Irish shares had a good week with the banking sector making spectacular gains, driven by bullish London bank prices. However, prices fell back late yesterday in tandem with international markets.
The two big Irish banks have reached all-time highs during the week following the lead of HSBC in London, comfirming evidence that the Irish banks have been tracking the British banks for some time. This is partly because of the strength of the Irish economy. However, dealers also note that Bank of Ireland's acquisition of Bristol & West was also seen in a very positive light.
Dealers note that continued sterling strength is also making the Irish market attractive for many British investors.
Irish Life made the headlines this week when its consortium won the bid for Hungary's third largest bank, Kereskedlmi es Hitelbank (K&H). The Irish Life/Kredietbank consortium's bid for $90 million (£60 million) bid for a 56 per cent stake in the bank. The life company is also expecting to invest a further £60 million in the bank to boost its earnings potential.
Greencore was also involved in an acquisition. It acquired control of Kears Group, a British baking company with 10 per cent of the British bread market and over 1,000 employees.
A good deal of interest was also maintained in Smurfit. Jefferson Smurfit Corp, the 46.5 per cent associate of the Jefferson Smurfit Group, is looking for better results in the second half of this year, following reduced losses in the second quarter.
In addition, UBS its stockbroker has suggested that might merge with another US print and packaging company. "An advantage of such a deal might . . . might be the opportunity to get further synergies with another company, since further synergies between the group and JSC alone would be limited given the cooperation already existing between them," according to the brokers. Jefferson Smurfit declined to comment on the proposition. First Ireland Investment Company has proposed a capital reorganisation designed to reduce the discount of its share price to its net asset value.
Stocklisting also made an appearance. The pharmaceutical company, Warner Chilcott, in which Elan has a 30 per cent stake, has registered with the US Securities and Exchange Commission for a flotation worth between $48 million and $54 million on the Nasdaq stock exchange.
And Stentor, the Irish telecommunications company, has raised £6 million sterling (£6.6 million) in a placing of new shares and is to seek and Irish listing in September. It already has a listing on the Alternative Investment Market.
The mining sector also had an interesting week. Shareholders are to be summoned to an extraordinary general meeting of Arcon International Resources and Arcon Resources next month to vote on a proposal to establish separate oil and mineral exploration companies. The e.g.m. ordered by the High Court will be held on Tuesday, August 12th, in the Berkley Court Hotel.
Arcon has moved to refocus on its core mining business, announcing that it would spin-off its oil and gas interests and seek a separate stock market listing for them.
