Liams Last Post : Markets continue to rally helped by rising European Export data

Good Afternoon ,

 

Quiet day on the corporate newsflow front , Total Produce delivered what they described as a solid set of numbers . They raised guidance to the top end of their previous guided range but the recovery in their earnings from the weak snow related Q1 was boosted by currencies. Total revenue growth of +1.7% tells the real story here and the valuation is commensurate with the real underlying growth rate. That being said this company is likely to be reasonably reliable in delivering cash to pay down its debt and pay a dividend which is just under 5%.

 

The positive mood which took hold in markets yesterday has continued today. The Irish Financials are still struggling as markets and investors grapple with the funding scenarios and the funding cliff that looms this September. AIB and Bank of Ireland both were under pressure today and down between -2.4%  and -2.7% .

 

The building materials stocks continued to build on their rallies of yesterday , Aer Lingus has been creeping better all the time but Ryanair was off -1% today,

 

Smurfit Kappa continued to catch the bullish mood and rallied +3.1% .

 

The food stocks looked a bit mixed as the cyclicals performed. Greencore is under continued pressure with no obvious catalysts for performance. It does look well oversold though so probably too cheap to dispose of here.

 

The ECB held rates steady but with European export growth rising quickly the comments by ECB president Trichet were not as Dovish as some people might have hoped. Euro export growth was up +4.4%  Trichet said that     "Recent data has been stronger than expected and further ahead, the recovery should proceed on a moderate pace."  

 

The other notable news was the success of the Spanish and French bond auctions today. Spain sold eur3.3bn of 2015 paper and France issued 9bn of bonds at record low yields.

 

Have a good evening

 

Liam

 

 

 

 

___________________________________________

Liam Boggan

　

Merrion Stockbrokers

Tel.: 353-1-2404171

Mob:353-87-2313505

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