Bank shares boosted on back of bailout hopes
Published 20/11/2010 | 05:00
BANK shares were the winners yesterday as investors' confidence was boosted by hopes that a massive multi-billion bailout package for Ireland will finally be hammered out between the Government and officials from the International Monetary Fund and the European Union in coming days.
But while Irish stocks were more widely tentatively buoyed, shares across the rest of Europe mostly fell yesterday as jitters remained over the fallout from Ireland's fiscal crisis.
The ISEQ overall index climbed just over 0.8pc, or over 23 points, to end what was a hugely turbulent week at 2,789.47. That's up almost 3.5pc since Monday and is its highest closing level since August 19. The day also saw the abrupt de-listing of home builder McInerney Holdings, which made its debut on the exchange back in 1971.
The embattled developer is facing collapse unless outside investment can be secured. Its board said a listing was no longer appropriate. Trading in its shares has been suspended since August.
Allied Irish Banks warned that it had experienced deposit outflows of €12bn since June, forcing it to increase its reliance on funds from central banks and monetary authorities.
Much of the outflow was ratings sensitive, as institutions and corporations reduced balances held with the bank. Its shares closed over 4.5pc higher at over 43 cent, having jumped as much as 18pc during the day.
The big gainer was IL&P. It said this week that its 2010 full-year earnings would be "significantly better" than last year's, driven by a 70pc surge in profits at the core life insurance business. Chief executive Kevin Murphy said the shares were "totally undervalued". Its shares soared 22.3pc, or 21 cent, yesterday to finish the session at €1.15. They rose as much as almost 30pc during the day.
Bank of Ireland gained also, entering the weekend up nearly 12pc, or 5 cent, on the day, at 48 cent. Other gainers included financial software firm First Derivatives. It added over 5.6pc to close at €5.05.
Losers included Smurfit Kappa, down 1.8pc, or 14 cent, to €7.55, while Grafton closed down 1.3pc at €3.13.
National benchmark indices declined in 14 of the 18 western European markets. The UK's FTSE-100 lost 0.7pc and France's CAC-40 slipped 0.3pc. Germany's DAX was little changed.