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Chinese bitcoin mining rig makers aim to raise billions in HK IPOs

Three of the world’s largest bitcoin mining equipment makers plan to raise billions of dollars with initial public offerings in Hong Kong, even as other companies report plunging demand for the chips needed to make bitcoin and a halving in the price of the cryptocurrency.

Soaring cryptocurrency prices last year triggered a boom in demand for specialist mining chips and in developing “mines” – facilities with thousands of machines that create the coins by solving complex mathematical puzzles.

Yet the US chipmaker Nvidia Corp said this month that second-quarter sales to crypto miners totalled just $18m, compared with $100m expected by analysts.

Nvidia’s chief financial officer, Colette Kress, said she anticipated “no contribution” to revenues from cryptocurrency in coming months.
That has raised concerns about the upcoming Hong Kong listings by three Chinese manufacturers of bitcoin mining equipment, Bitmain, Canaan and Ebang International Holdings.
The companies all design high-end computer chips intended for mining cryptocurrencies, particularly bitcoin, and sell mining equipment containing the chips. In addition, Bitmain mines cryptocurrencies on its own account. Companies like Nvidia also sell specialty chips used for mining.

“The marked decline in the price of bitcoin since the start of the year is likely to weigh on investors’ interest in these companies,” said Benjamin Quinlan, CEO of financial services consultancy Quinlan & Associates.

But, he added, “the fall in the price of bitcoin from its peaks has not been matched by an equivalent fall in the numbers of people mining it.”

Bitcoin is currently trading at $6,699, down 64pc from its December 2017 peak of $18,690. Daily mining revenue was 77pc lower than in December, according to, a data analytics and wallet provider.

“As the bitcoin price decreases, so does the profitability of mining itself, which decreases demand for mining chips and miners,” said Wang Leilei, a consultant at financial services consultancy Kapronssia.

It is not just the price of bitcoin that is causing worries. People close to the IPOs said regulatory scrutiny and a patchy performance by Hong Kong offerings this year were additional concerns.

Julian Hosp, president of TenX, a Singapore-based blockchain firm, has also warned that if coins switch mining algorithms, then the machines designed to mine them would become useless.

“I would be quite wary of investing in these miners,” Hosp said, referring to the equipment makers. “They are not long-term businesses and I think they’ve had their uptrend for now.”

Canaan and Ebang filed plans in May and June respectively for floats in Hong Kong, while Bitmain is expected to file its plans next month for an IPO in which it aims to raise at least $3bn, sources close to the deal said.

Cryptocurrency trading is a global activity, but Chinese chipmakers have led the way in developing the most efficient means to mine the coins.

Bitmain had three quarters of the market for the specialist chips last year, followed by Canaan on 14pc, according to estimates by analysts at Bernstein.

Ebang is aiming to raise up to $1bn, according to sources, while Canaan is targeting at least $400m – down from a figure of up to $2bn touted earlier this year by people involved in the deal.

While EBang is expected to face Hong Kong’s listing committee in September – a key approval needed for marketing the IPO – Canaan’s offering is taking longer.

Two sources familiar with Canaan’s situation said the company had not yet fixed a date for a committee appearance, as it worked on clearing up questions from HKEX officials regarding due diligence done on its prospectus.

A source close to Bitmain’S IPO said the company was aware about the potential for close regulatory scrutiny.

Bitmain, Canaan and Ebang didn’t respond to requests for comment. A Hong Kong exchange spokesman declined to comment.

The bitcoin price slump is leading miners to consider their IPO sales pitches carefully, with many involved expecting them to push the potential of other uses for their chips.

Both Canaan and Ebang highlight the potential for their technology to be applied to other cutting-edge sectors.

That includes broader development of blockchain applications – the ledger system that underpins bitcoin and which is being widely explored by the financial industry – as well as artificial intelligence tools and the forthcoming build-out of 5G telecoms networks both within and outside China.

