Quiet optimism as ISEQ up 16% in 2009

THE value of Irish shares have risen for three months in a row, according to new figures.

After rising again in May the ISEQ index which measures the value of the shares listed on the Dublin exchange has gained 16.2% in the year to date.

As modest optimism takes hold the ISEQ has now rebounded 42% off the 2009 low reached in early March.

Whether this represents a major rally is hard to tell, given the uncertainty about the future of the Irish banking sector and the huge slow down in economic activity.

There was a glitch in the figures, however, as the index under- performed the FTSE Eurofirst 300 index by a marginal 0.2%, which it has outperformed by 12.1% overall in the year-to-date.

Signs of the modest pick-up in the market to end May were further underscored as the ISEQ closed higher than its 200-day moving average – the first time it has done so since July 2007.

All segments of the index achieved growth, but the performance of the banking sector, ravaged by the credit crunch and the collapse of the Irish property market, stands out.

Financial stocks led the way, gaining a further 74.2% following the strong run of the previous two months.

The ISEQ data issued yesterday by the Irish Stock Exchange (ISE) shows strong performances across all sectors with 45 of the ISEQ’s 59 constituents gaining on the month.

Irish banks, having lost 95% of their value at one point during the downturn, outperformed the European sector by 63.0% on the month and by 13.9% year-to-date.

Emerging markets continued to outperform over the period as investor confidence continued to be sustained. The MSCI world emerging markets index climbed 12.1%, while developed markets advanced a more modest 5.2%.

The ISE also launched three new indices yesterday. They offer further index coverage and investor profile, as well as benchmarking of the performance of companies trading in the Irish equity market.

The ISEQ IEX Index shows year to date return of over 40%.

It will track the performance of the 25 Irish-based companies which trade on the Irish Enterprise Exchange – the market for smaller growth companies.

Those companies, which currently have a combined value of over €780m, will be weighted in the index based on their market capitalisation which is the overall value of their shares.

The range of companies is wide and includes food companies to service related businesses.

A review of the performance of that index in the year to date shows that a €1,000 investment on January 1, 2009 would be valued at over €1,400 today, a return of over 40%, indicating the growth of this sector in the Irish market.

Worldspreads Group chief executive Conor Foley said his company was delighted with the latest developments.

The ISE is also launching two new ISEQ® 20-based indices to enhance its service offering.