Market sentiment steady as government talks continue

Joe Brennan, Mark Hilliard

Ireland's ongoing efforts to form a government have had no impact on market sentiment to date, Minister for Finance Michael Noonan said on Thursday morning.

Mr Noonan said he was continuing to monitor the situation closely and added that while the “pipeline is strong” for foreign direct investment, political uncertainty could impact if it continues.

"There will be a government I think in the next number of weeks. Things are moving slowly but satisfactorily," he said on his way in to address the Ireland Strategic Investment Fund (ISIF) in Dublin.

“There is no perceived change in market sentiment towards Ireland either from the election results, the lack of a government or Brexit.

“But we have been watching it on all fronts and it is not delaying foreign direct investment. The pipeline is strong.

“The IDA tells us there isn’t any inhibition on investment. We are very conscious that a long period of political uncertainty always leads to economic uncertainty.”

Although not personally involved in the negotiations, Mr Noonan said talks were progressing well with Independents but he could not offer a timeline for expectations on the formation of any agreement.

The ISIF is expected to commit a further €750 million to investment this year, bringing total commitments to about €3 billion.

Ahead of Thursday’s event, the fund reported “solid progress” in its multiyear investment programme since its establishment 16 months ago.

Mr Noonan also addressed the ongoing Apple investigation before the conference, saying Ireland had either given the latest tranche of evidence to the European Commission last Friday, or would do so this Friday.

Regarding the sale of AIB shares, he said the next government would have to make a decision shortly after its establishment but would only sell in a strong market.