After doubling in price over the past few months and being tipped by Goldman Sachs to rise another 20 per cent, Elan now accounts for nearly 25 per cent of the Irish market and is more than twice the market capitalisation of the next biggest stock, AIB. That means Elan's price movements are having a disproportionate impact on the Irish market, which can now rise and fall dramatically as a result of even modest changes in the Elan share.
The big rise in the index was all down to a €3.88 jump in Elan shares on the back of the overnight gains in New York following the announcement of the MS joint venture with Biogem. Elan, however, was hit by some mild profit-taking in New York trading yesterday and by midday was down $2 1/4 on $57 5/8. If one believes Goldman Sachs, however, Elan is still a strong bet with the bankers setting a $70 target for the shares.
CRH was another to impress and continued its strong recent run with a 35 cent rise to €18.60. The main financial stocks, however, remained weak with AIB down 15 cents on €9.48 while Bank of Ireland lost 5 cents to €6.73. Eircom managed to recover a little and was 2 cents firmer in turnover of just over a million shares to close at €2.59.
Otherwise, low volume trading produced mixed results. DCC was 15 cents firmer on €10.40, Fyffes finally fell below the euro barrier and closed down a cent on 99 cents. Prospects of an MBO failed to support Green and the shares were down 10 cents on €6.72 although Golden Vale moved 5 cents firmer on €1.10 as investors waited for news on what the plc planned to do with its dairy processing business.
