A couple of months ago, the prospect of bringing a company to the stock market would have terrified most stockbrokers and investment bankers, with the troubles in the Far East putting a major question mark over sustainability of the bull markets in shares.

But now partly for domestic reasons (an equity-friendly Budget) and partly for international reasons (the recovery in London and New York) Donegal Creameries and BCO Technologies could hardly be coming to the market at a better time.

Donegal Creameries begins trading today and given the way the shares have been priced, it will be extraordinary if they do not trade up to a substantial premium. Any company's shares being floated at eight times last year's earnings per share are extraordinarily cheap and there should be no shortage of bidders for any stock that comes on the market.

There is little doubt that Donegal and brokers NCB have priced the flotation to ensure it succeeds, but some in the market believe the company and its advisers have been over-conservative in their determination to have a successful flotation.

Would there have been a substantial lower response if the shares had been floated on a multiple of 10? Probably not. Donegal may be a minnow when compared to food giants like Kerry and Avonmore Waterford, but does it really need to be floated at half the average multiple in the food sector? Again probably not.

One thing is certain, the 1,100 Donegal farmers who hold most of the shares should hold on and not sell their shares in the short-term, whatever the temptations to cash in ahead of Christmas. Indeed one hopes that most of the farmer-shareholders took up the option to maintain their shareholding through the clawback.

With a starting market capitalisation of £25 million, Donegal may be small, but it is a tidy, well-run operation with a solid profits record and a strong balance sheet. With a stock market listing, Donegal is also in a position of influence if the co-ops in the north-east and north-west do bite the bullet and move towards merger and rationalisation.

Already, there is renewed talk of Lakeland, NCF and Kiltoghert inching towards a merger. Add in Donegal with its listing, and farmers across the Border counties and the west could have the opportunity to put a real value on their co-op shareholdings.

Even if there is no merger, Donegal could be an attractive candidate for one of the bigger dairy groups. Golden Vale has 10 per cent of Donegal and buys two-thirds of Donegal's milk output and is the obvious candidate to make a bid at some stage.

That's another factor that makes the Donegal flotation seem extravagantly cheap!