Monday 26 June 2017

BoI biggest loser as Fitch report and rising oil prices hit shares

Bank of Ireland fell 3.77pc after it registered €1.9bn of notes from its mortgage-covered securities programme on the stock exchange in order to maintain levels of eligible collateral for European Central Bank loans. Photo: Getty Images
Bank of Ireland fell 3.77pc after it registered €1.9bn of notes from its mortgage-covered securities programme on the stock exchange in order to maintain levels of eligible collateral for European Central Bank loans. Photo: Getty Images
Peter Flanagan

Peter Flanagan

IRISH shares fell again yesterday, after rising oil prices and losses in the financial sector meant the bears held the upper hand for a third day.

By the close of trading, the ISEQ Overall Index was down 0.54pc, or 15.80 points, at 2,907.67.

The index was hit hard by foreign and domestic news. A report from Fitch ratings said the potential "cost of imposing burden sharing" on bank bondholders outweighed any potential benefits from the move; while the ongoing crisis in the Middle East forced Brent Crude past $110, with some analysts saying the price could even double from that figure.

Allied Irish Banks was by far the biggest loser on the day. The stock slumped nearly 20pc on the back of Fitch's report before closing down 18.52 points at 22c.

Bank of Ireland (BoI) fell 3.77pc after it registered €1.9bn of notes from its mortgage-covered securities programme on the stock exchange in order to maintain levels of eligible collateral for European Central Bank loans.

Irish Life and Permanent, however, rose 2.87pc after the firm said it was selling its Irish Life international subsidiary for €26m in cash.

Away from the banks, most of the major stocks registered losses as higher oil prices drove fears of higher input costs.

Profits

Construction giant CRH fell 0.92pc to €16.11, while Greencore slipped 1.28pc to €1.16. Kerry Group slipped back after stellar results on Tuesday as some investors pocketed profits. The shares closed down 0.17pc at €26.21.

On the other side of the ledger, Paddy Power gained 2.65pc the day after shareholders approved an acquisition in Australia, while Aryzta rose 4.07pc to €34 on the back of strong results from a peer in the quick-service restaurant business.

Across Europe, national benchmark indexes slid in 15 of the 18 markets. France's CAC 40 lost 0.9pc and Germany's DAX dropped 1.7pc. The UK's FTSE 100 retreated 1.2pc. The composite Stoxx Europe 600 index slumped 1.1pc.

"The rise in oil prices could tip the economy into a significant period of sub-par growth," said Gerard Lane, an equity strategist at Shore Capital in Liverpool.

"We find ourselves less convinced about the robustness of the US economy, and as such suggest that the equity market may suffer weakness, as it did in the second quarter in 2010."

In London, BHP Billiton, the world's largest mining company, lost 3.1pc and Antofagasta sank 5.1pc after copper fell to a four-week low on speculation that unrest in North Africa and the Middle East will derail recovering economies as oil prices jump.

Logica sank 5.4pc after the technology company's results missed expectations.

Rexam slid 5.8pc even after the world's biggest beverage-can maker reported full-year net income of £124m (€146m).

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