Business World

Friday 23 March 2018

Uncertainty over IMF funding sends traders into sell-off mode

Anglo Irish Bank chairman Alan Dukes suggested the country might need more funds from the IMF. Photo: Getty Images
Anglo Irish Bank chairman Alan Dukes suggested the country might need more funds from the IMF. Photo: Getty Images

Peter Flanagan

IRISH shares fell yesterday, after the news that the country may have to seek further funding from the IMF and the government confirmed it would not inject fresh capital to the banks until after the general election.

By the close the ISEQ Overall Index had dropped 1.8pc, or 53.98 points, to close at 2,941.85.

The market saw a sell off from the opening and progressed lower throughout the day. It's closing price was the lowest point the index hit all day.

Financial stocks were hit hard after the government said it will postpone capital injections into Allied Irish Banks, Bank of Ireland and EBS until after the election on February 25 and the chairman of Anglo Irish Bank suggested the country might need more funds from the IMF.

The three lenders "are adequately capitalised and the short delay poses no regulatory or stability issues," the department of finance said but Tuesday's pronouncement from former finance minister and current Anglo Irish Bank chairman Alan Dukes that the country might need to go back to the IMF for another €15m to inject into the banks continued to send traders to the exits.

Bank of Ireland fell 6.2pc to 36c while AIB was down 3.5pc at 28c. Irish Life & Permanent dipped 2.06pc to 95c.

Food stocks were hit for a second successive day as commodity prices hit new highs.

rose to the highest in more than two years in Chicago as drought threatened crops in China, the world's biggest grower, and as governments increased purchases to contain inflation and protests.

Corn also rose after the US said its stockpiles of the crop before the next harvest would be nearly 10pc smaller than previous indicated.

Aryzta fell 4.04pc to €31.44 while Kerry group slipped 1.91pc to €24.70. Glanbia fell 3.15pc to €4.

Just about the only sector to have a decent day was oil and gas with Tullow Oil closing up 3.75pc at €16.60 while Aminex rose 4.4pc at 12c.

Meanwhile National benchmarks fell in 12 of the 18 western European markets. France's CAC 40 dropped 0.4pc and Germany's DAX fell less than 0.1pc. The U.K.'s FTSE 100 Index slid 0.6pc while the Stoxx Europe 600 0.4pc.

"We've had months of uninterrupted gains," said Philipp Baertschi, chief strategist at Bank Sarasin in Zurich. "After that, we're due for a break. In the short term, sentiment is overly optimistic. The market is due for a correction, but we see it as a buying opportunity."

Statoil lost 3.2pc after Norway's largest oil company's fourth-quarter net income missed estimates.

LSE surged 3.1pc in London after the 210-year-old bourse operator agreed to buy Canada's TMX Group in an all-share transaction valued at about C$3.2 (€2.34bn) as the companies cut costs to counter lost market share.

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