“The mainland government encourages chip design and production, as that is a segment of China’s market that has been suffering,” said Kapronssia’s Wang.

“Bitmain and Canaan chips could also be used for non-bitcoin applications, like blockchain in general, big data, cybersecurity or AI, which is an advantage for the companies.”

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Euro tipped to near parity with sterling under hard Brexit

Sterling will fall to 95 pence to the euro and approach parity in the early part of next year if a hard Brexit is still on the cards, according to analysts at Investec Ireland.

Currency volatility, and unfavourable rates, are a big risk to Irish exporters into the UK, particularly in lower margin sectors including food.
Weakness in sterling versus the euro also potentially hurts the overall competitiveness of the Irish economy.

The euro will strengthen to 95 pence versus the pound by the end of the year, and 97 pence in the second quarter of 2019, if there’s a hard Brexit, according to Investec’s head of treasury, Aisling Dodgson
That view is based on a UK exit from the EU without a transition period or agreement on regulatory alignment and Britain leaving the EU customs union.

It does not allow for an even more destabilising so-called worst-case scenario – where planes don’t fly and medicine supplies run out.

An alternative scenario, of an orderly transition, would boost the pound – to 87 pence in the final quarter of this year and 88 pence versus the euro in early 2019, Investec thinks.

With scant progress in talks to date, traders are increasingly pricing in a harder scenario.

Sterling fell to 90.390 pence per euro on Friday – an 11-month low.

“The markets increasingly sense that the risk of no deal is greater. I don’t think anyone would really suggest otherwise,” Aisling Dodgson said.

“At the end of the day our baseline case is if you strip it down to fundamentals it’s in no one’s interest for there to be no deal, but there are a couple of situations where you could see relationships breaking down,” she added.

Infighting – and lack of communication – within the UK’s ruling Conservative Party is now a major issue, she noted.

Conservative backbencher – and Brexit hardliner – Jacob Rees Mogg was lambasted over the weekend for holding up the Troubles-era Border regime as a model for post-Brexit controls.

“There would be our ability, as we had during the Troubles, to have people inspected,” the Tory MP said.

“It’s not a Border that everyone has to go through every day. But of course for security reasons during the Troubles, we kept a very close eye on the Border to try and stop gun-running and things like that,” he said at a meeting in the UK.

The Foreign Affairs Minister Simon Coveney branded the comments “ill informed”.

The uncertainty around Brexit is starting to weigh on sentiment here, according to Bank of Ireland’s regular ‘Economic Pulse’ sentiment tracker.

The index, which combines the results of consumer and business sentiment gauges, weakened in August versus July and compared to August last year.

Bank of Ireland’s chief economist, Dr Loretta O’Sullivan, linked the more subdued mood to uncertainty around the Brexit negotiations, coupled with renewed sterling volatility.

“Amid political divisions in the UK government and the EU’s lukewarm response to elements of the White Paper (setting out the UK negotiating position), there has been increased chatter about the possibility of a ‘no deal’ outcome to the negotiations. This is weighing on sentiment and is also impacting currency markets.”

There is now just over a month until the initial deadline for Europe and the UK to reach a deal.

However, the talks are deadlocked, with a failure to settle arrangements that square the circle of the UK government’s agreement to retain an open Border on the island of Ireland, with its plan to leave the European customs union.

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Pension model doesn’t have to be perfect, but we must act now

The retirement model for Ireland is changing after various false starts – a change that is long overdue. A sustainable retirement system with feasible dependency ratios requires that workers save more and retire later.

We won’t get a perfect system overnight, so having one that’s “good enough”, at least to start, is an important priority.

The key thing is to take the first step and raise pension coverage immediately, or risk further delays in reform.

That’s why the publication this week of the Government’s consultation paper on supplementary pension provision in Ireland has the potential to be such a landmark moment.

It’s critical that we grasp the nettle with both hands and take decisive action to increase supplementary pension coverage in this country.

