ISEQ falls despite strong day’s trade
Despite a strong day, Ireland’s ISEQ Index fell 0.7% at close while national benchmark indexes sank in all of the 18 western European markets.
Bank of Ireland lost 3.9% as its EGM on recapitalisation took place.
Irish Life & Permanent gained 4.4% to €1.19, while AIB fell 0.1%.
Elan fell back 7.9% to €5.20 after a surge yesterday on takeover rumours. Earlier, Japanese share prices closed up 1.8%, tracking gains on Wall Street.
The Nikkei-225 index gained 156 points to 8,636.
France’s CAC 40 dropped 1.8% and Germany’s DAX slid 1.3%. Britain’s FTSE retreated 0.7%.
Meanwhile, Merrion Stockbrokers said it is recommending four Irish stocks which will benefit from any equity market and economic recovery but will also provide relative defensiveness through attractive valuations and strong balance sheets in the interim.
It picked CRH, Ryanair, Kerry Group and DCC.
The ISEQ has declined almost 80% from its peak in February 2007.
“In our view, the recovery in the Irish equity market (excluding the banks) will be more influenced by policy actions outside of Ireland and the direction of global equity markets than events domestically,” said Merrion.
On Ryanair, Merrion analyst John Mattimoe said the present aviation downturn will significantly improve Ryanair’s strategic position and the visibility of its volume growth prospects.
“Return on capital is set to improve, in the short-term, due to lower fuel costs and unit cost reductions and thereafter by a modest firming in the yield environment,” he said.
Mr Mattimoe also said that CRH remains capable of generating over €1 billion of annual free cash flow through the downturn.
