Liams Last Post : Ireland lags as markets rally into renewed optimism

Good Afternoon ,

 

A bullish end to the week, Wall street is up +2.5% for the week , London +3% , Europe +3.18% and Ireland .... wait for it....up a whopping 0.27% .

 

Materials and Financials were the winners in Europe this week , with material stocks average advance being +4.8% and Financials average advance +4.6%.  These sectors were followed by the industrials and consumer discretionary sectors with the defensive Consumer staples and Energy and utilities at the bottom of the table , all positive performance though this week.

 

Eurozone GDP rose 0.4% , signalling the end of the recession after five successive negative quarters. This is of course not good news for Ireland inc as the population stay afloat thanks to exceptionally low interest rates. 

 

Retail sales figures for Ireland were released by the CSO this morning showing the rates of decline are reducing (i.e. less bad) and m/m trends are actually slightly positive. Sales volumes are down 10% y/y (+2.1% m/m) or down 6% ex-Motor trades (+1.5%). Sales by value are down 14.8% y/y (+1.1% m/m) while ex-motor are down 11.6% (+0.3% m/m)

 

Corporate Ireland was busy this week , no major disappointments , CRH with their downgrade, Grafton telling us nothing new , DCC likely to remain on everyone's favourite stocks list , Smurfit indicating that they believe that the world will recover with its confidence in achieving the price increases and given our evolving view Merrion upgraded Smurfit to a buy with a price target of Eur8.25. Paddy Power statement triggered a significant rally in the share price +12% and while it looks expensive and now in overbought territory , there was noting in the numbers to shake many people out of the stock , it might drift back a bit but that would be an opportunity. The market has also speculated about a possible pacing in ICG but also there has been increasing volume trading in the stock , all quite suspicious , a corporate action in the wings once the Carroll stale is dealt with in some way shape or form...

 

The Airline sector agreement between British Airways and Iberia triggered a rally in the price of Ryanair with some speculation of a reduction of capacity in Spain providing opportunities for Ryanair. Still expensive...

 

INM formally confirmed the appointment of Vincent Crowley as the COO replacing Gavin O'Reilly who moves to become CEO. 

 

it is a big weekend for Ireland in Croke Park , Might a win against the French spark an economic revival ? and hopefully Ireland will give Rocky Elsom a warm welcome back to Croke PArk and then trash the Aussies. I will be there.

 

Have a good Weekend

 

Liam

 

 

 

 

___________________________________________

Liam Boggan

　

Merrion Stockbrokers

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