Wednesday 17 January 2018

Weak UK building data sparks fall

Sarah McCabe

Sarah McCabe

IRISH share prices were down marginally yesterday, as indexes fell in most of Europe following weak construction data from the UK.

The ISEQ Overall Index dropped 0.07pc or 2.6 points to close at 4,021.47. The index is still up just over 4pc in the last five trading days.

Travel software company Datalex saw some of the biggest losses; its share was down 5.6pc to 85c. It was a similarly bad day for agricultural companies. Glanbia slipped 2.9pc to €10 and Kerry Group lost 0.8pc to €42.55.

Insulation-maker Kingspan lost 1.4pc to €10.35 and CRH shed 0.85pc to €15.72. The building-materials company announced yesterday that it spent €470m on acquisitions in the first half of 2013, well above the €250m in deals completed in the same period last year.

The spend includes the acquisition of Cementos Lemona in Spain but was weighted more towards the Americas. Davy stockbrokers called the step-up in acquisition spend positive as the deals "should be significantly accretive to earnings".

AIB saw the biggest gains of the day, up 7pc to 6c. The bank recently indicated that it is 95pc through its deleveraging programme, having been 89pc complete last December. Goodbody stockbrokers estimates that it will take a €360m deleveraging haircut this year.

AIB was followed by INM, up 6.2pc to 6c. Paddy Power gained 1.8pc to €67.93 while Fyffes bucked the downward trend for food companies, up 1.4pc to 71c.

In Europe, stocks were broadly down with national benchmark indexes retreating in 13 of the 18 western European markets. France's CAC 40 dropped 0.7pc and Germany's DAX slipped 0.9pc. The UK's FTSE 100 lost 0.1pc, after a report showed that British construction rose at a slower pace than predicted in June.

"After the losses of last month, and the rally before that, investors are unsure which direction equities will go," said Guy Foster of Brewin Dolphin Securities in London.

"The UK economy has been stronger, so investors went in expecting construction data to beat estimates."

The composite Stoxx 600 Index slipped 0.4pc to 287.13 at the close of trading, pushed by declines among European banks. Commerzbank and Deutsche Bank, Germany's largest lenders, slid 4.6pc to €6.16 and 1.5pc to €31.92 respectively. German medical company Fresenius Medical, the world's biggest provider of kidney dialysis, tumbled 8.7pc after the US government proposed cutting payments for dialysis-centre operators next year.

Elsewhere, shares in Burberry were up 2.9pc bringing its share price to £14.05. HSBC upgraded the stock to overweight and said there was scope for further price rises because the company no longer traded at a premium to its peers.

Irish Independent

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