Saturday 24 March 2018

CRH rallies on construction boost

Thomas Molloy

IRISH shares gained as CRH and the banks followed advances by their counterparts elsewhere in Europe.

CRH closed up 2.5pc to €16.39 on optimism that the construction sector may have turned a corner at home and overseas. In Ireland, the sector saw its first rise in new business in three years last month according to the Ulster Bank Construction PMI, which also showed that overall activity fell by the smallest amount in three years last month. The survey showed that confidence among construction companies about future business reached its highest level since early 2007.

CRH rivals such as Saint-Gobain and Vinci gained at least 2.4pc when their shares tracked a rally in US homebuilders following the Federal Housing Administration's announcement that it will begin accepting applications for its Short Refinance programme.

Bank of Ireland soared 5.1pc to 87c while Irish Life & Permanent was up 2.7pc to €1.90 as banks everywhere gained on optimism that the Federal Reserve may try to boost the US economy.

"The market has a firm eye on the meeting of the Fed that starts tomorrow," said Joshua Raymond, a markets strategist at City Index in London. Investors "are betting that the Fed could start to inject extra stimulus into the markets to help maintain the US economic recovery".

McInerney Holdings was unchanged at 5c after the home builder said it is at an "advanced stage" of talks with an international equity partner regarding a "substantial" injection of new capital. The company said it is in "advanced and constructive" talks with its UK lenders over a proposed restructuring plan.

Dragon Oil closed up 1.3pc at €5.47 after the Turkmenistan-focused oil and gas company said profit jumped by almost a third as crude oil prices rose.

Elsewhere in Europe, the Stoxx Europe 600 Index gained 1.4pc amid speculation about further economic stimulus measures. National benchmark indexes climbed in 16 of the 18 western European markets. The UK's FTSE 100 Index and Germany's DAX rallied 1.5pc, while France's CAC 40 gained 1.7pc.

BP climbed 1.7pc as the oil company said the Macondo well will be permanently sealed this month, and crude climbed above $81 (€61) a barrel in New York. Total, Europe's third-biggest oil company, increased by 2pc.

Connaught, which includes Bank of Ireland among its creditors, plummeted 29pc after analysts said the crisis-stricken public-housing maintenance company is in talks with lenders over a potential debt-for-equity exchange.

International Power rallied 3.7pc and GDF Suez advanced 2.3pc on rumours that the companies are close to agreeing a transaction that would have France's second-largest utility take control of the British company.

Irish Independent

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