The Government’s Roadmap to Pensions Reform, published in February, set out important measures to improve the financial security of Irish people in retirement, such as evolving the state pension age and the introduction of automatic enrolment.

Measures to improve the adequacy of the State pension can only be good news. However, with only around 35pc of Irish private-sector workers enrolled in occupational pension schemes, we can’t stop there.

We’re not the only country facing a timebomb when it comes to pensions – this is a global issue.

In setting off on a path of reform though, we have the advantage of being able to follow in the footsteps of other countries that have gone before, replicating some of what works and taking lessons from what does not.

Our nearest neighbours took this route only a few years ago. More than 10 million UK workers have been enrolled in DC plans since 2012, when employers were required to enrol staff in a workplace pension, and experience in the UK has shown that, once members are auto enrolled in a well-designed scheme opt-out levels are extremely low – at fewer than one in 10.

Appreciation of human behaviour needs to be at the heart of pension policy and is key to the successful implementation of any scheme.

A successful automatic enrolment system requires a well-designed ‘default’ investment strategy that people will not be inclined to opt out of.

Expecting ordinary citizens to make investment decisions that will impact on their future financial security is a big ask, and may not be welcomed by many.

People may struggle to choose appropriate investments, and indeed research this year showed us that only 32pc of Irish DC members knew what their pension was invested in.

That’s why a default option that is well-diversified, good value and appropriate for the life stage for the saver in question is so important.

We will be faced with many tough questions at the start of this journey: are the measures being proposed going to be enough; will the contribution level be high enough; what approach do we take to increasing contributions over time; is there a better default strategy that we could design?

We’re not going to get all of this right on the very first attempt.

‘Good enough’ is an is an important priority here. A ‘perfect’ system will not be established overnight, so it is important to take the first step and raise pension coverage immediately, or risk further delays in reform.

As we progress on the path we can tweak and adapt as the system becomes established.

Consider a country like Australia, which has one of the strongest mandatory superannuation schemes in the world.

Contribution levels there now stand at 9.5pc and are scheduled to increase to 12pc and in time they will probably wish to go higher.

Similarly, the situation in the UK is evolving as time passes. Since April 2018 total minimum contribution rates stood at 5pc and this will increase to 8pc in April 2019, with many commentators suggesting further increases after that.

Auto enrolment is one of a suite of measures proposed in the Government’s Roadmap to Pensions Reform.

The roadmap comes at a time when dependency ratios are increasing and fresh approaches to better managing longevity risk and rectifying deficits in pension provision are hugely important.

We all know we need a sustainable retirement system. Now is the time for action.

Ann Prendergast is Head of State Street Global Advisors in Ireland

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Without decent European investment yield lenders are looking to the US

September in the European corporate debt market is often a time of much rejoicing. The dearth of activity in August is replaced by a flood of issuance, tightening spreads, and a general feeling that bonds are back.

Not this time. This August has been particularly miserable, and almost all of the factors that made it that way have every reason to continue.

Only 13 new deals have completed so far, and the spreads – reflecting the cost of borrowing – on about half are wider than when they were issued. The market isn’t completely closed – big name issuers such as Volkswagen and Commerzbank together priced about €4bn of new securities – but that’s about it.

But you can see why. Yields in Europe can be non-existent, but for the same credit quality you can get a decent pickup in the US dollar corporate bond market. The Federal Reserve’s insistence on rate increases this year have driven the Treasury yield curve significantly higher compared with many European equivalents (Italy being a recent notable exception).

It’s not just the underlying rate – the average US investment grade corporate spread is nearly double the average for the bloc.

There are some technical factors that make euro-denominated new bond sales less attractive for investors and issuers alike.

The region’s corporate bond market has long had a friend in Frankfurt. The European Central Bank’s corporate quantitative easing program has absorbed €166bn of investment-grade issuance since June 2016, out of nearly €790bn of securities that meet its criteria for purchase.

This prop is soon to be taken away. As of next month, the ECB will halve its Asset Purchase Program from the current €30bn, and stop it altogether by the end of the year.

