PRODUCT PROFILE

Latest Dublin Prices

ISEQ slips ahead of ECB meeting

Thursday, October 04 12:49:16

The main Dublin shares index slipped in to the red this morning ahead of this month's ECB policy committee meeting later today.

By 12:30, the ISEQ was down 8 points to 3,303.15.

The ECB is widely expected to hold base interest rates when it meets today. The euro zone's economy shrank 0.2pc in the second quarter on an annualised basis and is in danger of shrinking again in the third. A recession is defined as two quarters of economic contraction in a row. Unemployment is at 11.4pc, the highest since the shared euro currency was introduced by the European Union in 1999. The ECB had eased investors' fears about Europe's financial crisis when it said in September that help was at hand for countries struggling with their debts.

The EBA (European Banking Authority) yesterday evening released its final report on the recapitalisation of European banks. The EBA set capital targets for European banks back in Q411 and the report yesterday updates the market on where the banks reside in the recapitalisation exercise at the end of June. Overall, the exercise led to an increase of E200bn of capital across the sector by June 2012 with the banks expected to achieve a 9pc core tier 1 target.

Bank shares here were unmoved.

Ryanair published September traffic statistics yesterday. The airline carried 7.84m passengers in the month, up 8pc yoy with load factors down 1pc to 84pc. This wraps up the key July-September quarter and Goodbody estimate that Ryanair has delivered an 8.5pc increase in passengers from a 9.7pc rise in capacity (load factors c.1pc lower yoy). "Both are a little higher than envisaged in our model (8.1pc and 8.3pc respectively)." "With no change to our cost growth or yield assumptions, the net impact from the higher pax figures (revenue) and capacity (costs) for the quarter would broadly balance out, leaving estimates unchanged. Q2 results are due early November, where the main focus will be on the special dividend, the Q2 yield performance (we have +5.7pc) and winter yield guidance. On the winter guidance, the company has guided for a flat outturn, whereas we are more hopeful, sitting on +2.5pc," said analyst, Donall O'Neill. Shares in Ryanair rose 5c to E4.54.