The week saw yet another new high for the ISEQ which climbed to a new intra-day high on 5,348.46 on Thursday, although it did ease back slightly in quiet trading yesterday. The bull run was further fuelled by Footsie's performance, after it broke through its 6,000 barrier for the first time on Wednesday, maintaining its ground above that benchmark yesterday.
But there were further rumblings of inflationary pressures at home while the pound fell to a 13year low against sterling, putting pressure on importers.
In Dublin, interest is increasingly centering on the value being offered by second-liners, with some wilting apparent towards the end of the week in the run financials have had in recent months. But the two main banks remained impervious to the loss in the popularity stakes triggered by the National Irish Bank scandal. AIB rebounded during the week after profit-taking, making a healthy 42p gain on Wednesday to close at 945p, and only closing slightly off that by close of business yesterday.
Bank of Ireland did not fare so well, however, closing at £14.35 yesterday, well down on its £15.63 high. The release of Exchequer figures with better-than-expected revenues and bank lending numbers showing a 25.9 per cent in borrowing on last year had no discernible effect on the market although they pointed to inflationary pressures.
The Central Bank signalled its discomfort at the situation by warning that interest rate cuts would be delayed for as long as possible. Preliminary results announced this week were largely positive, in line with the buoyant economy. Irish Distillers Group was happy with the growth in its Jameson whiskey label, which largely accounted for a 20 per cent increase in the group's profits to £58.9 million.
IFG also saw strong profit growth, announcing a 48 per cent increase to £2.3 million. Smurfit, as expected, saw its profits, at £150 million, damaged by weak paper and packaging prices, but the group has indicated that it believes it has reached the trough in the downturn.
Avonmore Waterford's first post-merger profits of £60 million were also eaten into. A once-off exceptional charge due to restructuring and rationalisation resulted in a net loss of £108.9 million. The group followed on the recent disposal of its British fruit juice business with the sale of its dairy interests in Wisconsin, USA, for £26.2 million Independent Newspapers pushed pre-tax profits to a record £100 million in 1997, boosted by the sale of some of its foreign interests. Irish Life enjoyed fresh interest and a new high of 700p as its senior management underwent restructuring.
Powerscreen confirmed it was in talks on the possible sale of its troubled subsidiary, Matbro, to the US engineering company, John Deere. Powerscreen's auditors are expected to have completed their investigation of Matbro by the end of next week. Meanwhile, Canada Life's plans to demutualise will possibly add another financial stock to the Dublin Stock Exchange if that company decides to list there.
