THIS WEEK IN THE MARKETS

THE markets may not have moved a lot, but it has been a week of extraordinary corporate activity in Dublin with company results and acquisitions fuelling interest. Profit taking may have brought the market back in the latter part, despite the strength in New York and London, but some brokers still see the ISEQ hitting 2,700 by the end of the year. If that is the case, it will be a notable achievement.

On the corporate side, the biggest story was the full year results from Bank of Ireland which came in slightly below forecasts. This resulted in some selling of Bank shares - mainly by overseas investors who felt that the boom in earnings from the Irish economy may have peaked. Bank's results from the retail division were distorted slightly, however, by a £7 million tip up of the pension fund and by higher loan loss provisions. On that basis, the fall in Bank's share price may have been overdone.

Still with the financials, AIB paid £38 million for a 20 per cent stake in the Polish bank WBK, a move that is undoubtedly a long term investment given the developing state of the Polish economy. AIB now has 36 per cent of WBK and has the option to take its stake up to 60 per cent by buying the 24 per cent stake of WBK held by the European Bank for Reconstruction and Development.

Kerry's move to change the coop rules and bring the co op stake in the plc down from 52 per cent to 39 per cent was warmly welcomed by a market that has been starved of Kerry stock.

Kerry is highly regarded but many institutional investors have found it difficult to build up what they feel is an adequate stake, given the illiquidity caused by having more than half the shares held by the parent co op.

Just over 21 million shares, worth around £130 million, will be transferred directly to the coop's 6,000 shareholders but few in the market expect a sudden deluge of Kerry shares to hit the market.

Certainly the men in Tralee do not expect any sudden mass selling of shares by the co op shareholders, and - unlike IAWS - have introduced no mechanism to stabilise the share price once the share conversion is completed.

After the conversion, the co op - which will replace its 51 per cent rule with a new with 20 per cent - will have 39 per cent with about 23 per cent held individually by the co op shareholders.

At current prices, the co op moving from 39 per cent to 20 per cent gives the plc huge acquisition muscle and Kerry could probably look at companies substantially bigger than the £250 million DCA without getting over concerned about its balance sheet.

For DCC it has also been a busy week, with the group continuing with its strategy of buying out the minority shareholdings in its subsidiaries. First, DCC bought out Scottish Provident's 12.3 per cent stake in Printech for £3.4 million and later bought out the outstanding 11 per cent of Fannin for almost £1.5 million.

When Scottish Provident rejected DCC's original offer for Printech four years ago, its stake was valued at £2.8 million, so the £3.4 million does not seem to be a wonderful return after four years given the way markets have gone in the meantime.