Monday 29 May 2017

Capital deal at IL&P boosts ISEQ

Thomas Molloy

Thomas Molloy

IRISH Life & Permanent pushed the benchmark ISEQ higher yesterday as the market digested news, first revealed in this newspaper, that the lender is close to unlocking capital -- a process which analysts said may lead IL&P to make some sort of dividend payment next year.

The benchmark ISEQ closed higher for a second day, rising 23 points, or 0.7pc, at 3110.85 points. Twenty-four stocks advanced, 15 fell and 18 were unchanged. National benchmark indexes rose in 15 of the 18 western European markets. France's CAC 40 and Germany's DAX climbed 0.4pc while the UK's FTSE 100 gained 0.5pc.

In Dublin, Irish Life & Permanent rose 4.6pc to €3.90 after reports that IL&P is close to completing a securitisation that will unlock €200m of capital, taking it closer to participation in a consolidation of Irish lenders. "Retaining the VIF capital release within the life company also ensures an adequately capitalised life company which may be in a position to make distributions to investors from 2011 when the government-guaranteed bank deconsolidates from the group," Goodbody analyst Eamonn Hughes said in a note to investors.

Aer Lingus was another big gainer, rising 5.3pc to 69c on hopes that the airline's latest restructuring plan agreed by employees will be enough to keep the airline in business.

Forecasts

Pharma giant Elan extended the previous session's gains, rising 6pc to €5.63, after partner Biogen said annual sales of multiple sclerosis drug Tysabri topped $1bn for the first time last year and Elan reiterated profit forecasts.

Allied Irish Banks gained 4.2pc to €1.49 after the stock was rated new overweight at Morgan Stanley. Rival Bank of Ireland fell a fraction of a cent to just under €1.50. The bank was rated new equal weight by the same brokerage and "reduce" by AlphaValue analysts David Grinzstajn, who gave a six-month target price of €1.40 per share.

Another stock to post gains after an analyst report was Irish Continental, which climbed 1.7pc to €14.60 after Dolmen Stockbrokers analyst Edward Keeling reiterated a buy recommendation in a report on the ferry operator.

Stocks all over Europe posted gains as the market showed signs of relief that the ECB wouldn't quickly stop stimulus measures. Some shares pared their advance afternoon trading after a US Commerce Department report showed sales at retailers unexpectedly fell 0.3pc in December following a gain the prior month.

Rio Tinto Group, the UK mining company, led basic-resource producers higher after its iron ore output increased. SAP, the German maker of business-management software, climbed to a 15-month high after saying revenue from its main business beat estimates.

Irish Independent

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