ONLY the middle of May and already there are four new entrants coming on to the Irish stock market. By the standards of the stagnant new issues market of recent years, that is a much-needed improvement, and further arrivals seem likely given the anticipated flotation of Doyle Hotels and a clutch of smaller companies on the Developing Companies Market.
The flotations of ILP, ITG and Qualcerani were welcome news, but the flotation of Ryanair later this month is a huge boost for a market which has been starved of quality new issues.
Given the huge growth in new issues in London and New York, the Irish market was in serious danger of becoming a backwater, with the high-tech companies increasingly looking towards Nasdaq and smaller companies towards the AIM market in London.
If Ryanair does float at the upper end of the suggested range, it will be valued at more than £300 million, placing the company comfortably among the top 20 stocks that are seen as solid investment grade. At that sort of level, Ryanair would have a bigger market capitalisation than highly-regarded companies such as Anglo Irish Bank, Clondalkin and IAWS.
About a quarter of the £100 million that Ryanair intends to raise in the flotation is likely to come from Irish investors.
Elsewhere, it was pretty much a question of the Irish market following movements in New York and London - usually a day later. New York rose and fell by 100 points-plus with by now monotonous regularity, with no clear sign among US investors that they know the long-term interest rate situation. Still, the Dow hit new highs, allowing the Footsie and ISEQ to follow suit.
All the leaders surged ahead, and AIB and Bank of Ireland have now reached levels where the banks might begin thinking about splitting the shares. Shares have been split at substantially lower prices than Bank of Ireland's current 730p and AIB's 690p - not to mention the 678p at which CRH is currently trading.
CRH has been probably the most successful of the Irish plcs in attracting overseas investors on to its share register - about 40 per cent of the shares are held outside Ireland. A recent investment report from Merrill Lynch will probably help CRH increase that proportion, with the US investment bank giving a strong "accumulate" recommendation.
Merrill Lynch had previously stopped short of giving such a positive recommendation for CRH, but now believes that the share price - 678p at yesterday's close - could reach 755p within the next 12 months. The strength of the Irish economy and the continuation of the construction boom, growth in highway spending in the US and an upturn in British merchanting are factors behind its switch.
Grafton has been an acquisitive company in recent years, with most the buys being of a friendly nature. That approach may now change, given the decision by Grafton to snap up almost 25 per cent of British Dredging Company for £6.6 million. The British Dredging board was totally unaware of the Grafton move.
