Good Afternoon ,
The biggest news this morning was the completion of the CRH rights issue. 94% take up was slightly higher than was anticipated but given the deep discount the takeup was always likely to be high. The rump 8m share qwas placed comfortably at the opening of the market today.The stock has been a very strong performer of late through the issue and now the focus will be back onto the fundamentals. The Relative performance of the stock has been enormous so there must be a chance that the stock will lag in terms of performance from here as the market will now focus on the prospects for what CRH do with the money raised. Also with the dollar sharp weakness post the Fed action on quantitative easing last night the exposure of CRH to the Dollar will be an issue in the short term.
The Dollar issue is likely to spread across the market and the rapidity of the move will undoubtedly have caught all analysts by surprise. THe Dollar Euro moved by 4.4% today after a 3+% move late yesterday.
Elan presented a ta US healthcare conference today , The presentation was described as very dull by our man Sam who listened in to the presentation. The stock fell 3.6% today.
C&C has definitely got some momentum behind it now as the management roadshow to introduce themselves to the shareholders continues to be well received. The stock is not expensive here , and the comparative performances in terms of Month on Month data will get relatively easier from here. The market is anticipating the launch of the Pear product. I always feel there is a seasonal element to the performance of the stock and despite the smart comments that we had our summer yesterday , I remain optimistic that there is a decent trade in it from here.
Aryzta fell another 1.2% today , the absolute valuation here is not expensive but again they are dollar and Eastern Europe exposed on top of an already poor Ireland and UK so the stock faces continuous headwinds from here.
Ryanair is stuck amidst the turbulence with a steady flow of stock coming out everyday. Today the stock tried to go better but closed down -0.2% at 2.865 Aer Lingus rebounded from the lows but 60c is still a long way off the NAV figure of 1.38 that we estimate. Value is screaming to be unlocked but the management team now in open period are not taking the market by storm and wading in to buy shares….
Smurfit Kappa continued to drift but on thin volume and is down another 1%.
INM fell again down -0.5% to close below 19c.
Norkom on the other hand continues to rally though on very light volume and is up 71% from the recent 35c low as it trades at 60c.
In terms of the Financials , the sector traded strongly again and AIB jumped +10% , Bank of Ireland +18% , Irish life +20% but option money they continue to be though the focus and rumours of nationalisation has quietened down over the past two weeks.
At 5pm , Wall Street is down -1.3% , Europe closed up +1% and London was positive +0.3% , Ireland closed down -0.5% as CRH drifted after the strong run.
At least the markets are hanging in there , I hope that markets can hold these levels and move on from here. Lots of stocks are now at resistance levels , everytime we have got to these levels in the last few months the stocks have quickly weakened again. Here is hoping that we get to build a base from here and push through these levels. The problem for the Eurozone countries is that the US and UK are effectively competitively devaluing and this creates its own problems.
Have a Good Evening.
Liam
___________________________________________
Liam Boggan
Merrion Stockbrokers
www.merrion-capital.com
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