Liams Last Post : Its Monday , its subdued banks reflecting NAMA noises, Wolseley sets the tone for the construction stocks.

Good Afternoon ,

 

A day where the ISEQ reflected on the stories in the weekend press which yet again seemed to have well placed leaks about NAMA. This time suggesting that the initial NAMA discounts would be higher but that this would not necessarily be representative of the rest of the transfers, So we have no reason to change our forecasts which ar for 35% discounts for AIB loans and 28% average for bank o Ireland. The suggestion that Bank of Ireland might ultimately transfer less loans to NAMA did not seem to impact the share price.

 

Wolseley closed down -2% today after its interim results. In terms of read across for the Irish companies it said that RMI in the UK had improved slightly which is marginally positive for Grafton and it did note a pickup in residential activity in the US which has some positive potential implications for CRH but the comments on Commercial and Industrial markets in the US are negative for Kingspan. At the end of the day CRH had surrendered -1.4% after last weeks rally and Grafton was +2%  whereas Kingspan was down just over 0.6%.

 

Smurfit Kappa was up 0.7% today despite the increasing number of downgrades reflecting the spike in OCC prices for 2010. The big question is now whether the pricing momentum runs out of steam from hee. It looks finely balanced but the bears have not got it all their own way just yet…but the bulls are nervous…

 

UK budget on the 24^th will raise the annual excise duty fears re C&C so expect a somewhat nervous couple of days.

 

European markets Markets rallied in the afternoon taking their lead from the US. Still would not be surprised to see some element of a pullback aft her recent strength but I am not sure that the pull back will be significant.

 

Have a good evening ,

 

Liam  

 

 

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Liam Boggan

　

Merrion Stockbrokers

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