DUBLIN REPORT: Iseq: 2,951.05 (+ 2.12) Settlement date: August 19thALLIED IRISH Banks (AIB) was described by brokers as "the biggest game in town" yesterday.
A report in The Irish Timesyesterday morning that a major Canadian bank had made a conditional approach to AIB "set the ball rolling" as soon as the Dublin market opened, according to one broker. Retail investors began buying into the stock and some hedge funds also entered the fray, sending the bank sharply higher.
After spiking to €2.40 during the morning session, it drifted back slightly. However, a statement issued by AIB in the afternoon confirming that it had received “interest from a third party” saw the stock shoot upwards again. Although it flagged a little into the close, the stock closed up over 6 per cent – 13 cent – on the day at €2.23.
All the financials rode on the coat tails of this development, with Bank of Ireland up more than 3.5 per cent – over 7 cent – at just under €2.14. Irish Life & Permanent gained 5.5 per cent, closing at just under €3.95.
Although activity in the banking sector was the dominant feature of the day, Smurfit Kappa also put in a very strong performance. The packaging giant closed at €5.17, gaining 34 cent on the back of price increases coming through in its industry.
Elsewhere in the market, there was little stock-specific news to provide direction, and activity was somewhat muted. Industrial holdings group DCC rose a little over 9 cent to finish at €15.38.
Overall, the Dublin market was “in pretty good shape” yesterday, one broker noted, until disappointing consumer confidence data released in the US saw it reverse fairly sharply. However, the Iseq index had recovered by the end of the session to close more or less flat at 2,951.05, a relatively good performance on a day when European shares in general retreated about 1.5 per cent.
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