PUBLIC COMPANIES: While the Irish Stock Exchange has outperformed other markets over the past two years, some ISEQ-listed firms have seen their share prices plummet, writes Brendan McGrath.
By any standards, 2001 was an excellent year for the Irish stock market - not so much for any major gains that the market notched up but more because the Irish market managed to avoid the blood-letting that saw major international markets lose as much as a quarter of their value.
After a 14.1 per cent gain in 2000, the ISEQ Index fell by just 0.3 per cent last year, despite the cumulative effects of the weaker US economy, September 11th and the foot-and-mouth scare. That compares to a 12 per cent fall in the S&P 500, a 16 per cent fall in the FTSE 100, 20 per cent falls in both the Nasdaq and Eurobloc 300 and a near 24 per cent fall in the Nikkei in Tokyo.
Add in the fact that those same international markets also performed dismally in 2000, and the Irish market's outperformance over a turbulent two-year period is even more noteworthy.
Whether the Irish market will notch up a hat-trick of annual outperformance this year remains to be seen and will depend on how a small number of large capitalisation stocks perform.
But one factor seems clear - there is unlikely to be a flood of flotations in Dublin in 2002. Apart from Cantrell & Cochrane's likely initial public offering (IPO) in May/June and a small number of technology companies such as Raidtec and Eurologic, the IPO cupboard this year looks pretty bare.
Last year saw six companies leave the Irish market, the most notable being Eircom (taken over by Valentia) and Golden Vale (taken over by Kerry).
Less significant departures were Seafield (taken over by Orb Estates), James Crean (taken private by Ray McLoughlin), Ire-Tex (taken private in a management buy-out) and Tuskar, which was delisted. Expect further departures this year with a host of small-cap companies likely to be the subject of management buy-outs or buy- ins - or takeover approaches.
So who were the top performers last year? In pole position is food group Glanbia with a 141 per cent rise - albeit from a position that most in the market believe was grossly oversold.
Other top performers on the domestic market were financial services group IFG with a 76.3 per cent gain, Grafton with 48.4 per cent, Power Leisure with 45.4 per cent and Ryanair with 21.7 per cent.
It was hardly a great year on the Nasdaq for Irish companies, but clinical trials group Icon had a stunning year, with its price up 78.4 per cent.
The other side of the equation, however, showed some extraordinary falls in share prices, notably in the technology sector. Baltimore - once an exalted member of the elite FTSE 100 - saw its share price plummet almost 96 per cent, while travel software group Datalex fell almost 95 per cent. Other tech stocks to lose value dramatically included Parthus, Conduit and Alphyra. Even stocks seen as the blue-chips of the sector, such as Iona and Smartforce, were not immune to the sector's gloom.
Remarkably, three of the poorest-performing non-technology stocks were all connected to Sir Anthony O'Reilly, with Independent News & Media down almost 27 per cent, Waterford Wedgwood down 28 per cent and mining group Arcon down 75 per cent.
The biggest changes in the market's pecking order involved Anglo Irish Bank, which rose from 18th position to 11th; Grafton, which jumped from 30th to 20th, and First Active, which ascended from 32nd to 24th. Fyffes rose from 25th to 35th and Glanbia, helped by its 141 per cent share price rise, rose from 43rd to 28th.
Stocks on the slide included Baltimore, down from 8th to 41st; Parthus, which went from 12th to 30th, and Trintech, which fell from 23rd to 45th. Barlo dropped from 41st to 52nd, Horizon slid from 28th to 57th and Datalex plunged from 29th to 61st.
