Food and commodity stocks strongest as trading follows global trends
Published 28/01/2010 | 05:00
WHO were the best performers on the ISEQ this month? With just a few days to go before January comes to an end, we can see some sort of pattern emerging with strong performances from both food and oil stocks.
The top 10, starting with the the best performer, were oil explorer Aminex; pharmaceutical company Elan; titanium miner Kenmare; property developer Blackrock International; fruit company Total Produce; Allied Irish Banks; agri-nutrition specialist Origin Enterprises; explorer Dragon Oil; cement company Readymix and food giant Aryzta. This breaks down as three explorers, three food companies, two property-related stocks, one bank and one pharmaceutical company.
The interest in food and commodities mirrors similar trends elsewhere in the world and over long periods.
Veteran US investor John Dorfman wrote back in November that energy, materials and industrials usually do well in the early stages of economic recoveries and recommended a few stocks in these groups such as US oil companies Boots & Coots and National-Oilwell Varco, and materials group Cliffs Natural Resources.
Here in Ireland, where we may just be seeing the beginning of the end of the recession, the stock market may possibly be telling us something similar, even if it is early days and some stocks on the ISEQ move by large amounts on small numbers of trades.
The month's best performer, Dublin-based Aminex, is something of a wild card and is not for widows and orphans, although it has reported two pieces of good news this month that helped propel it to the top of the leaderboard.
The first came early in the month when it said it had made progress in talks with North Korea over starting exploration in the country.
"There are signs of progress," chairman Brian Hall said, before hinting that Aminex may have more to report "in the next couple of months".
Aminex has a 20-year contract to develop the oil industry in North Korea. A week later, the stock jumped 15pc in London trading after the start of a new well in southern Tanzania. Aminex is being advised by Tullow Oil, which is also involved.
Whatever one thinks about penny stocks, surely there is no more adventurous stock on the ISEQ than this one.