Any further corporate bond purchases will be subject to money coming in from maturing holdings that need to be re-invested.

It is going to be a tough wrench seeing the biggest buyer in the room step away. Average spreads over benchmark government bonds may already be showing the strain.

And there’s more bad news. Euro-denominated bond sales by US companies are down 80pc this year compared with 2017, Bloomberg News reported. Issuance hasn’t even cracked €10bn. That’s largely because US President Donald Trump’s tax reforms encouraged firms to repatriate overseas cash, and that money is starting to flee back to American shores.

This has reduced the need for US companies to issue offshore in decent size – this year they have slipped from being the biggest issuers of euro-denominated investment grade bonds to fourth place. And the trend will only get worse. Invesco estimates that only $400bn has come onshore so far, out of a total $1.5 trillion.

And cash-rich American multinationals such as Alphabet, Microsoft and Apple will also be taking back money they’d previously used to buy European securities, shrinking the pool of potential buyers of new issues.

Finally, there’s the impact of the turmoil in Italy and Turkey. Political difficulties in both countries have stoked unease in government bond markets, which has spread to other countries to varying degrees. That volatility makes for an uncomfortable environment to raise money.

All this means the September rebound in new issuance volumes will probably be pretty modest this year. Companies that don’t need to issue will probably stay away.

There’s one factor from this August that won’t repeat itself in September. Everyone will be back from their holidays.

This simply means there will more people around to see the abyss staring back at them

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Comment: Hiking VAT on tourism would raise Brexit stakes

Each year, at about this time, there is a lot of speculation about the 9pc tourism VAT rate and whether it will be retained in October’s Budget to be delivered by Finance Minister Paschal Donohoe.

Each year, at about this time, there is a lot of speculation about the 9pc tourism VAT rate and whether it will be retained in October’s Budget to be delivered by Finance Minister Paschal Donohoe.

So will the 9pc rate be kept this year? Or will it return to the rate of 13.5pc, which was last in effect in 2011? The truth is that no one knows for sure and in reality it will probably be a late decision made by Cabinet running up to Budget day.

Referring to the 9pc rate as a “preferential” rate or a VAT “subsidy”, as some commentators do, is an inaccurate analysis. Often this is followed by a spurious reference to the “cost” of the measure whereas in fact the tourism VAT rate has been massively beneficial to the Exchequer. According to the Revenue’s own figures, in the first full year of the 9pc VAT rate (2012) income to the Exchequer was €630m; in 2018 the income is anticipated to be €1.04bn as a result of the increased activity in the sector. So rather than being a cost, the 9pc tourism VAT rate is extraordinarily good for the national coffers.

The fact is that Ireland’s tourism VAT rate is finally in line with the rest of Europe – 16 of 19 eurozone countries have tourism VAT rates of 10pc or less so Ireland, in this rare case, is fully competitive with other destinations. To increase the rate would make us less competitive at a period of uncertainty with Brexit around the corner. It would add cost to the system at the very time when we need to keep a close eye on our value for money ratings.

The latest wheeze being considered, supposedly in response to Dublin hotel rates which have risen as tourist demand outstrips the supply of new hotels, is some sort of a two-tier VAT where bigger hotels pay a higher rate than smaller ones.

How this might work, or even how many bedrooms defines a “bigger” hotel, is difficult to see and crucially there is a real danger that an increased VAT rate will have damaging knock-on consequences for the pipeline of new hotels that are finally being delivered; 5,000 new bedrooms in Dublin alone over the next three years according to CBRE. These hotels are vital in order to add capacity and accommodate growth and crucially will mean demand and supply are in sync, moderating any future consumer price increases.

Any further increase in costs is likely to depress demand and damage Ireland’s largest indigenous sector. The tourism industry – hotels, attractions, restaurants, B&Bs, caravan and camping sites, activity providers and many others – can rightly point to the fact that, since its introduction seven years ago, the 9pc VAT rate has helped tourism and hospitality businesses create thousands of jobs. Recent analysis by the Irish Tourism Industry Confederation (ITIC) shows a remarkable 79,100 jobs have been created in the tourism and hospitality sector since 2011.


