the Navy Seals in Coronoda Island at the end of October. Whilst there, there performance psychologist Ryan Maid will try to explain to me the method behind their seemingly torturous training programme, and more importantly what makes those recruits get through it.
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Conor with Richie McCaw
Engagement has to Resonate How do they manage it better and how can these areas be coached into a group of people in a corporate setting? It starts with Engagement - the narrative in most companies is that the workforce feels they are over worked and underpaid. However, there is in fact very little evidence to suggest that increasing wages will in fact lead to greater levels of engagement within a workforce. It may even be counter productive. What’s more, most firms simply cannot afford to increase wages across the board. Labour is simply too expensive. In any case, money may not even be the answer. In his book on motivation entitled Drive, Daniel H. Pink asserts that the secret to engagement is the deeply human need to direct our own lives, to learn and create new things, and to do better by ourselves and our world. Indeed, a significant body of evidence has now emerged which suggests that a well structured, coherent engagement or wellness programme will increase morale, lead to greater levels of motivation, generate a greater sense of attachment in the company and ultimately lead to greater levels of productivity and engagement. The key point of difference between effective and ineffective programmes tends to be in regards to the level at which these programmes are adapted specific to the needs of each particular organisation. One size does not fit all. Engagement surveys are useful as a snap shot diagnostic
but they can often make for bleak reading, no matter how many times they are re-taken in an effort to get to ‘the right answer’. To move forward, companies will need to genuinely link in with the workforce’s motivational triggers and so a composite profile needs to be established. What is the broad demographic range? How active are they? What really drives them? Through a relatively mindful diagnostic phase, a company should then and only then be able to integrate a well structured and coherent engagement programme with its staff.
Training must be for The Real World
While engagement is one side of the performance improvement equation, skill acquisition or training is the other. In business, like sport, certain core skills in the area of management, leadership, service, sales and strategy are needed to by even the fittest, most engaged workforces. However, these skills need to work beyond the training room, back in the office and in front of clients. Basically, they have to be performed under pressure. This is why most training simply does not work. The courses we go on and pay a lot of money for tend to centre on a large manual which gets moved from the pedestal to the garage, to the attic to the bin. Training in any domain must start with the fundamentals of performance under pressure which is exactly what the real world entails. For content to be effective thereafter, it has to be simple, structured and memorable in order to generate an alignment and a commonality of approach so that the collective knowledge and experience of staff is harnessed for the challenge ahead. At its very core, that’s what high performance means for me. Generating engagement amongst a group of people in a meaningful way and integrating a level of skill acquisition for the real world rather than just the training room. As Sully Sullenberger might say, you gotta love your job and then prepare for that job happening in the real world, not in the simulator.
Conor McCarthy BIO Conor McCarthy is the Director of Kaizen Performance, a company which specialises in engagement and training programmes for the Corporate Sector. Conor received a Bachelor of Commerce Degree (1st class honours) from University College Cork (UCC) in 2004. After starting his career through the Bank of Scotland (Ireland) Graduate Programme, Conor spent 10 years progressing successfully in the commercial banking industry. During this time, Conor worked on significant projects with Lloyds Banking Group and Permanent ptsb, whilst also becoming a fully regulated financial advisor. During this time, Conor maintained a successful inter county football career whilst also completing further executive education at the London School of Business and The Irish Management Institute. In 2014, Conor undertook a Masters in Applied Psychology (Coaching) at UCC and has put this experience, along with significant further research into the area of high performance, to good use in his role at Kaizen
Cyber attack insurance policies could reap billions The cyber security market is growing at considerable pace with online crime rates doubling in Ireland in 2014. A newly published report by Pricewaterhouse Coopers (PwC) estimates the global value of the insurance market in the sector could reach €4.4 billion in annual premiums by 2018 and rise to as much as (€6.6 billion) by the end of the decade. Its research found 61% of business leaders across all industries see cyber attacks as a threat to the growth of companies. Last year, there was an average of 100,000 security incidents every day. An Ireland-specific survey for 2014 found such incidents had nearly doubled with 62 % cent of business leaders expecting them to increase further by the end of next year. The developing nature of the problem is providing challenges for the insurance industry, as outlined in the report. In order to embrace the developments, PwC said insurers should “robustly model” exposure and loss scenarios, identify systemic risk and partner with technology companies and intelligence agencies to “develop a holistic and effective risk evaluation, screening and pricing process”. Data sharing between insurers and a combined effort to coordinate risk management would also be of value.
