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ISEQ closes the week on a new high

Friday, February 28 17:38:31

The ISEQ rose sharply in afternoon trading today, breaking ground last seen nearly six years ago as Wall St surged and the euro hit a new one-year high.

By the close, the index was up 60.01 points to 5,195.97.

Stocks on Wall Street zoomed to a record high today, shrugging off a revised downward estimate to U.S. growth, while the euro hit its highest level this year after inflation in Europe stabilised, cooling expectations of looser monetary policy.

The benchmark Standard and Poor's 500 stock index surged to an intraday record after a round of mostly positive economic data. A discouraging read on U.S. gross domestic product, however, cast some doubt on whether higher equity valuations are justified.

GDP expanded at a 2.4 percent annual rate, down sharply from the 3.2 percent pace reported in January and the 4.1 percent logged in the third quarter, the Commerce Department said.

Brokers this morning focussed on the strong employment numbers from the CSO yesterday. Goodbody Stockbrokers said that debates are often had as to the most appropriate indicator of the trajectory of economic growth in Ireland. "GDP is often affected by multinational profit flows while even domestic demand growth is influenced by the volatile aircraft investment. Employment data doesn't have any of these drawbacks, and, in this regard, the latest employment data continues to point to positive trends and bodes well for continued progress in 2014, broker analysts said.

Paddy Power stocks rose 170c to E60.64. William Hill released its FY13 results this morning in which it reported revenue +16pc to 1487m, EBITA came in at 335m and adjusted EPS was 28.3p, +5pc yoy (Goodbody 1506m, 334m and 26.9p respectively). Online EBITA came in at 148m (Goodbody: 149m). By vertical, sportsbook was +29pc, ex closures casino was +1pc, bingo -2pc and poker -9pc. Management guides that it expects to reduce online costs by 15-20m in FY15, which equates to a c.25pc-29pc mitigation of POCT, according to Goodbody's.

FBD is due to report FY results on Monday, March 3rd. Having already flagged an increase in large and weather related claims in early January, which will see operating EPS down 20pc yoy to 138c, we expect the focus to shift to NAV and dividend progression. "We are forecasting NAV per share to increase by 13pc yoy to 815c and expect a further 13pc increase in the dividend, having already increased the interim by 29pc, as it progresses towards a targeted 40-50pc pay-out ratio," said Goodbody Stockbrokers. FBD shares climbed 22c to E18.82.