Sunday 28 May 2017

Shares advance as banks surge

Thomas Molloy

Thomas Molloy

IRISH shares advanced yesterday as the banks surged. The ISEQ closed around three- month highs as Allied Irish, Bank of Ireland and Irish Life & Permanent all posted percentage gains in double digits.

The banks extended gains from the previous session amid optimism that Christopher Flowers and other foreign venture capitalists are interested in investing in Irish banks.

Ovoca Gold had a good day after a positive operations update while Greencore was little changed after the acquisition of Massachusetts-based sandwich maker On A Roll which has gross assets of $3.4m.

Another company with good news was Digicel which completed a $300m corporate bond offering. The transaction was a re-opening of an 8.25pc senior note due 2017 first issued in December 2009. The bonds were priced at 102.75 to yield 7.54pc.

European stocks advanced to their highest level in more than two years after US President Barack Obama agreed to extend tax cuts, offsetting concern that Europe's sovereign-debt crisis will spread.

Unilever climbed 3.7pc after Morgan Stanley recommended the shares of the world's second-largest consumer-goods maker. BP gained 2pc as the company was said to assess the sale of some North Sea assets.

Tesco advanced after the UK's largest supermarket chain posted increased sales as Britons bought more of its Finest range.

The benchmark Stoxx Europe 600 Index advanced 1.2pc during trading in London after Mr Obama said he will agree to keep Bush-era tax cuts for high-income taxpayers in exchange for extending unemployment insurance and cutting the payroll tax by $120bn for one year.

Mr Obama said he will accept lower rates on high earners' income, dividends, capital gains and multi million-dollar estates for the next two years to break the stalemate over extending the Bush administration's tax cuts for middle-class taxpayers before Congress adjourns.

Milwaukee-based Manpower, the world's second-largest provider of temporary workers, said its employment gauge for January to March 2011 rose to nine after adjusting for seasonal variations, its highest level in more than two years.

European finance ministers meanwhile ruled out immediate aid for Portugal and Spain or an increase in the €750bn crisis fund, counting on ECB bond purchases to calm markets.

A week after handing Ireland an €85bn lifeline, the finance chiefs voiced confidence that Spain and Portugal will tame their budget deficits and said the existing credit line is enough to defend them in an emergency.

Stocks extended gains after a report today showed UK manufacturing expanded in October twice as much as economists forecast, a sign that the recovery is maintaining momentum into the final quarter of the year.

Irish Independent

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