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ISEQ flat despite Hollande backing

Monday, October 22 17:37:37

The ISEQ closed flat today despite undoubted progress in Taoiseach Enda Kenny's efforts to secure a bank debt deal for Ireland.

The index rose just 2.03 points to 3,242.27.

Taoiseach Enda Kenny has picked up a supporter in his efforts to secure a bank debt deal for Ireland with French President, Francois Hollande today saying that Ireland needs to be treated as a special case.

"Ireland is a special case and deserves to be treated as such," Mr. Hollande said after a meeting with the Taoiseach in Paris. Mr. Hollande's words echoed those of German Chancellor Angela Merkel, who said over the weekend that the euro zone would look at Ireland's plans to lessen the huge debts it had amassed saving stricken banks as a "special case."

The endorsement of the leaders of the euro zone's two largest economies breathes fresh life into Ireland's efforts to shift some of the debt incurred recapitalizing its banks off its sovereign balance sheet.

The comments came after a weekend of confusion following remarks made by Ms. Merkel that had appeared to torpedo Ireland's hopes to get the euro zone to finance the huge costs it accumulated saving formerly private banks. Ms. Merkel had taken a hard line Friday at the end of a European leaders' summit in Brussels on Spain's hopes that the euro zone would finance the debts the country incurred in recapitalizing its lenders during the euro-debt crisis.

Shares in Irish Swiss bakery group, Aryzta rose 10c to E38.30. McDonalds said in its Q3 statement on Friday that October's like for like (lfl) sales are "currently trading negative". This may reflect the downturn in Europe and follows a recovery in lfl sales from the July dip, said Goodbody's Stockbrokers. "While the headline Q3 sales were positive, they were actually lower than expected in the US at +1.2pc (versus 2.2pc market expectations), with Europe up 1.8pc and RoW +1.4pc." It said that the slowdown in McDonalds, and specifically a negative lfl if sustained, is unwelcome news for ARYZTA whose Fresh Start Bakeries is a supplier to McDonalds, especially in Western US. "However, in addition to lfl sales, volume sales will benefit from new store openings. Additionally, McDonalds, along with other food service companies is updating their menus to capture more custom. This plays into ARYZTA's ATI sales efforts in the US and we believe there are some tentative signs of new business emerging from this programme."

Shares in oil and gas explorer, Petroneft, rose 1c to E0.09 after it said that it has found 'outstanding' production rates at its newly completed well in Siberia.

Its Arbuzovskoye well 102, the second of ten planned new production wells on the Arbuzovskoye oil field, has been successfully completed and brought into production at an initial rate of 540 bopd (barrels of oil per day).

This marked the highest flow rate without fracture stimulation in the firm's Licence 61 area, according to the company.

"This is well above our target rate for these wells and further confirms the excellent continuity and good reservoir properties in the eastern portion of the field," said Chief Executive Dennis Francis.

"While there may be some variation in results, we look forward to the additional wells in Arbuzovskoye over the coming months as we continue to focus on materially increasing our production profile and cash flows."