Market Report - Dublin

Goldman Sachs equities guru Ms Abby Cohen's faith in the stock markets was severely tested in recent weeks as the markets went through their periodic hiatus. But the woman known on Wall Street as the most bullish of the bulls still believes that equities will grow next year although at a much slower rate.

Ms Cohen told Goldman's annual assessment of global prospects that she was no longer as "exuberantly bullish" as she had been in the past, and the view from Goldman was that bonds would outperform equities in the year ahead.

Double-digit equity returns were no longer sustainable and Goldman expected global equity returns of no more than 5 per cent next year, compared to 67 per cent for bonds.

The view in Dublin, however, is that the Irish stock market will grow by a lot more than that next year, with Goodbody leading the bulls with a 15 per cent growth forecast for the ISEQ.

That target is ambitious and it is noteworthy that one of the market heavyweights, Greencore, indicated this week that it expected cumulative earnings growth over the next five years of just 8.5 per cent per annum.

Other Irish food companies, notably Kerry and IAWS, have set themselves far more aggressive growth targets and what was seen as a conservative and cautious earnings target by Greencore put some pressure on the share price, which ended the week down 20p on 280p.

Revised 1999 earnings forecast that Greencore might struggle to hold this level and a move back towards 260p is likely.

Otherwise, it was a week of slow drift on Anglesea Street, with the Irish market failing to regain much ground as Wall Street rebounded after some heavy falls. Dealers believe the market is likely to trade thinly and in a narrow range between now and the end of the year.

The profit-takers seem to have finished their business on Wall Street so this factor is likely to be of diminishing importance in the next three weeks.

Yesterday was a bit of a nothing day on the Dublin market, with little change in prices.

Smurfit was the worst performer of the large capitalisation stocks, falling 5p for the second successive day to 123p.

AIB was 7p higher on £10.37, Bank of Ireland was unchanged on £13.40 while CRH eased 5p to £10.30.