Liams Last Post : Dow above 11000 , Greek bailout relief rally fades in Europe.

Good Afternoon ,

 

Well Monday started brightly with a relief strong opening after the EU had agreed to bail out the Greeks and avoid a showdown in the financial markets if the country failed to raise any money in the bond market as issue after issue recently has had to be done at ever higher yields which had gotten above 7%.  

 

European equity markets were a bit all over the place today , strong opening , slide off into the US open and a sharp recovery to leave markets just about flat. EuroStoxx 600 index -0.11% with Eurostoxx 50 index +0.33% , London had the same see saw ride closing +0.16% having been higher and lower…and Ireland managed to hit the bulls eye and close flat on Fridays close thanks to the lunchtime rally giving way into the close. The Dow Jones however has broken above 11000 today so we wait to see if it manages to hold above the level to the close.

 

There is more and more volume creeping back into the Banks , I like the Bank of Ireland story particularly and think it should begin to be bought now. I like what I am hearing about the redemption of the Warrants and the conversion of the preference shares. I am also aware that all the big brand name London houses are now throwing their weight behind it so there is increasing institutional interest and many international investors who used to be involved now sniffing around here again. The rights issue will present opportunities but sub underwriting wont guarantee any stock so I think that the strategy has to be to start buying slowly now.     

The Ulster Bank construction Purchasing Managers Index (PMI) showed a further fall in construction activity for March but at a slower pace. The PMI rose to 42.3 in March, up form 40.4 in February . It was the weakest fall since October, 2007.  Simon Barry, Chief Economist at UB said "The Irish construction sector contracted for the 34th consecutive month in March – a statistic that highlights what a torrid time the sector has been having for most of the past three years."  However he sounded a note of optimism adding "However, the PMI managed to rise for the third month in a row and the March level is the highest reading seen in almost two and a half years. While the construction sector is lagging behind manufacturing and services, which are both now in the process of stabilising, at least the rate of contraction does look to be easing back."

The KBC Ireland/Economic and Social Research Institute (ESRI) Consumer Sentiment Index rose to 61.9 in March, compared to a February reading of 59.4, indicating a rise in sentiment towards the current environment due to a more positive perception of the buying environment for major household durables. The index of current economic conditions increased to 87.6 from 78.8 in February, while the expectations index fell from 46.3 in February to 44.5 in March. This index hit an all-time low of 39.6 in July 2008.

 

In the High Court the hearing about whether to make the appointment of the provisional administrators to the Quinn Insurance business permanent was adjourned for a week. Though the Administrators left a report that they had prepared with the Judge for him to read.

 

No great stock price moves though I note the construction stocks were a bit weaker with Kingspan down -3%

 

 

 Have a good evening

 

Liam

 

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Liam Boggan

　

Merrion Stockbrokers

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