MARKET REPORT /Settlement Day: January 31st: Heavy selling of Elan was the main feature of the market in Irish shares with the pharmaceutical stock coming under pressure for a variety of reasons. By midday on the New York Stock Exchange, Elan shares had fallen almost 10 per cent to just over $33 as hedge funds aggressively sold the stock.
Elan did recover some ground in early afternoon trading in New York after the group said that it was happy with consensus full-year earnings forecasts of around 56 cents a share. Elan also said that it knew of no reason for the recent fall in the share price.Turnover in the opening session was more than 11 million shares compared with a daily average of 2.2 million shares. Unless Elan is able to stop the current rot, the company is in danger of losing its number-one position in the Irish market. By the close yesterday, Elan's market value had fallen to €12.4 billion compared with AIB in number-two position and a market value of €11.7 billion.
Dealers said the attitude towards companies with complicated accounting had changed radically in the post-Enron situation and Elan was one of a number of stocks in this category to suffer yesterday. The continuing fall-out from the suspension of testing of the Alzheimer's treatment and rumours - subsequently proven to be false - that the company had postponed its results were other factors weighing on the stock. Elan said that its full-year results would now be announced on Monday, February 4th.
Ryanair was given a boost after Goldman Sachs raised its earnings forecasts and price targets for the airline to reflect the likely impact of last week's huge aircraft order. In Dublin, the shares were up 15 cents to €6.96. Smurfit was the most heavily traded stock with almost four million shares trading as a couple of American buyers drove the stock up 13 cents to €2.49.
AIB - which has denied that its Govett fund management business in the UK is up for sale - was four cents firmer on €13.25 while Bank of Ireland was unchanged on €10.92. CRH jumped 48 cents to €18.64 despite suggestions that American spending on highway construction may be scaled back. Kerry hit a new high with a 20-cent rise to €15.10.
