Jefferson Smurfit Group shares have been tipped as having the greatest potential for appreciation of all the larger stocks by Davy, the brokers to the group. In its end-year review, Davy said that shares with strong exposures to the Irish economy such as Independent Newspapers and CRH should continue to fare well. But the broker forecast that the banking sector is unlikely to continue to outpace the rest of the market.

In the year to date, bank shares have appreciated by some 73 per cent and have outperformed the rest of the market by 25 per cent. While earnings growth for the banks is expected to remain positive, Davy forecasts that earnings growth for the sector will be below that of the market in 1998 and 1999. Within the financial sector, insurance stocks offer a cheaper and generally more focused exposure to the Irish economy, Davy said. On Smurfit, Davy said that fears about the group's exposure to weakness in Far East markets are overdone. The brokers suggested that the supply-demand balance in the industry is now more conducive to price increases than it has been for some time.