ISEQ Round Up

By Gavin Yates

Despite the ISEQ having risen by 2.8% since the beginning of the month, trading conditions remain volatile on the Irish market. The month began amidst one of the most important weeks of the year in terms of global economic data. Investors, who had become very bearish on the economic outlook in recent weeks, were finally offered something to cheer about as both the ISM manufacturing index and the US non-farm payrolls both came in well ahead of expectations. The ISEQ saw gains of almost 4% on the back of these announcements as fears of a double-dip recession were abated.

The following week saw the ISEQ lose some of the gains, as investor sentiment towards Ireland declined due to fears over the strength of the Irish banks and the impact that the banking bailout will have on the government finances. Financials dragged lower with AIB and the Bank of Ireland down by 8% and 13% respectively. The plan for an Anglo Irish Bank funding bank and asset-recovery bank eased worries as investors were finally given some clarity on Anglo Irish Bank’s future.

The strong economic data and an increase in load factors allowed the airline industry to post strong gains, as Aer Lingus was up by over 6%. Donegal Creameries’ share price jumped by nearly 12% as H1 results gave confidence that the company will achieve full-year earnings well ahead of expectations. CRH continued to be a macro play, but failed to follow the performance of its peers with Barack Obama announcing additional spending on infrastructure. As the ISEQ continues to trade in its current range, any break will only come with an improvement in the global economy and more clarity on the banking bailout.

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