THIS time it did not need Alan Greenspan to send American markets tumbling - Wall Street fell by around 2 1/2 per cent all by itself on Wednesday and Thursday without any after-dinner comments from the chairman of the Federal Reserve.
At this stage nothing is certain on world markets, but the one thing most observers agree on is that US interest rates are going up and the only question now is the timing.
Despite the Greenspan comments, most believe the Fed will hold fire on interest rates when the Open Markets Committee (FOMC) meets next Tuesday. Even the hawks on the FOMC might stop short of raising rates a week before Christmas.
The January meeting of the FOMC is likely, however, to give the markets the rate hike they are now expecting and which is now being gradually factored into share prices.
The view in some quarters is that the stock markets are due a correction in the new year, but should recover to close ahead of current levels. Goodbody has this week forecast a sharp new year correction but believes the ISEQ Index, should still close 1997 at 2,875, compared to the current levels around 2,650.
Company news was thin on the ground but Kingspan's £25.9 million sterling takeover of Ward Building Systems in Britain - probably the worst-kept corporate secret of the year - finally came to pass. A £20 million rights issue priced at a reasonable discount should be easily swallowed by the market.
Kingspan has been by far the best performing stock on the Irish market in the past year, and most institutions are underweight in what is still a very tightly-held stock. Liquidity in Kingspan should improve somewhat after the rights issue, with the Murtagh brothers not taking up their rights and letting their combined stake in Kingspan fall from 47 per cent to 40 per cent.
Another tightly-held stock was also the focus of attention when. Kerry, another 1996 high-flyer, became the focus of some concerted, selling after a 1997 earnings downgrade from the companys own broker, Davy. Kerry had reached lofty levels and was probably due a downgrade, but whether a 3 per cent earnings downgrade on the basis of a higher tax charge warranted such a reaction is a moot point.
The reaction in Tralee is understood to be less than ecstatic about the way the downgrade was, handled, and Kerry has made it plain that, while its tax charge will be higher this year, Davy's 20 per cent assumed rate may be "too conservative". At around 600p, Kerry is on a prospective 1997 price/earnings ratio of under 17 based on the revised Davy forecast. That does not seem excessive.
Meanwhile next door to Kerry, Golden Vale's new chief executive has Christmas and the first five weeks of the new year to think about what he is taking on. Figures published this week in the Farmers Journal show clearly the extent of the problems in Golden Vale's dairy operations in Northern Ireland.
The group has four operations - two make money and two lose money.
