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Draghi does nothing for ISEQ shares

Thursday, October 04 17:37:15

Today's keenly awaited meeting of the ECB's policy committee failed to give the ISEQ the hoped-for lift as investors saw little concrete from the eurozone central bank.

At the close, the index was down 9.38 points to 3,301.77.

The euro notched a two-week high against the dollar and global shares edged higher after the head of the European Central Bank reiterated a commitment to preserve the euro. U.S. data showing the number of Americans filing new claims for unemployment benefits rose less than expected last week added to a positive tone in equity markets. Oil prices rebounded a day after registering a steep fall as escalating tensions between Syria and Turkey raised concerns over supplies from the Middle East. ECB President Mario Draghi, speaking after the bank held benchmark lending rates steady at 0.75 percent, said "the euro is irreversible." He also said the ECB is ready to buy the bonds of troubled euro-zone economies that ask for it.

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 2c to E4.51.