The good news is 68pc of those new jobs are outside of Dublin and in the regions. No other industry can come close to this sort of performance and if tourism is the great regional jobs producer then surely it should be supported and nurtured with appropriate taxation and investment policies.

Earlier this year, ITIC produced an eight-year roadmap for the sector entitled ‘Tourism: An Industry Strategy for Growth to 2025’, within which tourism is set ambitious goals to grow overseas earnings by 65pc. However, that is only possible with a number of enabling factors in place and one of those is the retention of the competitive 9pc VAT rate. Now is not the time to meddle with a successful formula that has worked so well and has so much more to offer.

And back to Brexit, that great external shock that risks knocking Ireland’s wider economy off kilter. ITIC’s analysis identifies that a hard Brexit will cost Irish tourism €260m in its immediate aftermath. That is some knock, and tourism is uniquely exposed to Brexit with 40pc of all international visitors coming from Britain.

Soft, hard or medium-boiled, Brexit won’t be good for Irish tourism and Mr Donohoe must be mindful of this when he delivers the Budget. The 9pc VAT policy has been unambiguously positive on a variety of fronts – jobs, regional balance, Exchequer receipts, industry growth. Leave well enough alone, minister.

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Contactless card payments increase

Consumers are turning more to debit cards and contactless payments, according to the Central Bank of Ireland (CBI).

In the past three years, the number of debit-card transactions has increased rapidly in Ireland, the CBI said in its latest quarterly bulletin.

There is also some tentative evidence to suggest that the increase in their use has come at the expense of credit cards and cash transactions.

The rise in popularity of debit-card transactions is due to the increasing availability of contactless-enabled payment terminals and contactless debit cards.

Last year, contactless transactions accounted for just over 80pc of the 152 million increase in payment volumes, according to the Banking & Payments Federation Ireland’s latest ‘Payments Monitor’.

While contactless payments may be on the increase, the average payment per contactless transaction remained small at €12.24 in the final quarter of 2017, and, according to the CBI, this figure has remained stable.

Debit cards account for almost all contactless transactions, indicating an increasing use of debit cards for small-value payments where previously consumers may have used cash. In addition, there has been a marked slowdown in the volume and value of ATM withdrawals since 2016.

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Businesses failing to prepare despite no-deal Brexit fear

The vast majority of Irish businesses still do not have a Brexit plan in place, despite 70pc of firms expecting the UK’s departure from the EU to have a negative impact on Ireland’s economy.

AIB’s Brexit Sentiment index for the second quarter found that the manufacturing, retail and tourism sectors here were the most negative about Brexit.

Just 6pc of 500 businesses surveyed in the Republic of Ireland had a plan in place. In Northern Ireland, the figure was just 5pc.

The index found that larger businesses were more likely to have a plan, while the impact on the economy and potential tariffs were the main concerns for businesses in the Republic.

AIB’s head of business banking Catherine Moroney said it was “critical” for businesses to plan for the worst now.

“When businesses do seek financing, one of the key questions we in AIB ask them about is their Brexit-readiness and the potential impact Brexit may have on their business in a harder-line Brexit scenario,” she said.

Ms Moroney said the bank was launching a new credit-check service to help customers who were looking to increase their export reach.

Provided in association with Euler Hermes, the bank will allow customers a free risk assessment on five potential or existing overseas clients.

The idea is to provide greater peace of mind by gauging the likelihood that the overseas clients will pay their bills.

“Our local Brexit advisers are in place to support and assist businesses to navigate through Brexit and I encourage businesses to contact their local AIB to discuss how we can support their Brexit-readiness,” Ms Moroney said.

The bank also has a €122m allocation of funds as part of the Government’s Brexit loan scheme.

