Tuesday, February 12 12:52:09
The ISEQ rose to the 6,000 level this morning after yesterday's decline as Standard and Poor's upgraded Ireland's outlook following the Prom Note deal last week.
The index rose 21.72 points to 3,600.54.
S and P became the first of the ratings agencies last night to act on the back of last week's promissory note deal. The agency revised its outlook on the Irish sovereign to stable from negative, while leaving the Irish rating on BBB+. The change in the outlook reflects its view that "the exchange of promissory notes for longer-term government bonds significantly reduces the Irish government's debt servicing costs and refinancing risk, and supports medium- term fiscal consolidation". It also believes the deal improves Ireland's chances of exiting the IMF/EU programme at the end of the year as planned.
Shares in Dragon Oil were flat at E6.87. Dragon Oil's FY12 results statement this morning provided little in the way of incremental news with guidance in terms of production, well count and rig timing unchanged from that outlined last month. With net cash of $1.7bn (net of abandonment liabilities) previously outlined, variances in terms of the results relate to revenue of $1,155m compared to our expectation of $1,175 and a higher cost of sales ($329m v $299m in our model) with the bulk of the latter accounted for by an $18m overlift charge, which balances out from period to period. Net income, as a result, for the year amounted to $600m compared to our expectation of $652m with earnings of 119c v 129c in our model. A full year dividend of 30c was declared slightly below our expectation of 32c.