Northern Ireland wind farms have been bought by a Chinese firm
There is no doubt that there have been a number of political upsets over the last year. It is less clear if the new era being ushered in is the best of times or the worst of times. Opinions are subjective and may depend on the timeframe.
In the short-term, Tughans has been involved in a significant number of deals in the last 12 months. We recently were ranked as the number one Northern Ireland legal adviser in 2016 by Experian. We have been ranked number one for the past two years, having advised on 31% of all deals in Northern Ireland last year — 38% more than the next placed legal adviser. And our work represented 62% of total deal value in Northern Ireland for 2016.
This high transactional activity could be attributable to a number of short term factors, such as the drop in the exchange rate.
The weak pound has meant Northern Ireland export businesses can be more competitive. They are also more attractive for foreign buyers and investors, offering better value. People recognise that the main impact of Brexit and the election of Donald Trump as US President may only be really felt in the longer term. Brexit, after all, is at least a two-year process and investors may have the opportunity to successfully realise a return on their cash before the UK’s exit from the EU can have a detrimental effect.
In the longer term, we wait to see what the impact of Brexit, Trump and the upcoming Stormont election will have on the sustainability of deal volume and deal values. It is the epoch of belief, with Brexiteers seeing the UK’s exit from the EU as an opportunity to negotiate more favourable trade deals and unburden business from constraining EU regulations. Equally, it is the epoch of incredulity, as Remainers continue to argue that these trade deals could take years to negotiate, bringing uncertainty for the economy and businesses.
Deregulation for Northern Ireland businesses exporting to the EU is not a reality, having to continue to comply with at least some EU regulation.
Incredulity also stems from our 24/7 news feeds and omnipresent social media, as businesses have to sift through “alternative facts” and “fake news” to evaluate the impact of political decisions on their business strategy.
Will Trump reduce corporation tax in the US, making Northern Ireland investment less attractive, especially if Stormont fails to meet the conditions for setting our own rate of corporation tax?
Should we look east rather than across the Atlantic for investment and export opportunities? Recent Asian investment in Northern Ireland, with the acquisition of SDC Trailers by Chinese company CIMC and CGN’s acquisition of 14 wind farms across Northern Ireland and the Republic, demonstrates the eastern interest and potential for our businesses.
Northern Ireland businesses may be waiting in eager anticipation but some trepidation as the political events take their course.
What isn’t an option is standing still. We need to identify the opportunities, tailor our strategies and businesses to maximise the possibilities but try to safeguard against the risks that might arise. Tughans will review the opportunities and challenges facing Northern Ireland business in the next few months to consider how best to weather the storm.
Let’s look to a spring of hope and forget about a winter of despair, with everything before us.