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ISEQ steady-Moody's Irish comments

Friday, March 08 09:17:41

The ISEQ is steady this morning at 3,828 as World markets hit new records with assistance from Chinese exports and the expectation of positive US jobs data today.

Moody's comments on Ireland are examined by Davy Stockbrokers: Stock indices rose a little yesterday.

The Euro Stoxx 50 rose 0.4pc and the S and P 500 gained 0.2pc. The ECB decision to keep rates on hold was expected, but President Mario Draghi reassured markets by indicating that rates would remain low for as long as needed.

Separately, the Bank of England maintained the £375bn size of its quantitative easing programme, disappointing some commentators that had expected an expansion. Today the market's focus will clearly be on the non-farm payrolls reports, expected to indicate US jobs growth of 165,000 in February.

Overnight Moody's Investors Service said that a term extension of Ireland's EFSF/EFSM bailout loans will be a "very significant" development and a credit-positive event for Ireland. Moody's expects that the EU finance ministers will agree to restructure the E10.5bn of EU debt maturing in 2015 and 2016 by around six to seven years.

Moody's remains the only agency maintaining Ireland on a non-investment grade rating. However, Moody's new Ireland analyst, Kristin Lindow, indicated that should EU finance ministers follow through on their agreement to extend Ireland's loans, it would "make a big difference".

Potential ESM injections into Irish banks remain unlikely in the near term. So it may be some time before any further politically driven, credit-positive events emerge. Hence, the Eurogroup and EcoFin Council meetings commencing on April 11th in Dublin could be the catalyst for Moody's to at least upgrade Ireland to stable outlook and potentially to investment grade status according to Davy Stockbrokers.