Confidence in Irish financial stocks drove the ISEQ index higher yesterday, with investors ignoring the sluggish performance of London's FTSE. Corporate news helped fuel interest in shares, attracting the attention of institutional investors and bringing suggestions of consolidations in the banking sector. "It's been quite an amazing day," one dealer said. "We saw a very impressive performance from Bank of Ireland and Irish Life - I would say a lot better than expected.
"What it shows is the sheer amount of cash that's out there. The institutional investors in particular are looking for somewhere to put it," the dealer added.
Others suggested that some market players now had expectations of further consolidations in the banking sector, a trend which would attract more foreign investors to Dublin.
Early in the day, Bank of Ireland confirmed that it was in talks to buy the entire issued share capital of New Ireland Holdings, and that it had raised almost £200 million in a placing.
The bank's share price dropped almost 24p on the news, but rallied in the afternoon, trimming its losses to close at 890p, down just 1p on the day, a very strong performance given the dilutionary impact of the share placing.
There has also been an enthusiastic response from the market to this week's announcement by Irish Life that Mr David Went was to become its new managing director.
"To an extent, Irish Life was undervalued and is playing catch-up," one analyst said. "Mr Went is very well regarded by the market, and there is talk that he may be looking at management restructuring and so on."
The assurance company gained 35p, closing at 400p.
Allied Irish Banks fell 4p to close at 608p, while Irish Permanent was unchanged at 687p. Hibernian ended up 5p at 470p, and Anglo Irish Bank was static at 111p.
Of the major industrial stocks, CRH was up 15p, ending at 835p while Smurfit gained 3p, closing at 230p.
In the food sector, Greencore dropped 2p to 320p, Fyffes gained 2p to 100p and Golden Vale edged up 1p to 79p. Avonmore/Water- ford finished as it began, at 260p, as did Kerry, on 840p.
