Thursday, August 22 17:35:11
The ISEQ rebounded today as further signs emerged of a eurozone recovery and the Fed signalled an easing-off of stimulus measures.
The ISEQ was up 31.57 points to 4,218.78.
European shares gained, snapping a three session losing streak after manufacturing survey data suggested that growth was taking root in the euro zone. Business activity across the euro zone picked up more quickly than expected, Markit surveys showed, led higher by growing demand for German exports.
Meanwhile, yesterday's FOMC minutes all but confirmed that the Fed will begin to taper QE before the end of this year, possibly as soon as end-September. The minutes also pointed to a completion of the process by the middle of next year. One surprise was the suggestion of relaxing the Fed's unemployment threshold below 6.5pc, anchoring current low rates for longer.
At home, shares in Grafton Group rose 15c to E6.13. Davy expect Grafton's upcoming interim numbers to confirm that it is in ever-improving health. Of particular interest will be the extent to which the strong end to the first half has continued. Grafton's bottom line is very sensitive to modest changes in volumes. "We believe that the forecast risk to this movement in volume/margin mix is on the upside. The stock's rating (over 20x current year estimates) shows that Grafton is not being valued on near-term estimates, which we believe is correct," the broker said.
Independent News and Media shares remained flat at E0.06. The disposal of INM South Africa has been in the pipeline for some time. Yesterday's announcement was largely a formality, as agreement on the disposal was reached on April 8th and Competition Commission approval was received at the end of July. However, it formally marks the end of the first stage of the group's debt restructuring process and shows tangible progress towards the goal of reducing net debt to c.E120m by year-end.