Liams Last Post : up and down week delivers +1.5% performance across Europe , +2.6% in Ireland

Good Afternoon ,

 

At the end of an up and down sort of week where I detect signs of markets tiring after the recent rallies , the Euro Stoxx 50 index recorded a gain for the week of +1.5% . The best performing sectors were the consumer discretionary stocks which as a sector were up +2.5% , and within this the best performing individual sub sectors were auto components , Hotels , Media all up in excess of 3% with the balance namely speciality retail , Travel and Autos all up a more modest +1% ish on the week.

 

In Ireland, we had numbers from Independent News and Media which were ok and we subsequently upgraded our recommendation on the stock. This is a cyclical recovery punt rather than the best quality investment but there have always been times to make money by trading it and from here there is definitely the first signs of stability and the stock could possibly surprise on the upside with a potential re-rating or an earnings surprise.

 

The Irish Banks continue to be volatile as we get closer to announcements from them about their NAMA discounts and their plans to raise capital.

 

Aer Lingus like the rest of the sector bounced on mews about developments re open skies. The stock also reacted positively in anticipation of the results of a second ballot by cabin crew who had voted against the planned cost cutting and so were taking the opportunity to potentially revise their opinion in the light of the company proposal to make the entire 230 cabin crew redundant in the absence of agreement.

 

Paddy Power got squeezed up a couple of percent this week after the Cheltenham run was digested by the market.

 

Smurft came in for some selling pressure on fears about the rises in OCC prices but a number of European players announced further price increases and made clear intheir comments that the price increases would compensate for the OCC price rise

 

And eventually the pressure eased on Smurfit ad it bounced nicely.  Glanbia continued to perform after our upgrade on Wednesday and closed he week at the eur3.00 level , it looks overbought here and may  provide an opportunity to get out ahead of the co-op placing. Our 3.3o price target assumes all the components of the deal complete and as these have not been concluded there is an element of risk which is not negligible here.

 

ICG results were also pleasing this week with upgrades helping underpin the price and of course on Wednesday we saw Cider Duty being increased in the UK budget but by less than the market had feared so the stock rallied.

 

Next week we look forward to Aer Lingus results as well as Bank of Ireland results on Tuesday. It should be an interesting if short week with Good Friday looming.

 

Looking at the market , it does look a bit tired with stocks showing signs of rolling over a bit from here. From a trading perspective the pullback trade is probably the way to look at next week.

 

In the meantime , Have good weekend.

 

Liam

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Liam Boggan

　

Merrion Stockbrokers

Tel.: 353-1-2404171

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