Good Afternoon ,
Well as I write this I am fascinated about how the Dow will close this evening. The non Farm payroll numbers at lunchtime were all a tad worse than expected and the markets fell sharply immediately on the news but the market rebounded into positive territory after the initial disappointment and now is hanging around close to being flat on the day.
The Irish Banks continue to behave as the option plays on sentiment that they are. AIB continuing to get support from their demonstration of their ability to raise debt that goes beyond the terms of the Government guarantee period.
CRH fell 4.5% at one stage as it was negatively impacted by the fall out from the Lafarge results. We would point to a better tack record for CRH in terms of acquisitions and a stronger balance sheet which will enable acquisitions and not that Lafarge while broadly similar in terms of valuation is more likely to have to make disposals and does not have the operational leverage that CRH will we believe demonstrate. The market was not in the mood to differentiate today which provided an opportunity for a few buyers of CRH to nibble at the lows.
Grafton rallied to get back into the mid 3.50's but eased during the afternoon. It is still at critical levels as to whether it now confirms 3.50 being a new resistance level or gets back into the higher range. It fell like a stone to touch off the Eur3.00 level earlier in the week but rose just as rapidly once sentiment turned.
Ryanair continues to be the highest flying stock , bullet proof and impervious to the earnings down grades but even Aer Lingus reacted positively to its better traffic stats released this morning.
We met ICON yesterday , interesting meeting , there seems to be lots of potential business around but neither ICON nor their competitors are closing the deals , management of ICON were somewhat bemused by the lack of closing of deals despite the high levels of business that the CRO industry was being invited to bid for.
Management were also bemused by the performance of their shares after the relatively disappointing book to bill ratio that they reported. One thing was clear though and that their belief in their industry position and that their belief that ultimately large pharma would move to outsource clinical trials remains unshakeable.
In Dublin , the Irish Congress of Trade Unions…is holding a Friday afternoon of Action in support of their own interests…..while the rest of us work to pay the public sector wage bill …enough of the bitterness , it is the weekend.
It is my sons birthday so I am off to his party…
Have a good weekend
Liam
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Liam Boggan
Merrion Stockbrokers
Tel.: 353-1-2404171
Mob:353-87-2313505
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