€33 billion wiped off stock market in 12 months

ALMOST €33 billion has been wiped off the value of Irish shares over the last 12 months with almost €23bn slashed from banking stocks alone.

Last year saw one of the worst ever performances in the Irish stock market when it lost €26bn in value. This coupled with further losses of €7bn since the start of the year has resulted in losses of €33bn in the year to the close of the markets last night.

Yesterday, Irish Life& Permanent chief executive Denis Casey described the sharp fall in Irish financial shares in recent months as a “huge over-reaction” and stated that in time the markets will again recognise the underlying strength of both the Irish economy and Irish financial institutions.

Addressing the Leinster Society of Chartered Accountants, Mr Casey defended Irish banking stocks and said: “Irish banks were treated savagely by equity markets during 2007.

But in time the markets will again come to recognise the underlying resilience of both the Irish economy and of our financial institutions.”

Mr Casey also said Ireland’s economic position was fundamentally sound and resilient.

“A low level of public debt, low taxes and low unemployment mean that we have the cushions to accommodate a more challenging environment,” he said.

Following losses totalling €4bn on Tuesday, the Irish markets fell further yesterday after heavy losses in the US overnight. The ISEQ index shipped 41.56 points to close the day at 6,574.07 — a loss of 0.6%.

The Irish banks, however, had a positive day for the most part with AIB gaining 20c to €14.70, Anglo-Irish also rose 20c to €9.85 and Irish life and Permanent continued the trend up 30c to €10.70.

It was also a negative day for the construction stocks with CRH dropping 75.5c to €24.02 and Kingspan 32c to €8.80.

Athlone-based pharmaceutical firm Elan shed 18c to €17.62 despite positive results announced by its Tysabri development partner Biogen Idec.

Food products companies IAWS and Kerry Group lost ground, shedding 19c and 31c respectively to finish the day at €12.81 and €17.69.

Meanwhile, Tokyo’s Nikkei index yesterday plunged 4.7% to end at 13,099 after heavy overnight losses on Wall Street.