Liams Last Post ... the week that the NAMA lifted all banks and CRH ground its way into the index

Good Afternoon ,

 

The week of NAMA and CRH and from my point of view another very interesting trip to meet clients in the UK.

 

Nama was greeted with te type of relief rally which few had thought possible some time ago. Now the hard part begins , the attempts to get the piece of legialation passed. I have to say I sniggered at the Sinn Fein proposal to have a referendum on the subject but when I think that the Green party foot soldiers…get to vote on it with their own unrepresentative referendum , I do slightly despair….and maybe a full referendum might not be such a stupid idea as I first thought…Lets hope the tree huggers go with it….as there is no credible alternative on the table to NAMA and even Fine Gael have stopped pushing their other solution when the former leadership came out in favour of NAMA.

 

On Tuesday I wrote that AIB was the standout underperformer and that on a trade it might take off. I have to say that I did not think that the move would be so sharp but it goes to show that there is pent up demand here. Thee are lots of risks to the process still and the legislation has only been introduced but sentiment is definitely better in Ireland than it has been for almost a year.

 

The second trip to the UK confirmed the find of the trip from the previous week. That is that Institutions are underperforming their benchmarks , that there is a lot of money looking to be put to work and that the pressure is on for the last weeks of this quarter and the final quarter to drive to a positive performance at least in line with benchmarks. There will be down days like today , which is inevitable as so many stocks are so overbought after the sustained rally if the last couple of weeks. The down days are the days to top up holdings as selling pressure is not there now.

 

This afternoon CRH finally went into the Eurostoxx 50 Index. The stock was volatile all day , it looked like there was not much demand. Maybe naive on my part but I was sort of shocked to see the bid for 14m shares in the closing auction. The stock closed in Dublin at 20.70 and 20.25 in the corresponding London auction.  From all the commentary leading up to this , it looks like the consensus guestimate of demand for CRH by index tracking funds would be in the range of 25 to 27m shares. Most of this got dealt in the auctions and the balance must have been bought in advance.

 

Irish Life fell 10% today as it exited from a FTSE world index but it went back into the Eurostoxx 600 index. This might be an interesting trading opportunity first thing on Monday…

 

Anyway , it is Friday , it is 5pm , it has been an interesting week…

 

Have a good weekend…

 

Liam  

 

  

 

 

 

 

 

___________________________________________

Liam Boggan

　

Merrion Stockbrokers

Tel.: 353-1-2404171

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