Mortgage-default warning makes IL&P big ISEQ loser
THE ISEQ fell for a second day yesterday despite gains elsewhere in Europe and further afield after US Federal Reserve Chairman Ben Bernanke said he would keep interest rates low to ensure the economic recovery.
The ISEQ closed down 32.73 points, or 1.1pc, at 2917.58, with more than two shares falling for every gainer as political tension in Turkey and Greece led some investors to move into safer havens.
The MSCI World Index of stocks in 23 developed nations gained 0.3pc by yesterday evening while the MSCI Emerging Markets Index fell 0.8pc as political tension rattled investors. National benchmark indices advanced in 14 of the 18 western European markets. The UK's FTSE 100 gained 0.5pc. France's CAC 40 and Germany's DAX both increased 0.2pc.
Among the biggest fallers was Irish Life & Permanent (IL&P), which slipped 5.7pc to €2.92 after warning shareholders that mortgage-default rates may rise in tandem with increased unemployment.
"Property prices are continuing to decline in Ireland and expectations of higher unemployment rates may, if realised, lead to higher delinquency rates in the future," IL&P said in a prospectus for a bond sale.
Bank of Ireland slipped 4pc to €1.07 after it raised $1bn (€738m) of two-year funding through a senior unsecured government-guaranteed fixed-rate transaction yesterday.
Allied Irish Banks closed down 2.9pc at 99c -- the first time it closed under a euro since last May. The ISEQ's financial index has dropped 16.5pc this year compared to a 1.9pc fall in the more general benchmark.
Kerry Group was one of the few shares to post a gain, eking out a 1pc rise to close at a new record high of €23.53 following Tuesday's excellent results and suggestions that it should do a share split to boost liquidity.
Elsewhere in Europe, shares rose as French chemicals giant Rhodia and Fresenius Medical Care reported results that exceeded analysts' estimates.
Construction and chemical shares were among the biggest decliners among the 19 industry groups in the Dow Jones Stoxx 600. German building group Bilfinger Berger plunged 5.4pc to €46.48 after a probe began into a subway project in Dusseldorf. Carnival rose 3.5pc to £24.29 after the world's biggest cruise-line operator said one of its brands would increase prices by as much as 5pc next month because of record bookings.
Travis Perkins, the UK-based building supplier that owns the Wickes home-improvement chain, dropped 5.4pc to £7.10 after saying activity levels in its markets "remain fragile".
Wall Street was higher around the time European bourses were closing. The Dow Jones, S&P 500 and NASDAQ Composite were up between 1pc and 1.1pc. Energy companies gained after crude futures rose to more than $80 a barrel, boosted by the dollar falling after Mr Bernanke's comments.