Update on Nama gives further boost to bank stocks

DUBLIN REPORT: Iseq:3,070.47 (-17.46) Settlement date:January 12th

BANK STOCKS received a further boost yesterday as investors reacted favourably to an update on the progress of National Asset Management Agency (Nama).

The National Treasury Management Agency said EU approval of Nama is expected soon, while the purchase of some €80 billion in toxic loans is expected to occur between February and the third quarter.

“It looks like the Nama development is happening at a quicker pace than expected,” one trader observed. “That would justify a lot of the rally we have seen [in bank stocks] and sets them up well for a continued rally.”

Bank of Irelandadded more than 1 per cent – about two cents – to close at €1.71, while AIBmoved ahead by 2.5 per cent, or four cents, to €1.65.

Outside the financial sector, Ryanair'sinvestor update represented the key event on the market yesterday. The airline quashed any speculation about a third bid for rival Aer Lingus. It also confirmed that as the deal with Boeing regarding an aircraft order is off, it will increase its cash reserves significantly by March 2013 and will distribute surplus cash to shareholders from this date.

However, the stock came off initially on concerns over its growth outlook and, although it recovered, it closed down about 2 per cent, or seven cents, at €3.46.

Meanwhile, Aer Lingusshed more than 3 per cent, or two cents, to finish at 63 cents.

Elsewhere, cider manufacturer C&Cwas off almost 5 per cent, or 14 cents, at €2.80 in advance of a trading update due out next week. Brokers noted there was "one decent seller" around in the stock yesterday.

Volumes on the Dublin market yesterday were reasonable, but the Iseq index lost a little footing, closing down about 0.5 per cent, with the result that it underperformed its European peers.