It was a week for market records: Following on from the Dow Jones breaking through the 8,200 mark, the ISEQ continued its upward climb reflecting gains in the financials and main industrials. Frankfurt and Paris indices also rose to new levels.
The main international backdrop was further positive indicators in the US economy. Bond market interest rates went down and new figures showed a timely easing of inflationary pressures, although yesterday's employment figures sounded a late note of caution on Wall Street. There was one blip in the ISEQ, on Tuesday, when share prices went down 1.3 per cent, even hitting Allied Irish Banks which dipped 9p.
That was soon a distant memory when an all-time high price was registered after the bank announced record pre-tax profits for the half-year of £242.2 million, and bankers reported the highest ever return on equity. Earnings per share rose by over a fifth, to 22.3p.
The financials were buoyed by AIB's share price increase of almost 7 per cent, which provoked speculation that Bank of Ireland would also register a healthy balance sheet.
In a week which saw its take-over of Bristol & West Building Society finalised, the bank's share price also showed strong gains. Official turnover figures show that almost £400 million worth of AIB shares traded in the five market days from Friday to Thursday.
Even taking double-counting of buying and selling sides into the account, this means that almost 4 per cent of AIB shares changed hands in a five-day period.
Irish Permanent and Irish Life also rose in price, and their competitor, First National Building Society, is understood to be attracted by the flotation train. It could be publicly-quoted by next spring if members approve the conversion. The Hibernian Group saw an increase in its half-year profits to £18.4 million from £13 million, while its share price showed a slight increase. Positive half-year results were also announced by Golden Vale and its share price showed a corresponding rise. Along with AIB, Avonmore saw a record share price registered as it built on last week's gains in the wake of its merger with Waterford Foods.
Meanwhile, Barlo, at its a.g.m., predicted further growth in its radiators and plastics divisions.
The Irish and British-quoted oil company, Dana Petroleum, made a £61.3 million bid for Seafield Resources. The enlarged group is expected to be capitalised at almost £200 million. And in a foreign acquisition of an Irish company, the Nasdaq-quoted pharmaceutical company, Fuisz International, bought the chemical group, Clonmel Healthcare. On Wednesday the gilts market reported healthy trading, with yields on long and medium-dated stocks up. The pound again dipped below 90p sterling, renewing analysts fears of a sudden speculative run and scepticism about the EMU timetable. But the Minister for Finance, Mr McCreevy, renewed his commitment to making Ireland a first-wave EMU member.
