Flat trading on ISEQ as AIB revises its bad debt guidance
A man speaks on a phone as he stands on the balcony above the DAX board at the Frankfurt stock exchange yesterday. European stocks were up 0.5pc, rising for the ninth time in 11 sessions, led by banks while buoyant commodity prices boosted shares of oil producers and miners such as Rio Tinto.
Thursday November 19 2009
DUBLIN stocks were flat yesterday with the market advancing by a fraction in relatively modest trading as the ISEQ Index posted a 6.55 point rise to 2906.36.
The market gave a muted response to an interim management statement from AIB.
There were no surprises but the statement did contain an upward revision to its bad debt guidance for the current year from €4.3bn to €5.3bn. It said the increase was mainly due to deterioration in the €24bn NAMA-bound loan book.
The bank also said the pace of deterioration is slowing but said there is little material improvement in the quality of the book or operating conditions. In the circumstances, the 1.49pc rise to €1.77 in AIB stock was a reasonable performance.
Rival Bank of Ireland finished the session with a rise of just under 1pc to €1.66.
In the general market, an unexpected drop in US housing starts offset what had been a relatively upbeat report from Home Depot.
Improvement
CRH is a major supplier to the group through the Architectural Products Group division, and the US group yesterday reported third-quarter earnings of 41c, slightly ahead of forecasts and an improvement on the second quarter.
Home Depot said that while there is still a great deal of pressure on housing and home improvement markets, there are some positive signs of stabilisation, helping CRH gain 0.64pc to €17.27 on the day.
Other construction-related shares to trade higher included DIY specialist Grafton, which was one of the best performers, advancing 4.43pc to €3.30.
The shares were up after Wolseley reported an improving trend in its UK/Irish business. Wolseley said sales in its UK/Ireland operations have declined by 13pc in the three months to the end of October, which compares to a 20pc decline in the six months to the end of July.
Shares in Independent News & Media were up over 1pc after it announced a reorganisation of how its print operations in Ireland are managed, leading to predicted cost savings.
The end of lengthy searches for top bosses at blue chip firms ITV and Marks & Spencer provided the focus in an otherwise quiet session for the FTSE 100 Index yesterday.
Retail giant M&S shot up the risers board and sent Morrisons into the doldrums after announcing it was poaching its rival's boss Marc Bolland to be its new chief executive.
ITV was also given a boost after naming former Asda boss Archie Norman as its new chairman, but the moves failed to keep the Footsie in positive territory -- down 3.8 points to close at 5342.1.
News that Bank of England policymakers were divided over the scale of its money-boosting scheme this month failed to provide much direction, while the proposed Financial Services Bill -- outlined in yesterday's Queen's Speech -- had little impact on market sentiment.
Under the bill, bankers will see excessive pay and bonus contracts torn up if they promote undue risk-taking, but this had no bearing on bank shares yesterday.
Slim gains seen earlier in the session were also pared back after a lower open for the Dow Jones Industrial Average on Wall Street.
- Pat Boyle
Irish Independent
