The pressure has resumed on Irish firms that depend on selling their goods and services to Britain.
Sterling has slipped again, as the Bank of England prepares to pump money into the UK’s financial system after the shock Brexit vote a week ago.
Any sharp fall for sterling, against the euro, hits small- and medium-sized exporters hard, because it hugely erodes their profit margins on exports across the Irish Sea.
While many Irish stocks bounced back from the sell-off induced by the Brexit shock, the pressure remained on Irish exporters.
Sterling fell against the euro yesterday, to 83.7 pence, dragging the currency 7% lower since June 23, the eve of the vote.
The Iseq index of shares climbed for a third day, by 2%, but remains almost 10.5% below its June 23 level.
Some of the big names on the Dublin exchange, which earn much of their income in the UK and are therefore vulnerable to a droop in the value of sterling, continued to reflect stress from the Brexit vote.
Bank of Ireland traded yesterday at 18 cent, down a third from the 27 cent on referendum day, on June 23. The bank is now valued at €5.82bn, almost 50% less than this time last year.
Shares in Ryanair, however, soared 5%, to €11.89, but have nosedived from €13.68 on the eve of the vote, and are down 21% this year.
Analysts had said the airline, whose chief executive, Michael O’Leary, had prominently campaigned on British media for a Remain vote, could face a potential hit, because it makes a large chunk of its sales in sterling.
Ferry company, ICG, rose 4.6% to €4.40, but has lost almost 19% of its value this year. Meanwhile, the FTSE 100, along with other European stock markets, climbed by 1.2%, yesterday, and stands 4% above its eve-of-poll level.
“Anyone suggesting that markets would hold up well this week, let alone rally in the impressive way they had, would probably have been dismissed as just an attention-seeker, but, once again, going against the herd has proven to be the wisest choice,” said Chris Beauchamp, senior market analyst at online trader, IG.
“Yet again, consensus opinion was proven to be incorrect. The chance to pick up choice shares on the cheap was evidently irresistible,” he said.
IG said stock markets would still be looking out for any Brexit fallout next week, “but at least there will be some other events to focus on”.
Alan McQuaid, chief economist at Merrion Capital, said Irish indicators published last week, reflecting the economy here before the Brexit vote, showed “good news”.
These indicators encompassed house prices, retail sales, and surveys of manufacturing. But in a sign that the Brexit vote could still reverberate across the EU, Czech president, Milos Zeman, yesterday called for a referendum on the country’s membership of the EU and NATO.
He said he supported remaining in both blocs.
The Czech Republic benefits as an EU member, because it receives more funds than it contributes, while NATO provides security guarantees in fighting international terrorism, Mr Zeman said on public Czech Radio.
Still, he said he would do everything to initiate a referendum, “so people can express themselves.” The government rejected the president’s suggestion.
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