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ISEQ rebounds after Anglo debt deal

Thursday, February 07 17:43:42

The ISEQ rebounded from yesterday's fall as the Government secured a deal from the ECB on IBRC debt after the Government rushed through emergency legislation to wind up the former Anglo Irish last night.

The ISEQ rose 40.41 points to 3,557.13.

Yields on Irish bonds fell sharply this afternoon following what Taoiseach Enda Kenny called an "historic" deal with the ECB on Anglo's Promissory Notes. Yields on benchmark Irish 2020 bonds, which rose to a high of almost 15 percent 18 months ago when the euro zone debt crisis was at its height, fell 10 basis points to 4.041 percent after Kenny's speech. Borrowing requirements will be cut by 20 billion euros over the next decade and 1 billion euros will be shaved off its annual budget deficit, still proportionately among the highest in Europe despite years of tax rises and spending cuts. "The new plan will likely materially improve perceptions of our debt sustainability in the eyes of potential investors in Ireland," Mr Kenny said.

CRH shares climbed 8c to E15.33. HeidelbergCement has reported Q4 EBITDA of E691m (+8pc yoy / +4pclfl) which is 7pc ahead of consensus. This was largely driven by margins as cash cost savings reached E384m in the year versus management guidance that it was confident that it would exceed E300m. On the outlook, management expects the recovery to continue in the US, especially in the residential sector. In Europe and Central Asia, while markets will be stable or continue to grow in Germany, Northern Europe, Russia and Central Asia, weak markets are expected in all other markets (i.e. UK, Benelux, Ukraine, Poland, Czech Republic, Romania, Georgia and Kazakhstan). "These results in our opinion highlight to us why CRH's profit development is likely to underperform due to: (i) A larger exposure to mainland Europe and limited presence in emerging markets: (ii) No cement in the US; and (iii) Relatively less self-help," said Goodbody's Robert Eason.

This morning Britain's Bellway released a trading update for the six months to the end of January 2013. The group sold 2,597 homes in the period, up 6pc yoy. The average selling price increased by over 2pc to £187,000 driven by changes in geographic and product mix. Shares in Grafton rose 10c to E4.54.

By Joe Downes