Massive rise in share sales signals faith in the market
THE number of share sales in Irish private companies rocketed last year, in the latest sign of confidence returning to the business world.
Figures from Barclays Bank show that the 938 companies recorded share sales in the first half of this year.
That is a 230pc increase in the same period of 2012.
The increase in activity – whether it is investors taking positions in companies, or full takeovers – is seen as a strong indicator that business people have enough faith in future economic conditions that they can plan ahead in relative safety and spend capital without fear.
Barclays said the average profitability of businesses with shares changing hands was €1.7m this year – well up on the average loss of €2.4m in the same period last year, indicating a shift in activity from loss-making companies to more profitable businesses.
The finance, retail and industrial sectors showed the highest levels of investment activity, Barclays added, making up 56pc of the overall total.
Barclays' Irish head of wealth and investment management Pat McCormack commented: "The increased level of share sale activity in private companies in Ireland is very encouraging.
"There are indications that as interest rates continue to remain very low, and confidence in the Irish market gradually improves, investors and corporates looking for yields are increasingly looking for opportunities to put their cash to use, which is supporting and driving activity in the market.
"The strong profitability of the companies with increased shareholder activity would also suggest higher realised values and renewed wealth creation, which is very positive," he added.
Chambers of Commerce Ireland director Ian Talbot said the findings were a good indicator of ongoing improvement in economic performance.
"These figures reflect growing confidence in the ability of the Irish economy to register economic growth in the next two or three years.
"Investors who have been waiting in the wings while competitiveness challenges were addressed and the Government's budgetary situation was stabilised are now clearly emerging and finding good value in the early stages of the recovery," he added.