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ISEQ at new high as confidence returns

Thursday, March 14 12:50:24

The ISEQ surged to a new high this morning as investors received a welcome boost in the form of a highly successful auction of long-term Irish debt.

The index rose 29.81 points to 3,888.44.

Despite being well flagged over recent weeks, the sale of a new 10-year benchmark bond yesterday, the first since 2010, was greeted very favourably by markets. Goodbody flagged yesterday that a sale of between E2bn-E3bn would be a reasonable result, but, in the end, the sale of E5bn of the new bonds, out of total demand for E12bn, provides another fillip in Ireland's efforts to fully exit the IMF/EU programme.

"Whether Ireland can now claim to have returned to full market access and thus be eligible for the ECB's OMT programme is a debatable point. Given that Ireland's funding costs are now well below Italy and Spain and the E5bn raised by Ireland is not far off the E7bn that Italy managed to borrow yesterday, Ireland has a very good case to argue that it is meeting those conditions. Indeed, head of the NTMA John Corrigan stated yesterday that recent sales, including yesterday's, constituted "a resumption of normal access to the markets'," the broker said.

CRH gained 45c to E17.52, Smurfit Kappa climbed 24c to E12.66 and Ryanair gained 3c to E7.00.