Stock rallies 2.3% as Aer Lingus advances on bid speculation

IRISH stock rallied 2.3% yesterday in their first full day of trading since Christmas.

Britain also became the first equity market among the biggest developed economies to recover its loss from Lehman Brothers Holdings’s collapse as raw-material producers and banks rallied.

Aer Lingus advanced 7.8% following reports that Ryanair will probably make a third bid for the airline.

Ryanair chief executive Michael O’Leary has held recent discussions about making another offer, the reports said. They didn’t give any price for a potential offer. An Aer Lingus spokeswoman declined to comment when contacted.

Aer Lingus stock has plunged 60% this year, reducing the company’s market value to €320 million.

Ryanair offered €1.40 a share for the airline late last year in its second unsuccessful takeover bid. Mr O’Leary has said Aer Lingus is misleading investors about the Dublin-based airline’s ability to prosper.

The FTSE 100 Index rose 0.7% to 5,437.61, the highest closing level since at least September 12, 2008, the last session before Lehman filed the world’s biggest bankruptcy.

Meanwhile, Ireland is likely over the worst of one of the industrialised world’s deepest crises but will make up only modest ground for much of 2010 before there are clear signs of improvement, a Reuters poll showed yesterday.

The median forecast in a poll of nine economists was for a deficit of 11.5% in 2010 and 9% in 2011, both revised in by 0.5% from last month’s poll but still well above the 3% level allowed by the EU.

The economists see Ireland’s budget deficit finishing 2009 at 11.7%.

“The worst is probably over and 2010 is likely to see only a modest improvement as the year progresses,” said Austin Hughes, chief economist at KBC Bank said.

“By end year, clear signs of an upswing should emerge and this should translate into a slightly healthier trend in domestic spending and jobs in 12 months time.”


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