UK deal is best hope of Irish shares recovering from a Brexit battering
Canada Goose online On January 23 of this year Irish share prices, as measured by the Irish Stock canada goose coats Exchange’s Iseq Overall Index, hit a post crash high. Unfortunately, that was as good as it got. Since then the Iseq Overall has fallen by more than 18pc, with billions wiped off the value of companies. Most of this fall Canada Goose Parka in Irish share prices has occurred over the past three months with the Iseq Overall down by 12.5pc over the past three months. Canada Goose online
So why, with the fastest growing economy in Europe, have investors turned sour on shares in Irish companies?
buy canada goose jacket Part of the explanation lies in what is happening in global equity markets. In the US, the main market index the S 500 and the tech heavy Nasdaq index have both tumbled over the past three months. buy canada goose jacket
It has been a similar story on this side of the Atlantic with the main London index, the FTSE 100, and the Euro Stoxx 50 Index of the 50 leading eurozone shares also well down in recent months.
cheap Canada Goose So that’s all right then, the fall in Irish share prices is merely a reflection of what has been happening elsewhere. Not quite. cheap Canada Goose
cheap canada goose uk Despite a very mature global economic recovery, the prospect of eurozone interest rate increases from the ECB next year, Brexit in the UK and the ever present risk that the Trump canada goose black friday sale administration’s belligerent trade policies will trigger a global trade war, British, eurozone and American share prices have fallen by significantly less than those of their Irish counterparts. cheap canada goose uk
In the UK, the FTSE 100 has shed just over 8pc of its value over the past three months while the Euro Stoxx 50 index is down by just under 9pc over the same period. Across the Atlantic the S 500 is down 6.8pc since August while even the battered Nasdaq is down by ‘only’ 10.8pc.
Canada Goose Coats On Sale So clearly, with Irish share prices down by 12.5pc, not all of the blame for the price falls can be laid at the door of falling international markets. Clearly at least some canada goose clearance of the fault lies with uniquely Irish factors. Canada Goose Coats On Sale
canada goose factory sale When one looks more closely at what is happening in the Irish market an even more interesting picture emerges. The Irish Stock Exchange’s Iseq canadian goose jacket General index, which excludes financial shares, has fallen by just over 11pc over the past three canada goose store months. While this is somewhat more than the fall in either buy canada goose jacket the FTSE 100 or the Euro Stoxx 50, it is not hugely out of line with what has happened in other markets. canada goose factory sale
Canada Goose sale In a small market such as the Irish Stock Exchange, the movement of the index can be skewed, up or down, by a handful of large stocks. This is what seems to have happened over the past three months with CRH, the Canada Goose sale most valuable company on the Dublin market, having lost 17pc of its value over the past three months. Canada Goose sale
Another major Irish quoted company whose shares have fallen by more than the index average is Smurfit Kappa, whose board rejected a 37.54 a share bid from International Paper last June on the grounds that it was “significantly below the board’s assessment of the group’s true intrinsic worth and prospects and remains significantly below the valuations set by recent industry transactions”.
That may very well be the Canada Goose Jackets case, but Smurfit Kappa shares were trading at just 24.08 last week, 36pc down on the price International Paper was proposing to pay.
uk canada goose Shares in Ryanair, perhaps the large Irish quoted company most exposed to Brexit, with almost a quarter of its sales coming from the UK, have fallen by almost 12pc over the past three months and by a massive 29pc since January. uk canada goose
Canada Goose Parka By comparison, both of the major quoted food companies, Glanbia cheap Canada Goose and Kerry, have comfortably outperformed the index, with Glanbia up by 12pc and Kerry by 5pc since August. Canada Goose Parka
It helps that both of these companies have diversified away from their Irish roots with almost three quarters of Glanbia’s sales coming from the United States while 55pc of Kerry’s sales are generated in the Americas and Asia Pacific.
uk canada goose outlet It’s a very different story with financial shares. The Iseq Financial index is down by 30pc from its January 26th peak and by 20pc over the past three months. Both of the main banks, the main components in Iseq Financial, have taken a hammering this year. The AIB share price peaked at 5.80 on January 29. By last week it was trading at just 3.75, a fall of 35pc. Most of this fall has occurred in the past three months, with the AIB share price down by 22pc since August. uk canada goose outlet
It’s a similar story at Bank Canada Goose Outlet of Ireland with the share price down 30pc from its January 26 peak of 8.15 to just 5.73 last week.
Once again, most of the fall in the Bank of Ireland canada goose outlet share price has taken place over the past three months, with the shares down 21pc over this period.
Likewise the other Irish owned bank, Permanent TSB, whose share canada goose coats on sale price has fallen by 15pc over the past three months.
So why have investors soured on the Irish banks? All three of them recently issued relatively positive trading statements, with both AIB and Bank of Ireland revealing that their net lending is likely to be up this year, the first increase in net lending at either institution since the 2008 crash.
canada goose uk outlet While matters weren’t helped by the decision of AIB’s chief executive Bernard Byrne and its chief financial officer Mark Bourke to announce their resignations within eight weeks of each other, investors main fear about the banks has been the possible impact of a hard Brexit on the Irish economy. canada goose uk outlet
Already there are also clear indications that this year’s lending growth will not be as strong as had previously been expected, while the most recent KBC Bank/ESRI consumer confidence index showed that consumer confidence had fallen to its lowest level for almost four years in October.
buy canada goose jacket cheap “Lending growth has slowed compared to expectations earlier in the year. The mortgage growth figures are not coming through as strongly as had been thought. Some of the banks are running up against the Central Bank’s income and loan limits,” says Irish Life Investment Managers economist Lenny McLoughlin. buy canada goose jacket cheap
The Irish banks have also found it extremely difficult to capture the benefits of extremely strong economic growth with canadagooseoutletcanada.ca the ESRI forecasting GDP growth of 8.9pc this year.
Even when the effect of so called ‘Leprechaun economics’ are filtered out, the ESRI is still pencilling a 2.9pc increase in private consumer expenditure and a 4pc increase in net current public expenditure for 2018.
canada goose Someone seems to have forgotten to tell the banks. “The Irish economy is booming, but the canada goose transmission of economic growth into revenue growth by the banks has been lacklustre,” says Jonathan Fearon, European equities manager with Aberdeen Standard Investments. It doesn’t help that, a decade on from the crash, all three quoted banks are still working their way through legacy non performing loans. canada goose
The good news here buy canada goose jacket cheap is that this process may finally be drawing to a close with AIB holding out the prospect that its NPL ratio will fall to a “normalised” 5pc by the end canada goose deals of 2019.
canada goose coats on sale It may come as little consolation to their shareholders, but the Irish banks are not alone. The Euro Stoxx index of eurozone bank shares, whose components include both AIB and Bank of Ireland, is down by almost a third from its late January high and by 11pc over the past three months. Not alone are many eurozone banks still labouring under the burden of legacy non performing loans, more than a decade of very low interest rates has wreaked havoc with their profitability. canada goose coats on sale
canada goose uk black friday In the aftermath of previous financial crises, banks were able to take in deposits from their depositors at very low interest rates and then lend them risk free to their governments at much higher rates by buying bonds canada goose uk black friday.