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ISEQ steady-CRH in US examined

Wednesday, January 30 08:57:48

The ISEQ is steady this morning at 3,559 as European markets mark time in advance of further US data due this week.

The US housing market is becoming a real driver of the US economy and the implications for Ireland's CRH is examined by Davy Stockbrokers:

The latest data for the S and P/Case- Shiller Home Price Index, released yesterday, show that on a seasonally adjusted basis the 20-city composite increased by 0.6pc month-on-month (+5.5pc year on-year) in November. This is the 10th consecutive month-on-month increase and leaves the seasonally adjusted index at a level not seen in over two years.

Analysis: The S and P/Case-Shiller index is a leading measure of U.S. home prices and yesterday's data highlight a continuation of the recovery in the U.S. housing market.

Although it is c.23pc off its 2007 high, the seasonally adjusted index has recovered by c.6pc from its January 2012 low.

Conclusion and Action: Yesterday's announcement, which was broadly in line with expectations, is encouraging for the U.S. housing market and will add to the positive momentum that has been building in the sector of late. New home sales are near a 2-year high, existing home sales are near a 3-year high, housing starts are at a 4-year high and the NAHB / Wells Fargo Housing Market Index is at its highest level in over 6 years. All of this points to a sustained recovery in the U.S. housing market, which augers well for CRH as the Group generates c.22pc of Americas EBITDA (10pc of Group) from the U.S. residential construction market according to Davy Stockbrokers.