Lots of domestic corporate news to stimulate the market this week but it was corporate news of another sort that gave the market its first dose of the wobblies since the roaring bull market took over from nervousness over the Far Eastern economies.
To say that the Intel profit warning caused a stir is something of an understatement, but the expected mass sell-off of shares failed to materialise. Intel may have fallen more than $10 to $75 but the rest of the market took the profit warning reasonably calmly and a large portion of the initial losses were recovered.
Even another high-tech profit warning - this time by Motorola - failed to dent sentiment and markets staged strong recoveries in trading yesterday, with a view in some quarters that the response to the Intel alert had been overdone. "People will have to get used to occasional lapses in the high-tech sector; it's not a question of non-stop earnings growth," commented one Irish fund manager.
On the domestic front, results from CRH and Kerry continued the trend of bumper figures among the bigger capitalisation stocks and both stayed trading in and around their recent all-time highs. The jump in the Kerry share price should ensure a solid take-up to the offer of two million shares to staff at 825p a share. Any staff member buying shares at that price is already sitting on a profit of more than £1 a share.
The other big corporate news was the confirmation by First National Building Society that it will demutualise and convert to a plc in the autumn. Given the current appetite for financial shares, First National should find a ready market for its share and, if quoted now, would have a market capitalisation of around £400 million. With around 220,000 on the share register, First National shares will not be short on liquidity with underweight institutional investors likely to be keen bidders for any loose stock.
Elsewhere, the deteriorating industrial dispute involving baggage handlers at Dublin Airport has so far had no impact on Ryanair, although analysts in the US now feel that the shares have gone as far as can be justified. American investors still show no sign of going sour on the stock, but many in the market believe it is fear of negative American investor reaction as much as anything else, that is driving Ryanair's aggressive approach in the dispute with SIPTU.
Confirmation that Independent is planning to buy out the other shareholders in Newspaper Publishing did little for the share price, with the stock dropping 45p on the day of the statement. The London Independent might hold great attraction and prestige for Dr Tony O'Reilly, but all institutional investors see is a chronic lossmaker which will have to dip in Independent's deep pockets over the next few years if it is to have any chance of making a profit, never mind an adequate return on the £80 million sterling Independent has invested in the newspaper.
Speculation over the future of Ardagh was fuelled by the decision of BTR to sell its 21.7 per cent stake to Owens Illinois and the decision to shake up the boardroom, which sees Mr Paul Coulson take over as chairman.
