Liams Last Post : Kingspan passes inflection point to get upgrades...and the banks nervously await Irish Life and AIB IMS this week.

Good Afternoon,

 

Kingspan IMS was the highlight of the day , an impressive performance from a soft spoken management team. The key points to emerge were that the sales have stabilised now on a run rate basis and this confirms what the company had indicated in September. Operating profit will be higher due to tight cost control , Debt levels are below what our full year forecasts are and guidance for Capex reducing by half again. Company now expecting profits in the region of Eur60m and a small decline next year but off the higher base so we uprgade our earnings for this year  and next....A significant moment... past the inflection point.

 

The building materials stocks in Europe were strong , with St.Gobain and Lafarge up just under 3% , though CRH was only able to manage a +0.7% gain.  Grafton remains stuck and closed today at 3.26. Kingspan was up +4.25%

 

Bank shares in Ireland sank today ahead of the Interim management statements due from Irish Life (Tomorrow) and AIB on Wednesday and FBD insurance on Thursday.  We like Irish Life for the valuation of the Life Assurance business and we look for any news about the changing corporate structure and about the Third Banking Force or not.

 

There was also news that the Greek banks were told to seek funding options other than the ECB as the ECB is likely to tighten its supply of liquidity next year.  The greek banks have been amongst the biggest users proportionately of the ECB funds. This was offered as part of the reasn why there was pressure on the Irish banks.

 

Total Produce and Fyffes were up 2.4% today. 

 

FEd chairman Ben Bernanke has just released te text of a speech he is making today suggesting that the economy pick up is more than just temporary factors. He also commented about the dollar which he says he is attentive to the changing value of the dollar and the implications for inflation. He is to talk about the dollar in the dual mandate of maximum employment and price stability.

 

The market is in positive mood yet again though with wall street up +1.2% , Dublin closed down -1% ,  The FTSE + 1.6% and Europe is up +1.5%.

 

As usual , it will be interesting to see where the Dow closes tonight , but more interesting to see how the market reacts to the Irish Lfe numbers. I think there is value here now at this level so I am looking closely for opportunities to really get behind it. We ar close now.

 

Have a good evening

 

Liam

 

 

 

 

___________________________________________

Liam Boggan

　

Merrion Stockbrokers

Tel.: 353-1-2404171

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