Wednesday 21 March 2018

Downgradings spark fall in shares

Thomas Molloy

IRISH shares fell for the first time in eight days after brokers downgraded several companies. The benchmark ISEQ closed down 7.11 points, or 0.2pc, 3008.73 points.

Ailing property developer Blackrock International, which recently admitted it is breaching banking covenants, slid 14.3pc to 4c after the stock was downgraded to "neutral" from "outperform" at Davy by analyst Stephen Lyons. Origin Enterprises closed down 5.3pc at €2.22 after it had its rating reduced to "hold" from "accumulate" at NCB. The broker said it expects the company to report "challenging" trading when it publishes results tomorrow.

McInerney Holdings, a home builder here and in the UK, was down 2.8pc at 17c as shares of property developers in Britain tumbled after shopping centre operator Liberty International disappointed the market with lower-than-expected net asset values.

Greencore was down 1.1pc at €1.30 after angry shareholders tore up their ballot papers and marched out of a meeting which went on to rubber-stamp the sale of the malt business.

Shares in the banks extended the previous session's declines after Stock Exchange boss Deirdre Somers told a Dail committee it may not yet be time for the exchange to withdraw the short selling ban. The ban has "adversely affected" liquidity in Irish bank shares, she said. Allied Irish closed down 1.3pc at €1.33 while Bank of Ireland fell 2.2pc to €1.13.

Elsewhere in Europe, stocks were little changed as a wider-than expected loss from European Aeronautic, Defence & Space offset gains among food and beverage producers and health-care companies. The Stoxx Europe 600 Index slipped less than 0.1 percent to 256.73. National benchmark indexes retreated in 12 of the 18 western European markets. Germany's DAX and France's CAC 40 each rose 0.2pc, while the UK's FTSE 100 slipped 0.1pc.

EADS, owner of planemaker Airbus SAS, slid 2.8pc after posting an annual loss and scrapping its dividend.

Food companies and drugmakers were the biggest winners in the Stoxx 600. Nestle, the index's second-biggest member, rose 1.2pc as JPMorgan raised its recommendation on the stock to "overweight" from "neutral." GlaxoSmithKline Plc, the UK's largest drugmaker, climbed 1.6pc as chief exectuvie Andrew Witty said the company plans to bolster earnings by selling to more people in middle income countries after cutting prices in the world's poorest nations.

Inchcape, a UK operator of car dealerships, rallied 7.4pc, the biggest gain in more than three months after JPMorgan analyst Gillian Hilditch reiterated her "overweight" recommendation on the shares and advised buying the stock before today's results, saying "the current share price presents an attractive entry point."

Irish Independent

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