Iseq slow to advance after €10bn plan to bolster banks

DUBLIN REPORT: Iseq: 2,510.92 (+5.90) Settlement date: December 18th:DUBLIN TRADERS who arrived at their desks yesterday with a spring in their step after Sunday night's announcement that the Government would lead a €10 billion capital investment into the Irish bank sector were soon disappointed on what was ultimately, as one described it, "a disappointing day".

The Iseq index closed at 2,510.92, a modest gain of 5.9 or 0.24 per cent.

The four quoted banks opened strongly and were well-bid during the open but in light volumes.

Anglo Irish Bank shares were up almost 25 per cent in the morning but dropped off all day to close down 4.51 per cent at €0.36.

AIB finished down 1 cent at €1.97. Bank of Ireland shares jumped 12 per cent or 10 cent to €0.98, while Irish Life Permanent was up 9 per cent or 14 cent to €1.66.

Market players said the Government's announcement was too vague and didn't bring any finality to the issue.

In particular, they were disappointed that the Government didn't provide any certainty over what size of stake it would take in the recapitalised banks.

One trader welcomed confirmation that the Government intends to underwrite the recapitalisation and was surprised this hadn't been enough to sustain a bounce in their shares.

Elsewhere both Ryanair and Aer Lingus were off over 4 per cent on the day that the budget operator published its formal offer for the former State airline. Aer Lingus closed on €1.439 while Ryanair finished at €2.79.

There was a lot of interest in cider maker CC, on the back of positive UK sales data, although by the end of the session it shed 1 cent to €1.24.

With volumes down across the board, traders said many investors have thrown in the towel on a grim year.