Any fears that the current bull run on the Irish stock market might be coming to an end were well and truly dispelled by yesterday's remarkable non-farm payroll figures in the US. These figures showed that the American economy is continuing to grow steadily, with no sign of the peaks that would characterise an overheating economy needing an interest rate rise as a coolant.
While the surge in gilt prices and gilt futures inevitably boosted financial shares, the most impressive performance of the week came from Kerry which rose from 760p to 820p at yesterday's close, with huge demand for the tightly-held shares.
A variety of factors is driving Kerry, apart from the comparative illiquidity of the shares. There is a huge weight of money on the Irish market looking for a secure investment home and an equally huge shortage of sellers to meet the demand. Investors know well that if they sell any of the quality stocks at current levels, they will not be able to buy back in later.
In Kerry's case other factors come into play, particularly the likelihood that an acquisition of Dalgety's Lucas food ingredients business is unlikely to be accompanied by a share issue of any great size. The food sector will remain the focus of close scrutiny in the weeks ahead, with the Avonmore/ Waterford rationalisation programme and possible large acquisitions by Greencore and IAWS fuelling interest in the sector. IAWS has been touted for some weeks as a buyer for Cuisine de France, and an announcement of a £50 million takeover by IAWS is expected early next week.
A share issue by IAWS is seen as unlikely. Even £50 million for Cuisine de France would boost gearing to only just under 90 per cent. Given the strength of IAWS's free cash flow that gearing could be reduced quickly.
Outside the food sector, the next bout of corporate activity may come at Ulster Television where a mystery non-British investor snapped up a 2.7 per cent stake at 250p sterling a share. This investor - speaking through Merrill Lynch - said that it did not plan a bid for UTV "subject to there being no material change in circumstances", market jargon for a takeover bid.
The arrival of this new investor is not good news for Scottish Media, which built up its 18 per cent stake at 210p sterling and probably would have intended bidding at some stage for UTV at a relatively modest premium to that price. Now it is difficult to see any bidder successfully bidding for UTV at anything south of 300p.
Crean's corporate strategy (or absence of) has come under some strong criticism, and it is difficult to see the sale of the Douthwaite florists business for £6.8 million sterling doing much to restore Crean's standing in the market. Inishtech - since absorbed into Crean - bought Douthwaite for £7.1 million five years ago. Not much of a return there.
Elsewhere, Glencar got a boost with confirmation that its Ghanaian gold find is commercial. The main question now is whether Glencar retains its stake in this gold prospect or sells out as it did with its previous find in Ghana.
