Good Afternoon
Interesting day, markets all opened lower but rallied through the day to finish marginally up. The big stories of the day in Ireland unfolded this afternoon when Developer Paddy Kelly had a judgement registered against him in the commercial court today. Kelly who last year was awarded a life time achievement award in the US has become the highest profile of the Golden circle of Irish Developers to face the reality of the end of the celtic Tiger era. The Irish Times this afternoon reported that Kelly failed to turn up at the Commercial Court today and was not represented when Bank of Ireland secured judgment against him requiring repayment of loans of €3.4 million.
PwC this afternoon published a report saying the economy will contract -8.7% this year and with remarkable insight at this stage of the game went on to say that due to the scale of the anticipated budget deficit, an upturn is likely to be export-led. As this will rely on economic recovery elsewhere, the outlook for the Irish economy will remain negative until well into 2010.” Tell us something we don’t know.
Minister for Finance Brian Lenihan speaking At the Irish League of Credit Unions conference in Killarney on Saturday has said the recent budgetary steps taken in imposing the pensions levy and raising taxes had impressed and “amazed” other European countries. Mr Lenihan said other European governments would not have been able to impose the kind of pain the Government had. Mr Lenihan said there would be “riots” in France, were the pension levy on public servants to be introduced in that country. Mr Lenihan also spoke of the warm praise in the British press recently for the Government’s decisive action, and criticism of the British chancellor for not moving faster in the recent budget there. As we know it is all very well to dole out the pain now but this government which is completely identified with the politics of croney capitalism and had been in the pocket o the property developers will have its own day of reckoning soon and particularly if the government find it technically too difficult to stop paying themselves the pensions they receive while in office. Ministers need to lead by example and the Governments moral authority to govern continues to be eroded as they fail to take hits themselves and they wonder why the bus drivers and nurses are considering or taking industrial action ?
The Airline stocks succumbed to worries about the Swine flu epidemic though it is early days yet to guess in its impact.
Ryanair fell -4.3% and Aer Lingus fell -5.2% while BA fell -7.75% and Air France fell -6.5%.
This afternoon the World Health Organization said it plans to raise its pandemic alert to an unprecedented level today, saying that swine flu is spreading across North America. An increase above level 3 on the WHO’s six-step alert system would be the first since the United Nations agency adopted the current pandemic risk scale in 2005. The agency’s guidelines say the goal of a level 4 alert is “containment of the new virus within a limited area or delay of its spread, Level 5 would be “a strong signal that a pandemic is imminent. This morning Spain became the first country in Europe to confirm a case of the H1N1 virus when a man who returned from a trip to Mexico last week was found to be infected. Two people in Scotland and a Canadian woman in Manchester are being tested for the virus today. No deaths have occurred outside Mexico from the new strain flu but 20 cases have been identified in the United States and six in Canada. Possible cases are being checked as far afield as Europe, Israel and New Zealand.
The heavily indebted stocks did suffer a bit of profit taking but have continued to remarkably well. Kingspan continued to be resilient and rose +1.4% despite its late cycle nature . This is somewhat a surprise to see it perform with Grafton which has much earlier cycle exposure.
At 17:15pm , ICON is up 10% in the US ahead of its results tomorrow. We wait to see how they guide after the PPD and Kendle warnings of last week.
Have a good evening ,
Liam
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Liam Boggan
Merrion Stockbrokers
www.merrion-capital.com
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