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Gaining Competitive Edge Through Hiring:
2015 and Beyond
The professional recruitment market is continuing to show strong growth as we approach the closing quarter of 2015, particularly across the IT and finance sectors. Overall companies remain cautiously optimistic in their hiring outlook, conscious of the need to attract and retain talent, while sensitive to any uncertainty within the global economic environment.
Overall Hiring Highlights
11% more professional jobs available this August compared to August last year. 3% increase in the number of professionals entering the jobs market, compared to August 2014. There was a 15% increase in the number of IT roles available in August, compared to the previous month. In Financial Services, regulatory changes continue to drive demand for professionals with risk and compliance backgrounds. An uptake in the requirement for corporate finance professionals was underpinned by the growth of M&A activity in the Irish economy. August recorded a 33% increase in the number of roles for supply chain professionals. Investment in the pharma and life sciences sector is driving this requirement. Procurement and planning professionals were the most sought after. In Cork manufacturing growth in the FMCG, dairy and nutrition sectors is driving job creation. The buoyancy in this sector is stimulating the creation of new roles in finance, operations, quality control and HR. Hiring organisations are likely to find it difficult to identify strong candidates in the months ahead as the number of graduates and trainees hired during the economic downturn was lower than usual and this is now having a knock-on effect. Companies that try to recruit through their own HR teams will find it especially tough in the current environment. At Morgan McKinley we are relying heavily on the network we have built up in our disciplines to identify quality candidates and to provide market insights.
About Morgan McKinley in Ireland Irish owned Morgan McKinley is a global professional recruitment consultancy connecting specialist talent with leading employers across multiple industries and disciplines. With offices across Ireland, the UK, EMEA, Asia and Australia, its professional recruitment expertise spans the accounting & finance, financial services, technical and IT sectors. Morgan McKinley is a preferred supplier to many of the major employers in its specialist sectors and thousands of smaller local firms.
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The Return of the Tiger If you have an economic boom and then a recession, it’s a really good idea to have another boom as soon as possible. Garvan Grant takes a wry look at the birth of ‘Tiger Two’ You may not have heard the news yet, but it looks like the current recession is coming to an end. Yes, it’s been a tough few years, with lots of austerity, austerity and more austerity, but now we can apparently put all that behind us and pretend it never happened.
It has just been discovered using numbers, equations and strange mathematical symbols that recessions actually go in bust-and-boom cycles and that this one, like every other one since the Big Bang, was always going to end. In fact, if someone had bothered to mention to the last few governments that the boom was going to end, something could have been done to make the recession just a little less harsh. However, that might just have just got in the way of spending like there was no tomorrow. But, of course, there was a tomorrow – although now tomorrow is almost yesterday and today is nearly tomorrow. (Don’t worry if you don’t get all this: economics is pretty tough to follow sometimes.)
Obviously, our government cares very deeply about all Irish jobs and only a cynic would suggest that the most important jobs for them in 2016 are the 100 or so they currently have in Leinster House. Also, we might once again hear of crazy things like people coming to Ireland to find work and that people are signing off the dole as it actually makes financial sense to have a job.
2. Property, property, property Was there anything more interesting during the Celtic Tiger years than listening to people talk about property prices? Apart from watching very old paint on a very old wall get even drier?
As we take our first tentative steps towards ‘Tiger Two’, here are ten sure signs that we may be heading for another boom:
1. Jobs, jobs, jobs With an election coming, expect lots of good news on the jobs front. Members of the government will also be pitching up at every jobs announcement from here on in. For example, both Taoiseach Enda Kenny and Tanaiste Joan Burton did a photo-op at the local chipper yesterday morning where the DiMario family had just decided to allow Little Tony to work in it on weekend nights.
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If it’s starting again, you can be pretty sure we’re heading for another boom. Now, as shooting people is still more or less illegal in Ireland, you will have to take other action to stop this incessant chat. Your three choices are to inform them you have just bought an island in the Caribbean, say you actually live in a small car near the M50 with nine other families or shoot them anyway and hope for a nice judge. Interestingly, you may also notice that what were ghost estates just a couple of years ago are now being described in property supplements as: “Modern, luxurious and quiet family-friendly estates with a range of beautiful new houses which are all named after trees and stuff.”
