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ISEQ pares losses after US GDP data

Friday, October 26 17:39:30

The ISEQ managed to shrug off this morning's losses to close flat as US GDP figures came in slightly better than expected.

The index rose 1.89 points to 3,241.84.

Global shares fell while U.S. Treasuries climbed with safe-haven support as lacklustre corporate earnings reports undermined investor confidence. Although data showed a pick-up in U.S. economic growth in the third quarter, gloomy earnings and outlook statements from major global companies such as Apple and Amazon , South Korea's Samsung and Renault and Ericsson in Europe corroded hopes of a recovery in the global economy.

Shares in Kerry Group rose 65c to E41.25. Kerry will report its Q3 results next Wednesday. Goodbody anticipate like for like (lfl) growth in the period of 2.7pc, comprising 1.9pc from net volume growth and 0.8pc from pricing. The volume growth, in particular, will represent a pick-up from a relatively weak Q2 when we estimate lfl volume growth for the Group at 0.8pc. Kerry Ingredients will be the driver of this growth. The period will be impacted by continued rationalisation of the company's processing facilities around the world. This, in turn, negatively impacts the reported lfl growth numbers, which would be higher again if "rationalised" volume declines are excluded, the broker said. "The anticipated improvement in Kerry's lfl sales in Q3 will bring their performance closer to the lower end of its target lfl volume growth rates of 4-6pc for Ingredients and 2-4pc for Kerry Foods. We do not anticipate any change to full-year guidance of 8-12pc eps growth (Goodbody 10.5pc)," said analyst, Liam Igoe.

Kingspan's shares fell 2c to E8.10. Lindab, a manufacturer of steel construction systems, has reported Q312 revenue of SEK1,773m (-6pc Q312 versus -2pc in 9M12) which is 5pc behind consensus expectations. Management has cited weakness across all Nordics (-9pc), slowing Western Europe (with the exception of France and Italy) and a more difficult backdrop in CEE. "With building materials companies exposed to the European construction market clearly coming under pressure in Q312 (see Saint Gobain above), we take comfort that Kingspan's FY12 forecast operating profits are underpinned by (i) the contribution from the CRH Insulation acquisition; (ii) the Environmental and Renewables division warranty provision has come to an end, and; (iii) favourable currency moves," said Goodbody.