Paddy Power owner Flutter Entertainment, Ryanair and cardboard box maker Smurfit Kappa are on track to led a narrow list of advancing Iseq 20 stocks this year amid Covid-19, with banks among the worst performers, leaving taxpayers' crisis-era investments in the sector well underwater.
Flutter is up 54 per cent so far in 2020, with only 2½ days of trading left, after the betting and gaming giant accelerated its advance on the fast-growing US market through two deals. It completed its merger with Canadian rival the Stars Group in May before moving this month to increase its stake in US-based FanDuel to 95 per cent from 57.8 per cent.
Flutter, led by chief executive Peter Jackson, also managed to raise €2.1 billion in two share placings to help fund the transactions.
While the International Air Transport Association (IATA) estimates that airlines globally will end up losing more than $118 billion (€96.5 billion) this year and $39 billion in 2021 as a result of the pandemic, Ryanair's shares managed to recover from a sell-off in spring to advance 12 per cent for the year.
Chief executive Michael O’Leary, who raised €400 million on the stock market in September to bolster Ryanair’s finances and prepare for potential opportunities from rivals’ misfortunes, told the Financial Times in an interview published over the weekend that up to 100 million of its competitors’ seats will be taken out over the next 18 months. “Somebody has to step up and take that capacity,” he said.
Smurfit Kappa has risen by 11.6 per cent this year as Covid-19 led to an acceleration of online commerce and a move by fast-moving consumer-goods companies towards sustainable packaging. The group raised €660 million from a share sale in November to up its investment in projects and take advantage of a strong stock price.
Kingspan’s shares are 7.5 per cent ahead for the year. That’s even after stomaching a 30 per cent sell-off since early November, as investors baulked at damaging revelations about the Irish insulation manufacturer at an inquiry into the Grenfell London tower block fire that killed 72 people in 2017.
Banking stocks counted among the worst performers in 2020 as lenders set aside billions of euro for an expected surge in bad-loan losses, and the pandemic led to a slump in new lending and fees and commissions from other customer activities.
AIB, in which the State has a 71 per cent stake, plunged 42 per cent, while Bank of Ireland, which is 14 per cent taxpayer-owned, lost 29 per cent. Meanwhile, 75 per cent State-owned Permanent TSB, which is not a member of the Iseq 20, dropped 28.5 per cent.
All told, almost €2.9 billion has been wiped off the Government’s investments in the three banks, pushing the value on its combined holdings down to €4.23 billion.
More than a decade after the State pumped €29 billion into the lenders, only €19 billion has been recovered through the collection of guarantee fees, interest and principal repayments on bailout bonds, and the sale of bank shares. The current value of the stakes leaves a €5.77 billion paper shortfall in the State’s aim of clawing back the nominal amount pumped into the system during the crisis.
Aryzta was the second-worst Iseq 20 performer this year, falling 38.4 per cent, as it became the subject of a boardroom tussle and failed takeover attempt.
Dalata Hotels Group, down 25 per cent, and Cairn Homes, off 24 per cent, complete the list of five biggest large-cap losers on the Irish market.
The wider Iseq overall index, which slumped as much as 40 per cent earlier in the year, is now 3.8 per cent ahead in 2020, as financial markets have been helped by central-bank and government stimulus programmes and hopes of a widespread roll-out of Covid-19 vaccines in the coming months.