3. Mediterranean mishaps It has been conclusively proven that there is little if any connection between a growing economy and better weather conditions (or international sporting prowess). However, that will never stop Irish people from pretending that they live in a country with a normal climate as soon as we hear there’s another boom coming. All summer long, we’ve been getting out there in our shorts, sitting outside our trendy cafes and wearing sunglasses – often when it was lashing rain, quite windy and generally grey. We are a hardy bunch and give us some extra cash and we will make sure the weather will never get in the way of us being sophisticated and rather European.
4. Expanding Did you hear that US multinational MobStats is setting up its European headquarters in Ballyrickets? And that NetRex is hiring 400 people at its manufacturing plant in west Cork? And that CyberMonix is going to need 80,000 people to work in its call centre in Meath? In fact, they’re even planning to turn Meath into one massive call centre.
Now, however, with things improving, people will once more be able to quaff Bollinger from glass slippers. Coffee beans will have been eaten and defecated by small Asian rodents before they are roasted in private roasters installed in new helicopters. People will also be able to buy horses once again instead of just sticking their last €2 on a tip so if it wins, you can actually afford to buy dinner for a change. Yip, the excesses of the previous boom will be back in fashion very soon and if you can’t beat them, you may have to join them. Or emigrate.
6. Spinning out of control As mentioned above, the two government parties will be at pains to tell us all that things are great and getting greater and that if we just re-elect them, we can have another boom – though this one really will last forever. Apparently, Fine Gael and Labour have even hired a bright, young politician to help them figure out how to make Irish people vote for them in 2016. His name is Bertie Ahern and he apparently has a lot of experience in this area. However, they won’t, of course, be bribing us to vote for them as that would probably be undemocratic and perhaps even illegal. No, they will just be giving out as much cash to as many people as possible in order that we vote for them. Oh wait . . .
7. Talking heads If we have discovered one thing in the last 15 years, it’s that you can never have enough economists. They have become an essential part of our society and nearly every economist in the country is also a ‘celebrity economist’, which is really nice for them.
Yip, when technology firms with no actual products begin expanding in Ireland, you can be pretty sure another never-ending economic boom is coming our way. In fact, the best thing might be to form your app development firm today, float it on the stock tomorrow and retire by next weekend with a cool €30 million in the bank.
But what qualifications do they have? The answer: who knows? Which is why, with a new boom coming, you too could be a celebrity economist. If you have read the papers or watched the news over the last decade, you probably know as much as any of them. So just start offering your services to papers and radio stations. Make sure you pepper your articles and commentary with words like ‘fiscal’, ‘deflation’, ‘GDP’ and ‘non-price determinants of supply’ and you’ll be fine. With a bit of imagination, you can probably have a lot of fun too.
5. This is the life
8. Water, water everywhere
During the recession, it was back to drinking Buckfast, buying coffee from the local shop and pretty much giving up champagne, cocaine and betting millions of euros on horse races.
As you may have heard over the past couple of years, a lot of people aren’t too happy about the new Irish Water charges.
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The government will be hoping that the new economic boom will stop all the protests and it is believed that Irish Water even plans to capitalise on the extra money in people’s pockets by offering new services. This includes having sparkling and flavoured water piped into your house – or if you want the deluxe package, you can have a very fine Chardonnay delivered straight to your tap.
made, “whole”, organic, natural, “slow”, artisanal, pure, distilled, fermented, free-range, grass-fed, paleo, ketogenic, cold-pressed and pulled to within an inch of their lives. You won’t even be able to avoid those terms in your local fast food joint, with even Supermac’s probably offering cow-friendly beef burgers.
They are also apparently offering a very special new product which they are calling “Pure Organic Homemade Unfiltered Irish Water”, though you may know it better as rain.
The only thing to do to stay sane will be to eat crisp sandwiches on white bread with a 2-litre bottle of “cola”.
10. Talking about the Irish
9. Getting posh
And, yes, once again Ireland will be the talk of the world. People are already praising us for our ability to endure recession and come out the other side, so next up we will be lauded for creating a boom out of nothing. Just like last time.
