CRH and banks drive ISEQ advance
Published 22/12/2010 | 05:00
IRISH shares advanced, led higher by CRH and the banks after the European Commission approved cash injections for three of the nation's lenders and shares across Europe posted gains.
The ISEQ closed up 40.83 points, or 1.4pc, at 2,875.56 as stock exchanges in 17 of western Europe's 18 stock exchanges posted gains.
Bank of Ireland jumped 8.6pc to 34c, while Irish Life & Permanent ended the session 7.8pc higher at 98c and Allied Irish closed up 2.7pc at 42c.
AIB will have to submit a new restructuring plan to Brussels after the commission rubber-stamped the Government's latest cash injection into the bank.
Irish bonds fell after the commission added that AIB's junior bondholders would have to take a big hit in a future restructuring.
"With regard to Allied Irish Banks, the final decision will depend on the commission being satisfied [it] will be commercially viable in the long term without further injections of taxpayers' money [and] that there is a significant contribution by the bank's shareholders and subordinated debtholders," the commission said.
Both AIB and NCB Stockbrokers were fined for separate regulatory breaches, with the bank shelling out €2m and the stockbroker paying €100,000.
CRH, the biggest component in the ISEQ, surged 2.9pc to €15.84 after German rival Hornbach Holdings reported strong third-quarter profits at its Baumarkt chain of DIY stores. CRH owns a smaller chain of DIY stores operating in northern Germany.
Aer Lingus fell 1.7pc to €1.13 after the airline made a once-off cash payment of €25.3m to the Aer Lingus Employee Share Ownership Trust and snow brought airports across Europe to a standstill.
European stocks rose as China said it took "concrete action" to help limit the sovereign-debt crisis.
The benchmark Stoxx 600 advanced 1pc to 281.11 at the close in London. The gauge has gained 7.4pc this month as investors speculated that Europe's debt woes would not derail the economic recovery.
"General economic news flow continues to improve and sovereign-debt concerns are probably priced in," Kevin Lilley, a fund manager at Royal London Asset Management, said. "We are also getting mergers and acquisition activity coming through which is supportive."
BHP Billiton, the world's largest mining company, rallied 2.9pc in London as copper advanced for a third day. Rio Tinto Group, the third-largest miner, gained 2.6pc.
DSM jumped 3.9pc to a 21-year high after the world's largest vitamin maker agreed to buy Martek for $31.50 a share in cash, adding the US maker of ingredients for baby food in its biggest takeover in seven years.