AIB found that in the Republic, food and drink businesses were most likely to have a plan in place (11pc), followed by tourism (9pc) and then transport (7pc).

AIB chief economist Oliver Mangan said the index’s readings in terms of sentiment had been fairly stable over recent surveys.

“This is reflective of the lack of any major new developments over the survey period in the Brexit process. While a somewhat limited proportion of SMEs are reporting a negative impact on business now, the lack of progress and clarity in relation to Brexit and the uncertainty is also evident in the survey results,” he said.

“Indeed, in the Republic of Ireland, the negative headline reading is being driven by concerns regarding the impact on business in the future and on the wider economic impact.”

Talks will resume between Dominic Raab, Britain’s Brexit secretary, and Michel Barnier, the EU’s chief negotiator, in Brussels tomorrow.

Mr Raab will give a speech on Thursday setting out the UK government’s plans for a no-deal.

“Securing a deal is still by far the most likely outcome, but we want to make sure that we clearly set out the steps that people, businesses and public services need to take in the unlikely event that we don’t reach an agreement,” he said.

Britain will recognise some EU regulations in the event of a no-deal Brexit to ensure that the country does not grind to a halt, the ‘Telegraph’ reported over the weekend.

Government papers setting out what will happen if the UK leaves without a deal make clear that Britain will adopt a “flexible” approach to ensure that EU medicines, car parts and chemicals are still available in the UK.

The approach will, however, leave the UK open to claims that it is giving up some negotiating strength by agreeing to accept EU goods without ensuring that British goods will be accepted on the Continent. (Additional reporting © Daily Telegraph, London)

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This is a frightening prospect for the thousands who have worked in Britain

In common with many people in this country, both my parents worked in Britain in the 1950s and 1960s.

My late father spent 10 years as a radio officer in the British merchant navy. For this he got a good defined benefit pension when he hit 65. He was also entitled to a British state pension.

My mother, a nurse, did her midwifery training in Scotland and worked there when she was qualified as a midwife. This entitles her to a British state pension. She gets a sterling amount paid into her AIB bank account here every month, and we file a tax return for this, for her, every November.

There are thousands of people in this country who are in receipt of pensions from their time working in bars, on the roads, in the hospitals, on the buses and in the offices of England, Scotland and Wales.

It is known that around 120,000 Irish people are in receipt of a British state pension.

Many more are entitled to one but may not be drawing it down because they are not aware they could get it.

There are no clear figures on the numbers also getting private pensions paid to them, which would include both Irish and British nationals.

Now it has emerged that Brexit poses a threat to these pension arrangements.

A leading pension provider has written to its Ireland-based members warning them it may no longer be able to make payments into bank accounts in this country once the UK leaves the European Union, which is scheduled for next March.

The Association of British Insurers has issued similar warnings.

The insurer, Pension Insurance Corporation, has explained that it is currently using EU “passporting” arrangements that allows British firms to provide financial services, such as paying a pension overseas, to anywhere in the EU.

It advises its members

here to open a UK bank account. But that is not something that is possible if you do not have a UK address.

This is a frightening prospect.

It means people here may no longer have their pension paid into an Irish bank account. Instead, the payments would be paid into a UK bank, which they will not be able to access unless they have a UK account.

As this issue is set to affect retired British people living in the EU, the hope is a last-minute deal will be done to sort it out.

Although there has been a lot of incompetence shown in the UK’s Brexit preparations so far, sense will just have to prevail and a deal of some sort will be done.

It could be that pension cheques will be posted here for a period if a deal is not done by the time Brexit happens.

For now though, there is no need to panic.

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Rents hits record-high as it’s now €274 more per month than Celtic Tiger peak

THE monthly cost of renting a home has hit an all-time high, shooting up by an average €200 in some parts of the capital in just the space of a year

New figures from today lay bare the dilemma facing families who would be better off financially if they bought a home.

But difficulties with saving a deposit or securing a mortgage, or a shortage of properties to buy, continue to haunt the housing market.

