Good Afternoon,
Talk about a familiar pattern , , not terribly scientific either but last Wednesday the market broke out of the down cycle for a single day before resuming the downtrend with a vengeance. Today is no different after a strong rally yesterday we get the pull back today.
Two expected rate cuts by the BOE and the ECB did nothing for the market in terms of helping sentiment and not even talk of further cuts and quantitative easing is helping. Surprised that the authorities are not able to massage the markets with any message to offer respite against this tide of panic and ever deteriorating sentiment.
The Irish financials slide towards oblivion with Bank of Ireland falling below 12c per share down -24.9% and AIB now below 28c. -18% Irish Life slipped after its recent rally and fell -10%
CRH fell prey to both profit taking after its very strong +14% rally yesterday with the technical disposal of the ADR holders rights into the market triggering the -18% fall in the nil paids with the ordinaries falling by -7.5%
Almost everything down today , the notable exceptions being Total Produce the exceptionally cheap fruit and Veg distributor who reported earnings in line with expectations , raised the dividend and talked about a sharebuyback. THe stock rallied +21% off very low levels. This one is trading on about 3x earnings and yielding 9%... Fyffes the Total produce sister company rallied by +21% also.
Greencore also rallied today after Premier Foods raised money in a placing and said trading was in line with expectations.
The usual suspects which were up yesterday were down today.. Smurfit -11% , Ryanair -3.7% , Aer Lingus –6%. DCC-2% and Paddy Power which had a strong few days down -0.8%.Elan -5% and the ICON ADR -2.6%
Norkom approaches its cash value per share and closed -5.6% down on thin volume after the initial fall.
I have to say though that despite the nauseating rallies and falls in the market , and I am now becoming convinced that this results season is marking perhaps the turn in relative performance for the Irish market with a selection of companies now separating themselves into a distinct group offering interesting propsects for investors prepared to take a view looking for absoute performance but I am convinced that there is scope in ireland for definite relative performance.
The stocks on my mind that are attractive are : CRH , Ryanair and Paddy Power as core holdings woth strong balance sheets and industry dominating chaacteristics. The others are Irish Life , Grafton , C&C , Kerry, Total Produce and Glanbia ,Aer Lingus ,DCC , Norkom and Tullow.
A mixture of market caps and industries…. And a variety of different reasons for liking each of them and one characteristic is that none of them are overly reliant on Ireland for their earnings. As someone pointed out yesterday , the CRH rights issue took the focus away from the financials with AIB , the largest of the financials now ranked number 15 in the ISEQ weightings below Kingspan in 14th place.
At the close in Europe , Wall street is down -2.8% . the FTSE is down -3.2% and the Eurostoxx 600 index down -3.6% , onward and downward….
Have a good evening….
Liam
___________________________________________
Liam Boggan
Merrion Stockbrokers
www.merrion-capital.com
Disclaimer www.merrion-capital.com/disclaimer.html
Merrion Stockbrokers Limited (registration no. 307878)
is a limited liability company whose registered office is at
Block C, The Sweepstakes Centre, Ballsbridge, Dublin 4, Ireland.
No comments:
Post a Comment