ISEQ set to reach record level

THE Irish stockmarket is on course to end the year on a record close today after hitting fresh highs yesterday.

The ISEQ index touched 7,360 at one stage - nearly 28% more than the low hit in April of this year. Since the beginning of January, the index has gained 18%.

And the market is expected to rise further next year with the country’s top companies set to report record earnings.

Though the ISEQ has had an impressive run since the low of 5779 on April 28, it has lagged the returns of other European bourses.

Its performance has once again been hit by the problems with Elan, which saw its shares plunge in February after the withdrawal of its drug Tysabri.

But brokers believe the ISEQ’s good run will continue, with Davy Stockbrokers forecasting it will hit 8,500 by next June.

This year’s increases have been driven by the financial sector with the country’s main banks all strongly ahead.

AIB shares were at 18.40 yesterday, more than 20% up on the year. Anglo Irish Bank has gained close to 40% in 2005, while Bank of Ireland is up 10%.

The other big winners this year are building materials giant CRH and budget carrier Ryanair.

Davy Stockbrokers are tipping AIB, Anglo Irish, Ryanair, CRH and Bank of Ireland for double-digit growth in 2006.

All eyes in the market will be on the affect of the release of funds from Special Savings Incentive Accounts. The money should boost consumer spending and benefit companies in the construction, leisure and travel sectors.

And the ISEQ should be helped by the arrival of new companies.

According to brokers at least half a dozen new firms should float on the ISEQ in 2006, with Aer Lingus expected towards the end of the year.