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ISEQ dips as investors wait and see

Tuesday, September 11 17:37:54

The ISEQ index of Irish shares dipped back in to the red today as investors fret about the strings that Germany may attach to the eu r o zone bailout fund and the chance the U.S. may not deliver widely awaited stimulus.

The index was down 13.79 points to 3,249.50.

The German Constitutional Court is expected to approve the European Stability Mechanism on Wednesday. But it may impose conditions, leading to a delay in the European Central Bank's new bond-buying programme, which investors have cheered as a step to bring down sovereign borrowing costs and tackle the euro zone crisis. Uncertainty also hangs over Thursday's U.S. Federal Reserve policy decision. Markets are priced for fresh stimulus while economists give only a 60 percent chance of a third round of quantitative easing coming as soon as this week.

Kingspan has announced the completion of the ThyssenKrupp Construction Group (TKA) acquisition in a deal worth a total of E65m. The Irish confirmed the acquisition of ThyssenKrupp Construction Group, the insulation business of German steel giant ThyssenKrupp, for a total consideration of E65 million. The company acquired Dubai-based Rigidal Industries for E31.44 million. German-based ThyssenKrupp's steel business operates seven separate sites across mainland Europe. "With the TKA deal now completed, from here on it is all about execution and delivery. Given that the TKA business is currently loss-making, restructuring measures are required. We are confident that Kingspan can deliver on these and possibly in a shorter timeframe than has been suggested (the target is to get the TKA margin to group level by 2015). Along with the structural and cyclical arguments (respectively organic growth thanks to product development and the impact of building regulations, and trading margins well below the long-term average at present), we believe that the TKA deal adds an exciting third tier to what is an already impressive Kingspan investment case," Davy's analyst, Flor O'Donoghue said this morning.

Kingspan's shares rose 3c to E7.98.

Betfair has issued (September 11th) a Q1 interim management statement covering the period from May to July. The revenue numbers provided are marginally (2.2pc) ahead of expectations, driven entirely by a better-than-expected out-turn in sports. The group has announced that its CFO, Stephen Morana, is to step down from his position once a successor is appointed. Paddy Powers' shares fell 164c to E56.21.