Monday 23 October 2017

Positive results on return to trading

John Mulligan

John Mulligan

European markets returned after the Easter break to positive trading sentiment as earnings posted by Swiss bank UBS beat analyst expectations and US motor company Ford delivered its best quarterly earnings since 1998. Earnings from firms such as UPS also encouraged investors.

The ISEQ Overall Index breached the 3,000 mark during yesterday's trading session, but yielded some of the earlier gains and dropping back below the psychologically important level. It added 19.82 points, or 0.67pc, for the day to close at 2,976.24.

There was little Irish corporate action, with investors having to largely wait until next week for any meaningful commentary as companies such as CRH and Smurfit Kappa hold their annual general meetings and either provide quarterly data or trading statements.

Among the movers yesterday were Allied Irish Banks, which rose 11.6pc, or 2.5 cent, to 24 cent. It had risen over 14pc earlier during the day. Bank of Ireland didn't fare as well. It added almost 10pc in the late morning only to close up just over 2pc at 24.8 cent.

Drug firm Elan gained 5.65pc, or almost 30 cent, to €5.59, retaking some of the ground it lost on Thursday, the last day of trading before Easter. The stock dropped 7.5pc that day, and yesterday's rise comes after the company reported solid first quarter results last week.


Fallers yesterday included fruit distributor Fyffes. It dropped two cent, or 4.65pc, to 41 cent. Listed insurer FBD shed over 33 cent, or 4.5pc, to close at €7.10 as investors fretted the firm would be hit by a levy on non-life insurance policies to make up for a €620m shortfall from the collapse of Quinn Insurance.

National benchmark indices climbed in 13 of the 18 western European markets. Germany's DAX rose 0.8pc, France's CAC 40 Index added 0.6pc and the UK's FTSE 100 gained 0.9pc.

UBS rallied 3.9 pc to 17.23 Swiss francs, the biggest increase since February. Wealth management and retail clients added a net 16.7 billion francs (€13.7bn) in the first quarter, more than double the estimate of analysts surveyed by Bloomberg. Net income was 1.81 billion francs (€1.4bn), topping the 1.69 billion-franc forecast of analysts.

"There is cause for optimism as the banks gear up" to report earnings, said James Ferguson, head of strategy at Arbuthnot Securities London. Investors must "rely on trading operations of the banks, which can do quite well or quite badly. The promising thing going forward must be mergers and acquisitions."

Puma jumped 5.8pc to €220.60, the biggest increase in 11 months. Europe's second-largest sporting-goods maker said it is targeting revenue of €3bn in 2011 as first-quarter profit rose 7.2pc to €77.7m.

(Additional reporting -- Bloomberg)

Irish Independent

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