Irish shares charged ahead again yesterday, led by the banks which benefited from more post-Budget buying interest and the merger between Union Bank of Switzerland and Swiss Bank Corp. Dealers reported good private client interest in the market, following the Minister for Finance's decision to cut capital gains tax to 20 per cent from 40 per cent.
"It's a golden scenario at the moment. There's a significant amount of cash out there but no one seems to want to sell anything, so people wanting to buy have to pay up," one trader said.
The ISEQ index of shares gained 1.36 per cent or 54.96 points to close at another record high of 4,063.70 with the financial index again outperforming industrial stocks. It gained 2.9 per cent against 0.35 per cent for the general index.
Bank of Ireland surged by 45p to a fresh high of 1050p and has now gained 95 per cent in the year to date. AIB firmed 20p to 695p while Irish Permanent added 15p to 735p and Anglo Irish Bank was up 7p to 132p.
"Everyone seems to want to buy the banks," one trader noted.
Dealers said the industrials were in less demand as they appeared to be more fully valued. There were some sellers in CRH which slipped 15p to 840p after hitting all-time high of 865p on Monday, but Smurfit managed to edge up 4p to 203p.
Second-line stocks with exposure to the booming Irish economy were beginning to follow the financials upward, dealers said. "Valuations are starting to move. The Budget benefits are beginning to percolate through to all the stocks that are Irish economy plays," one equity dealer said.
Dealers said it was next to impossible to get hold of stock in Arnotts while companies like Grafton, Heiton, Green and Readymix were all set to benefit from the Budget which lowered corporation tax and provided a boost to the economy with a tax giveaway of over £500 million. Green gained 10p to 410p, Heiton was up 4p at 194p, recruitment company Marlborough International added 15p to 160p while Avonmore also firmed 15p to 260p. Abbey, in which AIB and its subsidiaries now have an 11.15 per cent interest, was unchanged at 260p.
Tullow Oil, which was active in London on hopes it would be granted rights to develop offshore blocks in Bangladesh, firmed 2p to 157p in Dublin.
