HEAVY demand and a distinct shortage of stock on offer sent the Irish stock market into record territory yesterday. The ISEQ Overall Index closed over 16 points higher on 2348.05. Strong overseas equity markets also supported the Irish market. Dealers believe further gains are possible unless the major overseas markets falter.

There was widespread demand for most leading stocks, but the better quality second liners were also bid up strongly. There were no offers of any size, however, to meet the heavy demand that is likely to increase once the proceeds of the Lyons, Flogas and Inishtech takeovers are released.

The buy outs of those minority share holdings are not going to release any avalanche of fresh funds, but it will add to the already strong technical position on the Irish market where too much money is chasing too few investment opportunities.

There is no sign of any imminent share issues and the likely delay in the flotation of Allegro after its failed bid for Lyons strengthens the market's technical position. Almost all of the leaders gained ground yesterday. Stocks to reach new highs included CRH and Independent, both of whom report full year results over the next couple of weeks.

The imminent buy outs of the minority share holdings in Lyons, Flogas and Inishtech have also focused more investor attention on the second liners. The main reason why most of these stocks have not pushed ahead is their lack of liquidity. Quite simply, there are too few shares that are not held by long term investors.