Key banks hit by pre-NAMA volatility

PRE-NAMA volatility hit the banks again yesterday, with the share price of the two main beneficiaries of the proposed “bad bank” project falling back from gains made on Friday.

Comments from Finance Minister, Brian Lenihan – before a Dáil Committee, yesterday – that the Government would attempt to pay for assets only at current market values, followed talk over the weekend that NAMA payments to the banks could be made on a phased basis, resulted in both of the main banking stocks falling yesterday.

AIB fell by nearly 5%, or 13c, to €2.67 (down from a closing price of €2.80 on Friday) and Bank of Ireland shed nearly 8%, or 21c, to fall back to €2.50; after reaching €2.71 on Friday. The ISEQ, as a whole, was down by 0.61%, yesterday, closing at just over 3,096 points.

All in all, the ISEQ has grown by more than€13 billion over the course of the first eight months of this year. It finished August with a combined value of €45.4bn; up from €32.33bn at the start of January. The combined share value of the market’s financial stocks grew from €3.2bn to €6.53bn over the same timeframe.

McInerney Holdings – the housebuilding group – fell by 8% (2c) to 23c on the back of shortening its first half pre-tax loss to €12.8m, but upping its total losses after exceptional items to €170.9m.

Kerry Group fell by 10c to €18.25; while Paddy Power lost 1.79% – or 35c – to €19.25. Tullow Oil fell by 37c – losing nearly 3% – to €12.50.

Overseas markets were stung slightly by sharp overnight falls in Asia, which raised concerns that China (despite performing better than many of its international counterparts) could have difficulty in mounting an economic recovery. As a result, there was a 1% fall on the Paris CAC; a slightly smaller decline in Frankfurt’s DAX and similar movements in the US on both the Dow Jones and the Nasdaq. London’s FTSE market was closed due to the bank holiday weekend in Britain.

Elsewhere in Dublin, Independent News & Media (INM) was up by nearly 5%, yesterday, at 28c and Irish Life & Permanent (IL&P) managed to gain 15c to close at €4.75. Fruit distributor Fyffes was another positive mover – gaining nearly 7.5% to reach a closing price of 49c.

Kenmare Resources, meanwhile, gained nearly 4% (closing at 29c) on the back of a positive set of interim results – including details of a lowering of its first half losses.