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ISEQ bounces back on new hopes

Monday, November 19 17:37:52

The ISEQ bounced back from last week's sharp falls on new hopes that the US can avoid a fiscal cliff.

At the close, the index was up 41.70 points to 3,219.77.

CRH held the first leg of its capital markets day in London on Friday. The exercise will be repeated in New York later today. Davy said that the format of the day was interesting in that, following an introduction by the executive team (CEO, COO and CFO), each of the divisional management teams presented to smaller groups in streamed presentations. A number of points are worth noting, the broker said. Limited scope for earnings upgrades from CRH's main markets in the short term. Three markets - Poland, Holland and US Infrastructure - account for almost 50pc of CRH group profits. In Poland, while the longer-term outlook for the building materials sector remains positive - driven by continued infrastructure spending - the outlook for the next 12 months remains challenging with management expecting cement volumes in the market to decline by mid-single-digit percent in 2013. In this environment, pricing is likely to remain flat at best. We are currently forecasting flat volumes for this market in 2013. In Holland, which accounts for circa 10pc of group profits, the decline in the housing market combined with weak consumer confidence has negatively impacted CRH's performance. Despite the more favourable outcome to the recent election and subsequent clarity around the mortgage interest relief issue, CRH management does not expect the Dutch housing market to recover for 12-18 months. In the US, infrastructure spending is likely to remain flat for the next two years under the new federal highway programme, MAP-21. In the longer term, a new funding solution for US infrastructure will have to be found which could prove to be part of the overall budget negotiations in the US in the coming months. CRH shares rose 31c to E13.91.

Independent News and Media (INM) has released an IMS statement covering the first 45 weeks of the year to November 9th. Trading conditions remain very difficult, with the rate of revenue decline accelerating during the second half of the year. Year to date, total group revenues have declined by 4.1pc in euro terms; this compares with our forecast for a full year revenue decline of 3.4pc. Group advertising revenue is currently 7.2pc behind last year (Davy: -5.4pc), while circulation revenues are down 3.9pc (Davy: -3.2pc). INM's shares fell 1c to E0.05.