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ISEQ rises amid hopes for ECB action

Monday, September 03 17:34:16

The main Dublin shares index staged a modest recovery this morning, though trading was thin as investors eye global developments for leads.

The ISEQ was up 9.80 points to 3,170.59.

A contraction in manufacturing business spread further around the world in August as the euro zone's troubles inflicted more damage on the global economy, business surveys showed today.

The three-year-old sovereign debt crisis has probably thrown the 17-nation euro zone back into recession in the current quarter. With no firm signs of any resolution, households and companies are wary of spending and demand for goods is drying up.

At home, shares in fruit shipper, Fyffes, rose 3c to E0.50 after it reported adjusted EBITA that increased 31.2pc year-on-year (yoy) in the first half, driven by a strong performance across all product categories. As a result of the strong H1 performance, the company it is increasing its full-year guidance - for the second time this year - to an adjusted EBITA range of E28-33m from E25-30m previously. Revenues increased 20pc yoy with some FX benefits, but also led by strong volume growth across all product categories. Bananas performed strongly, accounting for the bulk of the yoy increase in profits. Volumes were strong as the company continues to win market share in Europe. The profit out-turn is all the more impressive in light of the headwinds it has faced in fuel and FX on a year-to-date basis. Its focus on cost efficiencies led to a 30bps increase in group margin yoy.

Dublin-based Smurfit Kappa Group (SKG), one of the world's largest manufacturers of paper-based packaging products, today said it is to launch two bond notes with a total value of E400m.

The firm said that its wholly-owned subsidiary, Smurfit Kappa Acquisitions, is issuing E200 million of euro denominated senior secured notes due 2018 and $250 million (E198.9m) of U.S. dollar senior secured notes due 2018. It said that the net proceeds of the offering will be used to repay all of the existing 7.75pc senior subordinated notes due 2015 that were issued by Smurfit Kappa Funding plc on 31 January 2005 and to pay certain fees and expenses related to the offering. "Any excess proceeds will be used to repay term loans outstanding under the Group's senior credit facility. The notes are being offered in a private placement and there will be no public offering of the notes," the company's statement said.

Meanwhile, Fitch Ratings has assigned Smurfit Kappa Group's (SKG) prospective senior secured notes, to be issued by Smurfit Kappa Acquisitions, an expected rating of 'BB+(EXP)'. The final rating is contingent on the receipt of final documents conforming to information already received.

The agency has also affirmed SKG's Long-term foreign currency Issuer Default Rating (IDR) at 'BB', with a Stable Outlook. Shares in the group rose 22c to E6.70.