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ISEQ closes roller-coaster week lower

Friday, January 24 17:41:59

The ISEQ plunged over 100 points today as investors took profits amid a European sell-off and flight to safety.

At the close, the index was down 100.99 points to 4,714.09.

A full-scale flight from emerging market assets accelerated, setting global shares on course for their worst week this year and driving investors to safe-haven assets including U.S. Treasuries, the yen and gold. U.S. stocks slumped, with the benchmark S&P 500 falling as much as 1.5 percent. Concerns about slower growth in China, reduced support from U.S. monetary policy and political problems in Turkey, Argentina and Ukraine drove the selling.

Yesterday, the National Association for Home Builders (NAHB) stated the Remodelling Market Index (RMI) remained unchanged qoq at 57 in Q413 (57 Q313, 55 Q213, 48 Q113) and represents the highest reading since Q404. The future market conditions component of the index rose from 56 in Q313 to 58 in Q413 (56 Q213, 48 Q113). Shares in CRH fell 57c to E19.18.

Total Produce shares fell 4c to E0.89. Two significant pieces of newsflow coming from Chile over the past few weeks show a difficult backdrop for some players in the fruit industry. Firstly, reports before Christmas suggested that fruit exports from Chile could fall by as much as -22pc (c.$1bn) this year as the harvest was badly affected by extreme frost at the end of 2013. Furthermore, Chile's main port in San Antonio has now entered its third week of strike action. Fruit shipments were down c.28pc yoy in the first week of January. If this continues for an extended period there may be some longer lasting issues for both Chilean growers and its global distributors. The shortage of supply from Chile as well as other major exporters like South Africa has caused stone fruit (c.15pc of Total Produce sales) prices to spike in Europe. "While the above developments may result in a difficult year for some distributors, particularly those who procure primarily from Chile, we do not believe it will have a significant impact on Total Produce's performance in FY14. As a result of its expansive procurement base from over 40 countries, Total Produce will be able to source from one of its other growers to meet demand. This highlights Total Produce's competitive advantage over the majority of its peers, as its wide procurement base ensures a consistent flow of produce year round. We expect that retailers will continue to encourage suppliers, like Total Produce, to consolidate their respective industries to increase the consistency and quality of supply," said Goodbody.