Investors buoyed by Irish bond sale
German employment data and Republic’s sovereign sale boost values across region
Aer Lingus: climbed 1.89 per cent to €1.35. Photograph: Matt Kavanagh
The success of Ireland’s first post-bailout bond sale and solid jobs news from Germany boosted stocks across the region yesterday.
This country’s heavily oversubscribed placing cheered investors. In Germany, a report showed that the number of people out of work fell by 15,000 last month, the biggest drop since December 2011.
UK stocks gained the most in more than a week while US stocks also halted a three-day slide. US stocks rallied ahead of Friday’s employment report and the start of fourth- quarter earnings season.
Benchmark indices rose in 16 of the 18 western European markets. The Iseq streaked ahead by over 1.7 per cent, Germany’s DAX and France’s CAC 40 both gained 0.8 per cent, while Britain’s FTSE 100 added 0.4 per cent.
On the back of renewed international confidence in Ireland and the banking sector, Bank of Ireland, the country’s largest lender, jumped 8.9 per cent to €0.28 while the sliver of AIB that is still listed climbed 4.3 per cent to €0.12. The banks also announced yesterday they had signed up to a new protocol to deal with SME debt.
Aer Lingus climbed 1.89 per cent to close the day at €1.35. The airline announced a 12 per cent boost to its long-haul passenger numbers last year, although short-haul passenger numbers slipped nearly 2 per cent; 10.7 million passenger flew with the airline in 2013.
Exploration firm Petroceltic shrugged off concerns about its increasing level of net debt in an operational update, rising 5.16 per cent to €2.04. Investors were encouraged by three new licences in Egypt, which the company has just had ratified. Its industry peer Providence Resources, which has been in farm-in talks over its Barryroe field off the south coast, spiked 14.75 per cent to close at €3.50.
The water utility Severn Trent dropped 2.2 per cent to £16.67 after JP Morgan downgraded the shares to underweight. The brokerage cited the increased risk of tighter regulation and said the firm will probably not receive a takeover offer this year because the UK regulator will review prices in December.
Pace added 3.9 per cent to £3.37 as the supplier of digital receivers said it has completed its acquisition of Aurora Networks after receiving a loan of $310 million. Jefferies said in October that the purchase may increase Pace’s earnings by 11 per cent this year.
Dunelm Group, the retailer of budget home-furnishings, slid 3.7 per cent to £9.42 after it said comparable sales fell 0.9 per cent in the first half of its financial year.
Peripheral banks were the big winners. In Italy, Banco Espirito Santo advanced 5.7 per cent to €1.20, its highest price since September 2011. Banco BPI gained 4.4 per cent to €1.39, a three-year high. In Madrid, Banco Popular Espanol climbed 6.6 per cent to €4.96. CaixaBank jumped 7.2 per cent to €4.15.
Hugo Boss fell 2.3 per cent to €100. Société Générale cut the fashion retailer’s rating to hold from buy, saying expansion in the Asia-Pacific region might take time to materialize.
The shipping giant Maersk increased 3.5 per cent to 62,300 kroner. The owner of the world’s largest container-shipping line said it will sell a 48.68 per cent stake in Dansk Supermarked and 18.72 per cent of F Salling, booking a gain of 14 billion kroner.
Mattel, the maker of Barbie dolls, retreated 1.5 per cent to $45.93 as Goldman Sachs said the toymaker may miss analysts’ projections for fourth-quarter sales and profit.
Intel rose 1 per cent to $25.71 a day after the company showed off wearable computing devices on Monday, including a smart headset and ear buds that monitor the wearer’s heart rate.