Powerscreen sell-off on profit warning dominates trading

Trading on the Dublin market was moderate yesterday, with most activity centred around massive selling of Powerscreen shares after a profit warning and reports of irregularities at its subsidiary, Matbro.

Some dealers say the company's reputation has been seriously damaged in the eyes of the market. One was more hopeful, saying that, if it can be proved the irregularities are confined to Matbro, the price will bottom out sooner or later.

The most damaging element of the story is that the market has, at least in the short-term, lost considerable faith in the management of the company itself. The stock lost more than half its value, dropping 357p to the equivalent of 294p in a sterling-denominated deal from its previous close of 651p.

This may lead to Powerscreen becoming an attractive acquisition target. The stock is widely held, with 40 per cent in the hands of US investors.

Elsewhere, trading volumes were light despite the FTSE 100 index soaring to a near record high in London on the back of bid speculation.

Most dealers expect London to stay at high levels in the near future as buy programmes by major investment banks provide a boost. "We didn't see London feeding through to Dublin as much today, but the next few days are likely to see it having more impact," said one dealer.

The best performers were the leaders, with AIB jumping 16p from 732p to 748p in steady trading. Bank of Ireland went from £11.10 to £11.20, before closing at £11.11 1/2 in a late sterling-denominated deal. CRH put on 2 3/4p to 847 3/4p and Smurfit rose 1p to close at 200p. Norwich Union traded strongly as the market reacted to continuing speculation in Britain about a shake-up in the building society sector, closing up 12p at 512p.

Irish Life continued to attract attention with a strong move forward from 443p to 457p.

Among those failing to impress were Ardagh, which shed 3p to 120p and Arnotts, whose recent momentum seems to have slowed down as it slipped 10p to 625p. Independent Newspapers was down 5p to 460p.

Among the second-liners to gain on the day were Avonmore Water- ford with a rise of 2 1/4p to 305p, Grafton with a impressive 10p jump to £13.40 and Irish Permanent, which rose 5p to 845p.