It means many are locked into a life of renting, while rents are still furiously spiralling.

The average national cost of renting nationwide in the three months to June was €1,300 a month, a rise of €274 a month on the previous peak, which came just after the boom in 2008. The cost of paying the landlord is now €560 more a month than the low in the rental market seen in late 2011.

Costs have been rising now at double-digit rates for more than two years.

But rents are even higher in Dublin, where there has been an average annual increase of 13.4pc. The cost of renting in the capital is now up almost €500 on a decade ago, a surge of 34pc.

It is now around €2,000 a month for accommodation in parts of Dublin.

Many areas of the capital have seen average rents go up by about €200 in the past year.

Using the latest figures, Brokers Ireland calculated that the difference between rent and mortgage costs can now be negligible.

Rachel McGovern, director of financial service at Brokers Ireland, said it displays, in stark terms, just how seriously would be home owners are losing out financially.

She said it “demonstrates that for anyone with a medium to long-term interest in living in Ireland, it’s a no-brainer that owning a home as opposed to renting one is financially the most prudent financial option – that is if you can acquire a suitable property”.

“Home ownership achieved at an affordable price is central to the growth of personal wealth over the longer term.

“The lack of suitable properties available for purchase is a travesty, it is a policy failure that will have long-term implications.”

The frightening new figures also come as thousands of students will be scrambling for accommodation ahead of the new academic year and on the back of Leaving Cert results.

Student unions said young people would be forced out of third-level education due to the rental crisis.

There was a chink of good news in the report, with a slight rise in the number of properties for rent. There were 3,070 properties available nationwide on August 1.

This marks an increase of almost 5pc on the same figure a year ago.

However, aside from this month, the total availability is the lowest on record going back to 2006.

The small increase nationally was driven by Dublin, where availability improved from 1,121 to 1,397 comparing August with a year ago.

Elsewhere, availability continues to fall.

Ronan Lyons, economist at Trinity College Dublin and author of the report, said the building of new homes appears to be having some effect in the housing sales market.

However, that is not reflected in the rental sector.

“While urban apartments make up almost all the net need for new homes in the country as a whole, just 13pc of new homes completed in the year to March were urban apartments. This means it was unsurprising to see rents rise once more.”

Across the country, there are even higher percentage rises than in Dublin, although from a lower cost base.

Outside the five main cities, rents rose by an average of 10pc.

In the rest of the country, it now costs €909 a month to rent a property to live in.

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Banks no longer using SBCI’s SME loan scheme

The country’s main banks have stopped using a State fund set up to channel low cost finance to SMEs, because lenders can access cheap money in their own right, the Irish Independent has learned.

The Strategic Banking Corporation of Ireland (SBCI) was set up to ensure favourable loan rates reached SMEs, by funnelling State-sourced money through the banks, who could then pass on the benefits. Irish SMEs pay some of the highest borrowing costs in Europe.

But SBCI chairman Conor O’Kelly – also chief executive of the National Treasury Management Agency – said banks were bypassing the SBCI because they have access to low interest rates on the open market.

The comments are contained in a letter to Finance Minister Paschal Donohoe and released under Freedom of Information rules.

“We have previously reported that the prevailing low interest rate environment has diminished the SBCI’s financial advantage for banks,” the letter states.

“This has been evident of late among the SBCI’s bank on-lenders, as Bank of Ireland has prepaid €50m of its loan facility, and Allied Irish Banks and Ulster Bank have fully deployed their facilities and are not seeking further loan facilities at present,” Mr O’Kelly’s letter says.

The SBCI also has a number on non-bank entities on board to take money and pass it on. The letter, dated September 22 of last year, said the SBCI was “committed to developing its pipeline of non-bank on-lenders to continue driving choice for SMEs”. However it has not secured a new on-lender since November of 2016.

Initially the lenders were responsible for repaying the SBCI, but the State body then went on to develop so-called “risk-sharing” products, where it is also on the hook if loans go bad.

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