Good Afternoon ,
Markets rebounded today after the few days of a pullback, the ISEQ index was up over 4% today , Europe +2.3% , Likewise London New York at 5pm up about 2%.
News in Ireland was dominated by the Interim management statement from Grafton and the ESRI Spring economic commentary. In both cases the news was depressing but in to a large extent already anticipated by the market.
The news that Grafton’s Irish merchanting business has seen turnover decline by -45% was shocking to see in print but the market largely shrugged its shoulders and the Grafton closed down -3.4% after initially being down closer to 6%. What was clear was that there was no rush to sell the stock.
The ESRI spring economic commentary was equally depressing and more depressing reading than the PWC economic research forecast. There is a race to the bottom now in economic forecasting. You wont get any publicity unless you are incrementally more bearish than the previous report so ESRI forecast -9.2% GNP contraction raising the ante on the -8.7% of the PWC report.
CRH was the big winner after an international house upgraded the stock , it rallied +5.7% , Kingspan continued to rally +4% though Grafton as already mentioned was down today after its strong run. Elan was up 5% today ahead of the presentations on AAB-001 to the American Academy of Neurologists meeting and Elan were taling up the efficacy of Tsyabri. I noted that the market seems to be ignoring the very strong results for the Novartis MS drug FTY720 which is an Oral MS drug where Novartis said that 80%-83% of patients were relapse free compared to Avonex at 69%. I thought this would be bearish for Elan…
The Airline sector shrugged off the impact of Swine Flu despite the news that a young child had died in the USA. There is a growing consensus that the condition is more dangerous to the poor and infirm and immuno compromised and otherwise that the impact is a bad flu but no more than that. The Airline sector rallied across Europe today with Aer Lingus rallying from yesterdays lows +5.4% to 59c and Ryanair +5.7% and the three major flag carriers all up between 4% and 6% also.
Tomorrow we look forward to seeing the outcome to the Independent newspaper negotiations with its bond holders. Expect trading to have been very difficult.
Irish Continental group was the big casualty today as the Moonduster consortium announced that they will not now proceed with a full bid for the group., The stock was down -23.7% at 10.10.
Today marks the 100th day in office for President Obama , he was getting mixed reviews today populist and Popular but criticised as ineffectual by some.
The Irish trade surplus hit a seven year high of €3.7 billion in February. External trade data from the Central Statistics Office (CSO) shows that the value of exports declined 3 per cent year-on-year with computer equipment falling 22 per cent and edible products down 34 per cent. Exports of medical and pharmaceutical products rose 15 per cent in January. Imports fell 28 per cent in the year to January with the number of road vehicles brought into the country down -71% with. Iron and steel imports were -43% reflecting the slowdown in the construction sector.
Have a good evening
Liam
___________________________________________
Liam Boggan
Merrion Stockbrokers
www.merrion-capital.com
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