Financials show the way while traders look at clouds abroad

BANK of Ireland led the upward charge on the Dublin market yesterday but it remains to be seen how much further the market will go, given the late selling in London after Wall Street turned an early 42-point gain for the Dow to a 50-point loss towards the close of European trading. The New York market finally turned firmer after European markets had closed.

Financial shares were generally firmer and Bank of Ireland dealt as high as 515p before closing up 9p on the day on 513p. Other financials also closed up on the day, with AIB 3p higher on 392p and Irish Life up 3p on 265p. Irish Permanent, however, drilled off 2p to 476p while Anglo Irish edged up fractionally to 7314p even though full-year results were ahead of expectations.

There was little activity among the major industrials with CRH and Smurfit unchanged on 610p and 163p respectively. Adare continued to benefit from its good half-year figures and closed up 3p on 565p while Greencore was 2p firmer on 358p. Heiton did not trade from its overnight 91p - M&G has disclosed that it sold 500,000 Heiton shares last week to take its stake down to 8.17 per cent.

Rights issues have been something of a rarity in the past year so the United Drug fund-raising came as a pleasant surprise. Quite why a rights issue should be priced at a 17 per cent discount to the dividend-adjusted price in the market is not immediately obvious as the view in the market is that the issue will be well-supported, leaving underwriters Davy with substantial fees for not very much risk.

United Drug shares did not trade yesterday, but with a bid-offer spread in the market of 354p-360p, the shares are likely to trade well above the notional ex-rights price of 345 1/2p.