Eyebrows were raised in some circles last week after the share price of Ires Reit, Ireland's biggest landlord, rose in the aftermath of the Government's hiking of stamp duty for investment funds.
"If the measures were going to have any serious impact on their profits and investment strategy of buying up Irish homes and renting them out, then the share price would have fallen", said social policy lecturer Dr Rory Hearne in TheJournal.ie.
The same point was stressed by opposition politicians, although it’s not that simple.
Yes, the shares climbed 2.6 per cent, but they had already fallen 15 per cent over the prior week. Markets routinely price in events in advance, which is why stocks often rise on “bad” news and fall on “good” news.
That's not to say investors weren't relieved that the Government didn't go further; they were, said Goodbody analyst Dermot O'Leary.
Nevertheless, investors should resist the idea that stocks rise on good news and fall on bad news; news usually gets priced in well before it is announced.
