ISEQ surges on new crisis fix hopes
28 November 2011
ISEQ surges on new crisis fix hopes
The main Dublin shares index rose sharply this morning as Germany and France stepped up a drive to stabilise the eurozone debt crisis.
By 12:30, the ISEQ had gained 56.51 points to 2,578.48.
The two European powers are looking for intrusive powers to reject national budgets in the euro zone that breach EU rules, as a market rout of European debt eased temporarily on hopes of outside help for Italy and Spain. The OECD rich nations' economic think-tank said the European Central Bank should cut interest rates and step up its purchases of government bonds to restore confidence in the euro zone, which it said now posed the main risk to the world economy. In Brussels, finance ministers of the 17-nation currency area meeting on Tuesday are due to approve detailed arrangements for scaling up the European Financial Stability Facility rescue fund to help prevent contagion spreading in bond markets, and to release a vital aid lifeline for Greece. Berlin and Paris aim to outline proposals for a fiscal union before a European Union summit on Dec. 9 increasingly seen by investors as possibly the last chance to avert a breakdown of the single currency area.
In a trading update, Irish-Swiss bakers Aryzta has said that Europe is its weakest region. Underlying revenue growth at its Food Group (i.e. excluding Origin, which issued a Q1 update last week) was 4.4pc. Europe's growth was 1.2pc, North America 6pc and Rest of world 14.7pc. Acquisitions (Honeytop in the UK and Maidstone Bakeries in Canada) augmented underlying growth. At group level, acquisitions contributed 6.5pc. Net of currency change of 1.5pc, total revenue growth in Q1 amounted to 9.6pc. No significant change in the trading environment since September has been observed, and the trend in Q1 is described as broadly a continuation of Q4 trends. The outlook and guidance issued with its full year results on September 26th last continue to be viewed as valid: "at this early stage of the year we believe FY2012 consensus EPS (338c) appears reasonable and our stated earnings goals for 2013 are still attainable". Shares in the group climbed 33c to E33.53.
Shares in Smurfit Kappa rose 9c to E4.15 as Chinese imports of OCC (containerboard) increased by 1.8pc in October compared to the same month last year. Volumes were 22.5pc lower sequentially. Volume trends year-to-date have remained relatively stable with Chinese buying slowing as normal in Q4. "We expect to see some pick-up into the end of the year, which should continue until Chinese New Year in February. It will be interesting to see if (1) normal Chinese buying patterns continue and (2) if OCC prices will continue to decline in an environment of stronger Chinese demand," said Davy's Barry Dixon.
Elan has announced that it has launched a research collaboration with the University of Cambridge to discover novel compounds capable of altering the behaviour of proteins and that may have utility in Alzheimer's and Parkinson's diseases. Shares in the Irish drugs developer gained 12c to E7.66.
Disclaimer for Business News
The Business News is provided for information purposes only and comes from Business World. It is provided solely as a convenience to you and not as an endorsement or approval by us of the content thereof. KBC Bank Ireland can not guarantee the accurateness and completeness thereof. KBC Bank Ireland does not accept any liability or responsibility for the content of and/or any opinions expressed therein (including but not limited to liability arising out of any allegation that the content of or the information contained therein infringes any law or the rights of any person or entity).