Like with our coffee, alcohol and water, you will know that a boom is once more upon us when our food gets all posh-sounding again. No longer will we eat “sandwiches”; they will be homemade, hand-
It will all be about record growth. Just like last time. It will be about the Irish economic miracle. Just like last time. And it will be talked about as another never-ending economic boom . . .
Garvan Grant Garvan Grant is a journalist, editor and author. He wrote the hugely popular PostMortem column in The Sunday Business Post and recently brought out The Trueish History of Ireland (Twitter: @TrueishHistory), a warm, witty and funny celebration of Irish history. You can follow him on @garvangrant
IRELAND TOP OF THE RANKINGS FOR ATTRACTING HIGHER-VALUE INVESTMENT Ireland has extended its sequence of topping the global foreign direct investment rankings to a fourth consecutive year. Foreign direct investment has long been a cornerstone of the economy with its low corporation tax and highly-educated, English-speaking workforce among the key reasons companies which now employ more than 160,000 people locate here. The latest Global Location Trends report compiled by IBM finds Ireland continues to attract investment projects in industries such as life sciences and information and communication technology. Ireland pipped Switzerland to top spot in the report with Sweden, Denmark, Lithuania and the Netherlands next in line. Meanwhile, Ireland also topped the EU employment statistics table again. The number of people working grew at a faster pace over the last year than in any other EU country, according to the latest statistics from Eurostat. However, for the second quarter of this year, the country was outpaced by countries where employment was hit worse than Ireland during the crisis, Portugal, Greece and Spain. Employment growth in Ireland was at 0.9% whilst unemployment fell to 9.5% in August, the first time in seven years it fell below 10%.
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Meet the Team Thomas J. Brooks
Roni Collins
Partner
Partner
Jim qualified as a Solicitor in 1972 and commenced his professional career with the late Liam Collins Solicitor. He immediately set up a litigation department and quickly earned a reputation for being an able and skilled litigator throughout the County of Cork. Jim specialises in litigation and leads a very strong energetic and specialised team dealing with all types of litigation.
Lorna Brooks
Karen Crowley
Partner
Solicitor
In keeping with a family tradition Lorna qualified as a Solicitor in 2005. She then went on to obtain a Masters Degree from the University of Sheffield in Biotechnological Law and Ethics focusing on areas of reproductive technologies, genetic privacy, stem cell research and GMO’s. Lorna works in the litigation department and has gained considerable experience in all areas of litigation in all Court Jurisdictions.
Karen trained with the practice and qualified as a Solicitor in 1993. She graduated from UCC with a BCL Degree in 1990. She worked in general practice for a number of years before specialising in Conveyancing and her area of practice focuses on Residential Conveyancing, Farm Transfers, Probate, Succession Law and Capital Taxation Karen is a member of both the West Cork Bar Association and the Southern Law Association.
Emma O’ Brien
Michelle Murphy
Solicitor
Solicitor
Emma graduated from UCC in 1997 with an Honours BCL, qualified in 2000 and has developed a general practice. The focus of her work at the moment is Residential and Commercial Property Acquisition, Sale and Lease, Will drafting and Estate Planning. Emma has also acted for a number of developers of housing estates. She also looks after General Commercial Advice and Transactions as well as Liquor Licensing.
Beibhinn Murphy Solicitor Bebhinn graduated from UCC with an Honours BCL in 1998 and received a Higher Diploma in Marketing and Management 1in 999. Bebhinn qualified in 2005 and practices in all areas of Litigation, with a particular interest in Employment Law, Personal Injuries and Debt recovery. Bebhinn is experienced in Private Client and Commercial Litigation for both Plaintiffs and Defendants ,in all court Jurisdictions as well as, Alternative Dispute Resolution, including Arbitration and Mediation.
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Having graduated from UCC with a BCL degree in 1984 Roni trained with Collins Brooks, qualifying as a solicitor in 1988 and becoming a partner in 2005. She has worked in all areas in the practice but specialises in residential, agricultural and commercial conveyancing. She also heads up the firms Probate Department in addition to advising in the area of Wills and Estate Planning.
Michelle is a solicitor in our private client department specialising in buying, selling, leasing and mortgaging all types of residential, commercial and agricultural property, Wills with Tax Planning and the Administration of Estates. Michelle has extensive experience acting for a broad range of clients. Michelle graduated from the University of Limerick in 1997 with a BA in Law and European Studies and qualified in 2001.
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