Tuesday 19 September 2017

Look for Bank of Ireland to bounce back, and Brexit to trump the Donald next year

Nigel Farage helped make Brexit a reality - an event that will have a big impact on Ireland
Nigel Farage helped make Brexit a reality - an event that will have a big impact on Ireland

The Sunday Independent analysts' survey reveals who the experts believe put in the year's best performance for investors - and who put in the worst

We ASKED: What do you predict will be the best performing Irish stock in 2017?

Result: Bank of Ireland

Summary: It hasn't been a great year if you're a Bank of Ireland shareholder - which, in effect, you are given that the State retains a stake of around 14pc.

Having closed in 2015 at just under 34c each, the bank's shares were trading at around 24c as the Sunday Independent went to press.

It was a year of two halves for the stock, which fell pretty steadily, was hammered in the aftermath of the Brexit vote on June 23, before starting to climb up again.

It hasn't been a very cheery end to the year at the bank, which has just admitted overcharging thousands of tracker mortgage customers. Next year should be better if the economy grows and dividends start being paid again.

Low-profile engineering stock Mincon has risen about 10pc this year so far and was joint second with Ryanair.

With oil looking set for a better performance, Mincon, whose recent financial results have been good, might well be the year's dark horse.

In aviation, Ryanair has a long track record with investors and is expected to carry record passenger numbers in 2017.

WE ASKED: What do you predict will be the worst performing Irish stock in 2017?

Result: Paddy Power Betfair and C&C

Summary: Breon Corcoran is back in 'Power Tower' and so far the new group's financial performance has been pretty good.

Last month, the company lifted its full-year profit guidance - but there are dark clouds on the horizon with the continuing review of the gambling sector in the UK. The stock has fallen well back from the post-merger heights and the verdict from our survey is that further drops might come.

Meanwhile, C&C continues to struggle with its cider product outside of Ireland and in its home market competition is increasing.

WE ASKED: Who was the best performing chief executive of an Irish listed company in 2016?

RESULT: David McCann, Fyffes

Summary: There was only ever going to be one winner here after that spectacular announcement landed earlier this month. What a turnaround for the fruit seller after a merger with Chiquita fell through two years ago.

WE ASKED: Who was the worst performing CEO of an Irish listed company in 2016?

Result: Owen Killian, Aryzta

Summary: Aryzta is still struggling to win over the investment community after the negative market reaction to that acquisition of a stake in frozen food retailer Picard.

Investors cannot be pleased with the way things have gone and will be looking to new chairman Gary McGann with hope.

But if the lacklustre performance continues, how long will it be until Killian's position comes under pressure?

Killian got over 70pc of the votes cast in this category. Others who were listed were Tony O'Reilly, of Providence Resources, and Richie Boucher of Bank of Ireland.

WE ASKED; What will have a bigger impact on the Irish economy in 2017 - Brexit or Trump?

RESULT: Brexit

Summary: No contest here with the vast majority of respondents voting for Brexit. 2017 should be the year when the phony war ends and the shape of things to come starts to emerge in Europe. It probably won't be good for Ireland.

WE ASKED: What are the prospects for the Irish economy in 2017?

Summary: An interesting range of views were expressed here - perhaps a reflection of just how much uncertainty there is at the moment. A number of respondents predicted a strong first half followed by a weaker second half.

Averaging out the responses results in GDP growth of 3pc. Some expect growth as high as 4.5pc, others as little as 2pc.

An acceleration of the housing market was also flagged.

WE ASKED; What are the prospects for the global economy in 2017?

Summary: Another broad range of views for this question, but most of our respondents were optimistic. One expected US spending to drive a strengthening in the global economy, while another predicted a rise in commodity prices to drive interest rates and inflation higher. An average of estimated GDP growth comes to 3.5pc.

WE ASKED: What are the sectors to watch in 2017?

RESULT: Healthcare/Gold (joint winners)

Summary: No surprises at healthcare's victory here - most investment insiders are saying the same thing. Nursing homes seem to be particularly 'in'.

A victory for gold bugs, too - reflecting the views of our more pessimistic respondents.

Sunday Indo Living

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