Retail Savings and Investments in Ireland - Coronavirus (COVID-19) Sector Impact

Retail Savings and Investments in Ireland - Coronavirus (COVID-19) Sector Impact

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with most countries across the world registering declines in their economic growth for the year to date. Many economists and institutions have cut their forecasts, as a number of countries officially slipped into recession in Q1 2020.

Similarly, the Irish government’s measures to contain the virus’ spread have significantly impacted the country’s economy, with Ireland now facing a worse recession than in the aftermath of the 2008 financial crisis. However, with the phased reopening now in progress, consumer spending is expected to rebound in the second half of the year, and the gradual revival of the economy will eventually benefit the savings and investments industry.

This report focuses on the impact of the coronavirus outbreak on the Irish economy and the country’s retail savings and investment market. It also highlights the measures adopted by the government to combat COVID-19. Based on our proprietary datasets, the snap shot contrasts the publisher's pre-COVID-19 forecasts and revised forecasts of total retail bond, deposits, equities and mutual funds holdings in terms of value and growth rates. It also analyses the effects on HNW wealth, examining the importance of different industries as a contributor to HNW wealth.

Scope

• Ireland’s total retail savings and investments market is forecast to contract by 4.8% in 2020. While the performance of ISEQ20, Ireland’s flagship index, started to revive as a result of the gradual easing of lockdown measures across the country, the fragile state of Ireland’s economy coupled with fears of a possible second wave of COVID-19 cases will continue to weigh heavily on demand for risk assets throughout the year. Retail equity and mutual fund holdings are expected to take the brunt of the economy’s slowdown, with respective declines of 20.5% and 15.9% anticipated.
• Deposits already account for the majority of household savings in Ireland and will grow as a result of the pandemic, mitigating much of the losses suffered by holders of equity and mutual funds. According to Euro Area Statistics, deposits increased by 9.9% in May 2020.
• Bonds and other products such as prize bonds will also see growth in 2020, although their small role in the overall savings and investments mix means their impact on the value of the overall Irish market will be modest.
• While Irish high-net-worth (HNW) individuals’ invested assets are at risk from market volatility and recession, the COVID-19 outbreak and lockdown will have relatively little negative impact. The three main industries generating HNW wealth in Ireland are all areas that have reasonably bright prospects, even through the accompanying recession that will follow this crisis.
• Finance (driven by a growing role for Dublin in international banking following Brexit), healthcare (boosted by government investments due to the virus), and technology (boosted by a greater reliance throughout the economy on digital and remote solutions) will all grow their share of the Irish HNW market.

Reasons to Buy

• Make strategic decisions using top-level revised forecast data on the Irish retail savings and investments industry.
• Understand the key market trends, challenges, and opportunities in the Irish retail savings and investments industry.
• Receive a comprehensive insight into the retail liquid asset holdings in Ireland, including deposits, mutual funds, equities, and bonds.