Dublin goes higher with room for further improvement

A surge in demand for bank and telecom stocks in London, which drove the Footsie ahead by almost 2.5 per cent, provided a solid platform for another strong day on the Irish market, with the ISEQ ending almost 1 per cent higher.

Even though Wall Street was struggling a bit to stay above the 9,000 mark breached on Wednesday, dealers said that Dublin's under-performance against London yesterday left room for further gains. The British banks were up more than 4 per cent on speculation that poor business confidence figures in Germany might trigger an early-1999 rate cut by the European Central Bank.

But the Irish banks failed to match the sort of gains notched up in London and AIB was just 10p higher on £10.25, while Bank of Ireland gained 14p to £13.19. The biggest gain in the financials was by Irish Life, which jumped 30p to 570p as a line of half a million shares, that had been overhanging the market for the past few days, was finally cleared. Threadneedle disclosed that it has bought 127,850 shares at 535p each, taking its stake to 2.55 per cent.

A 22p jump to 907p by Irish Life's prospective partner, Irish Permanent, led to some speculation that moves on the merger might be imminent. Sources said, however, that it was still likely to be mid-December before there were developments. With the merged Smurfit Stone beginning trading on Nasdaq, Smurfit shares in Dublin and London saw some demand after an early dip. The shares closed down 4p in Dublin on 125p, while Smurfit Stone was trading marginally lower on Nasdaq at just below $13 despite being given an outperform rating by Goldman Sachs.

Elsewhere, CRH was 11p higher on £10.26, Clondalkin was 20p higher on 495p, while Greencore gained 7p to 295p. IAWS - mooted by some analysts as a potential merger partner for Greencore - was 15p higher on 300p. Iona benefited from an outperform rating by Goldman Sachs and was £2.40 higher on £18.50. Most of the action in Iona, however, takes place on Nasdaq and there Iona was trading $1.94 higher above $28.50 with further gains seen as likely.

Esat's strong run on Nasdaq came to a halt with profit-takers moving in to take advantage of the $6 gains this week. The shares were marginally easier at $38.50. Elan saw some strong demand and was 56 cents higher on $66.88. Elsewhere, Kerry continued its steady rise and was 10p higher on 945p, while Kingspan finally made some ground and was 7p higher on 192p. The market, however, seems to be showing some impatience at the lack of news from Tullow on the Bangladesh licences and the shares were 6p lower on 79p.

Finally, a bit of history was made on the gilt market with the last ever bond auction from the National Treasury Management Agency. The authorities, however, were distinctly unimpressed with the bids and only issued £70 million of 2001 stock on a 3.63 per cent yield.