Commodities best investment in first quarter but copper disappoints
WITH the first quarter of 2014 over, it's time to take stock.
Here in Ireland, soaring property prices, returns on commercial rents and a buoyant stock exchange are making Ireland an attractive location for investors.
Another sign that the country's financial woes are abating is in the yield on Ireland's 10-year government bonds, which has fallen from 3.545pc on January 1 to 3.08pc or half the Greek equivalent.
While residential property prices have started to ease in the capital since the turn of 2014, homes and apartments remain almost 9pc higher than a year ago – with February recording the ninth month in a row to show a rise.
Experts now predict that recovery in commercial property sales will spread from Dublin to the rest of the country this year, with January and February the busiest months in years as demand continues to grow.
Returns on Irish commercial property reached a seven-year high last year, while rent for prime office space is also as high as €377 per square metre in Dublin's city centre.
The Irish Stock Exchange has also risen by almost 10pc since the start of the year and – at 4539.43 – has only dipped slightly since it hit a record 52-week high at the end of February.
Overall, the benchmark has jumped by more than 25.9pc over the past year.
Elsewhere, other investments have proved popular, with commodities and frontier market stocks among the best-performing investments in the first quarter of 2014. Shanghai and Tokyo shares, as well as copper, were among the duds.
The Reuters-Jefferies CRB commodity index, which is made up of 19 key commodities, rose 9pc. The gains came after the index's 5pc drop last year.
Gold has risen 7.3pc, following a 28pc drop last year. Investors turned to the safe-haven asset when tensions between Russia and the West escalated over Ukraine.
The MSCI frontier equity index advanced 7.2pc, with buoyant growth in newly developing economies spurring portfolio inflows. It also benefited from investors shifting out of major emerging markets, which have been hit by a stimulus wind-down from the Federal Reserve. Italy's 10-year government bonds also did well for investors, rising 7pc to beat returns from German and US counterparts.
High-yielding peripheral eurozone debt has been rallying thanks to the region's recovering economies, with Italian yields hitting eight-year lows last Friday.
Concerns over China have weighed on many markets geared specifically towards the world's second biggest economy.
Copper was the biggest victim as it bucked other commodities to fall nearly 10pc. The metal hit a three-year low last month after a bond default by a Chinese solar panel marker stoked fears about more defaults, unravelling demand for copper as collateral in financial deals.
Meanwhile, Tokyo's Nikkei index fell 7.2pc on a dollar basis to become the second worst performer in the past three months. One of the top investments in 2013, the Nikkei unwound some of last year's 30pc gains as the economic slowdown in emerging partners and caution over a VAT hike in Japan pushed investors away.(Additional reporting Reuters)