Friday 23 June 2017

Aryzta drags entire ISEQ down as it bids to beef up balance sheet

Peter Flanagan

Peter Flanagan

IRISH shares fell yesterday, as a fall in Aryzta dragged the entire market down. By the close of trading the ISEQ Overall Index had fallen 1.07pc, or 31.78 points, to reach 2,947.19.

The index fell from the opening as the market absorbed a share placement by Aryzta -- one of the biggest companies on the index.

After trading on Tuesday evening the speciality baker said it would place more than 4.2 million shares as it looks to beef up its balance sheet.

The placement drove the stock down both here and in Zurich, with the Dublin price plunging 6.08pc to €35.20.

A loss of that size for the fifth biggest stock on the exchange virtually guaranteed the index would end Wednesday in negative territory but other major players on the index also struggled. CRH fell 1.6pc to reach €15.04 and Kerry Group stumbled 1.82pc to €28.64.

Oil fell yesterday and that was reflected in the equity markets, with Petroneft falling 6.3pc to 22c while Dragon Oil slid 3.7pc to €5.63. Providence Resources however bucked the trend to add 8.68pc to €2.63.

Elsewhere, European stocks fell from a one-week high as Fitch Ratings said the European Central Bank must do more to prevent the debt crisis from spreading and a report indicated the German economy is shrinking.

National benchmark indices declined in 13 of the 18 western European markets. Germany's DAX and France's CAC 40 lost 0.2pc. The UK's FTSE 100 slipped 0.5pc while the Stoxx Europe 600 dropped 0.4pc.

"There is nothing different between the crisis at the end of 2011 and at the beginning of 2012," said Lorne Baring, managing director at B Capital in Geneva. "The rally in markets was a search for optimism away from Europe, but at some point it was going to come back onto the table."

Brink

Germany may be on the brink of recession after the debt crisis caused the economy to contract in the final quarter of 2011. The economy shrank "roughly" 0.25pc in the fourth quarter from the prior period, the Federal Statistics Office said.

The ECB should step up its government bond purchases to combat the debt crisis, said David Riley, head of Fitch's sovereign-debt unit.

Repsol dropped 5.7pc in Madrid, the largest decline in four months, after the company sold 5pc of its shares to investors.

A gauge of oil and gas companies sank the most of all 19 industry groups in the Stoxx 600 as crude fell. The gauge declined 1.8pc, the most in four weeks. Royal Dutch Shell retreated 3.1pc, while BG Group slipped 2pc. Statoil lost 1.7pc.

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