Hopes that the 1 per cent stamp duty levied on share dealings might be reduced or eliminated to make the Irish stock market more attractive to international investors have been firmly rebuffed by the Minister for Finance, Mr McCreevy.
Speaking after the publication of a major study by consultants Peter Bacon & Associates on the future of the stock market, Mr McCreevy said: "There is constant lobbying to reduce it and I haven't been able to accede yet. I won't do it in the Finance Bill but it is kept under review."
The reduction or removal of stamp duty on share dealings is one of the main recommendations in the Bacon report on the stock market. Stamp duty on share dealings is thought to generate around £180 million (€229 million) in revenue for the Exchequer.
The Bacon report itself warns that the Irish stock market faces a steady outflow of business unless it makes a number of fundamental changes to the way it conducts its business. The report's author, Dr Peter Bacon, issued a stark warning when he said yesterday: "Unless effective steps are taken urgently, it is likely that capital markets activities in Dublin will falter and the dynamic will move elsewhere, probably to London."
Dr Bacon warned that scepticism, particularly in Britain, about the sustainability of Ireland's economic boom was one factor behind the poor performance of the Irish market. Irish Stock Exchange chief executive Mr Tom Healy said the exchange has already taken steps to implement two of the key recommendations in the Bacon report - the introduction of electronic share trading and joining a European alliance of stock markets.
Mr Healy said that, by the end of next year, the Irish Stock Exchange would be a member of the European alliance, which currently comprises eight international markets including London, Frankfurt, Paris and Milan. He also said it would have full electronic trading in place by the end of 2000.
Mr Healy added that the exchange accepted that it has to make the local market more attractive to those high technology companies which currently favour the Nasdaq market in New York when taking a listing.
