Ryanair gloom offsets CRH boost
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Tuesday November 03 2009
THE benchmark ISEQ changed little yesterday as further declines in the banks and disappointing forecasts from Ryanair offset gains at CRH on optimism that the US construction industry is recovering following a bigger-than-expected rise in spending.
The benchmark ISEQ closed up just 6.38 points, or 0.2pc, to finish at 2,873.1 in Dublin yesterday. The biggest gainers included CRH which surged 51.1c, or 3.1pc, to finish at €17.16.
The world's second largest building materials company, which accounts for about a third of the ISEQ's value, gained as spending on US construction unexpectedly rose in September as builders rushed to finish projects in anticipation of a possible end to a first-time home-buyers' tax credit.
The increase was the biggest since September 2008. CRH makes more than half its profits in the US.
Allied Irish Banks and Bank of Ireland slumped 10.6pc to €1.68, while Bank of Ireland closed down 5.6pc at €1.60 on concerns the European Commission will extract more concessions from the bank.
Royal Bank of Scotland said yesterday that it will have to make more concessions than previously thought.
AIB chairman Dan O'Connor said last week that his bank could face "serious consequences" from its negotiations with Europe over government cash injections.
Ryanair slid 1.9pc to €2.89 after the discount airline said it will cut ticket prices to lure passengers amid the recession. The carrier is forecasting that yields, or earnings per passenger, will fall as much as 20pc in the winter season after average ticket prices declined 17pc in the first half of the year to €39. Rival Aer Lingus lost 3.7pc to 54.9c.
Dragon Oil surged 8.9pc to £4.47 in London after Emirates National Oil agreed to buy the shares it doesn't already own in a deal that values the London-listed explorer at £2.36bn. Dragon's shares in Dublin, which are less liquid than London, rose by a more modest 6.8pc.
Elsewhere in the UK, stocks advanced as mining companies rebounded from last week's steep retreat as reports showed manufacturing in Britain and the US expanded at the fastest pace in at least two years. The benchmark FTSE 100 Index added 59.95, or 1.2pc, to 5,104.5, rebounding from the steepest weekly drop since March.
Royal Bank of Scotland sank 7.8pc to 38.65 pence after saying an agreement with the EU will "include some divestments not initially contemplated". Lloyds slipped 2.3 pc to 85p.
Elsewhere in Europe, shares generally advanced. Infineon Technologies gained 4.1pc to €3.19 after the company was raised to "buy" from "underperform" at BofA Merrill Lynch. Cie de Saint-Gobain, the biggest supplier of construction materials in Europe, gained 3pc to €34.30.
- Thomas Molloy
Irish Independent
