Huge trading in bank shares continued to be the dominant feature of the Dublin market yesterday, with AIB losing all of Tuesday's gains while Bank of Ireland had one of its biggest one-day gains ever in a catching-up exercise on AIB.
There was also solid trading in CRH and Smurfit but, with trading volumes increasingly being concentrated on a small number of large capitalisation stocks, Dublin is more and more becoming a two-tier market with fund managers showing little or no interest in any stocks outside the top dozen or so.
Bank of Ireland has missed out on much of the demand for AIB and is trading on a hefty price/earnings and price/book discount to AIB. Some of that discount was wiped out yesterday as Bank of Ireland gained 65 cents to a new high of €20.75 (£16.34).
Irish Life, which has suffered from the activities of a heavy seller in recent weeks, finally bounced back with a 45 cent rise to €8.80 (£6.93) while merger partner Irish Permanent was 20 cents higher on €14.50 (£11.42).
Among the industrials, CRH is the flavour of the sector, and with strong demand in both Dublin and London, the shares closed up €1.20 on a new high of €16 (£12.60) and were up 911/2p on £11.09 (€16.02) in London. Smurfit benefited from a buy recommendation from Bear Stearns and was up 11 cents on €1.55 (£1.22) despite a negative comment on the outlook for the group from Standard & Poor's. Fyffes was unchanged on €2.35 (£1.85), the price at which it bought back another 200,000 shares.
