Iseq index outperforms in 2023 thanks to huge climb by Ryanair shares

Irish bank shares rise may have run its course, while Kingspan at €14.2bn has overtaken Kerry Group in terms of market worth

Ryanair shares climbed 58% this year in anticipation it will generate annual after-tax profits of €2bn.

The Iseq index of Irish shares has risen 24% through the year, marking one of best gains for European stock markets, but the performance is mostly thanks to huge gains secured by Ryanair, as the run for Irish bank shares appears to have run its course.  

The gains compare with the modest rise of 3% posted by London's Ftse-250 shares index, which includes companies that generate a large proportion of their earnings in Britain, and the respective gains of 16% and 20% secured by the Cac-40 index in Paris and by the Dax index in Frankfurt.  

However, the huge performance of Ryanair, which helped the airline's shares climb by 58% this year in anticipation it will generate an annual after-tax profit of €2bn, has helped drive the Iseq index. 

Moreover, Ryanair, with a market valuation of €22bn, is an increasingly significant component of the Iseq index after building products giant CRH switched its main stock market listing from Dublin to New York, where it has a capitalisation of almost €44bn. 

Following their huge gains last year, shares in AIB and Bank of Ireland had an uncertain 2023 as the European Central Bank relented this autumn on its cycle of hiking interest rates. 

ECB president Christine Lagarde: The European Central Bank relented this autumn on its cycle of hiking interest rates. File picture: Michael Probst/AP

With minimum levels of competition in Irish banking, the profits of the banks here are particularly tied to interest rates because they can in time pass on ECB rate hikes to their household mortgage borrowers and business customers, while limiting payouts to deposit holders. 

The prospect of ECB rate cuts next year appears to be already weighing on the Irish banks.

AIB shares have gained 5.5% this year to value the lender at €10bn, and Bank of Ireland's have declined 7% for a valuation of €8.8bn. 

Meanwhile, insulation products maker Kingspan at a stock market value of €14.2bn has overtaken foods giant Kerry Group in terms of market worth. 

Kingspan shares gained 54% in 2023, which compares with the 7% decline for Kerry that values the foods firm at €13.7bn. 

Shares in Smurfit Kappa have risen 3.5% this year to value the international packaging giant at €9.3bn. 

The earnings of Smurfit and other packaging firms are closely watched to assess the health of global manufacturing.