Banks bounce on NAMA legislation
Tuesday November 24 2009
STOCKS rose in Ireland and globally as speculation grew that central banks would keep interest rates near record lows.
The ISEQ closed up 40.54 points, or 1.4pc, at 2,916.46 yesterday, buoyed by financial stocks and firms including Ryanair.
Allied Irish closed up 3.8 cent, or 2.3pc, at €1.74 while Bank of Ireland finished up 1c, or 0.5pc, at €1.70. Banks rose as much as 5pc earlier in the day on the back of news that President Mary McAleese signed the legislation establishing the National Asset Management Agency without referring it to the Council of State.
Banking
The Government can now formally launch the agency that will remove some risky commercial property loans from the banks' books.
Irish Life & Permanent slid 10.9c, or 3.1pc, to €3.39 after it was confirmed that the Government planned to merge rival EBS and Irish Nationwide building societies to create a so-called "third force" in Irish banking.
Previous leaks from government sources suggested this "third force" would include Irish Life but this now seems unlikely, leaving the lender to compete with the new building society.
Glanbia extended recent declines after the Kilkenny-based cheese maker admitted last week that full-year earnings would be at the lower end of what it previously guided due to the "persistently weak consumer sentiment" affecting its Irish food business. Shares closed down 2.5c, or 0.9pc, at €2.75.
European shares had a good day with the Dow Jones Stoxx 600 Index rising the most in five weeks as data on the continent's services and manufacturing industries and US home sales added to signs of a strengthening economic recovery.
Renault, France's second-biggest automaker, rose 3.8pc after Credit Suisse advised buying the shares. Cadbury soared to a record amid speculation other companies might follow Kraft Foods in making an offer for the chocolate maker.
"Valuations are really not that excessive and you have a good stimulus from monetary policy at the moment," said Lucy MacDonald, chief investment officer at RCM UK, which has about $130bn invested in assets.
Douglas Holding, Europe's largest make-up and perfume retailer, rallied the most in eight months after confirming that competitor Mueller bought a stake in the company. The shares gained 5.6pc to close at €32.87.
Renewables
Renewable Energy Corp posted the biggest gain on the Stoxx 600.
The Norwegian solar energy components maker, soared 6.8pc to 36.20 kroner after LDK Solar, a Chinese maker of silicon wafers used in solar power cells, reported an unexpected third-quarter profit.
- Thomas Molloy
Irish Independent
