Next year the Irish Stock Exchange faces changes every bit as radical as "Big Bang". From January 1st, 1999 all Irish equities will be traded and settled on the Irish Stock Exchange in euros only. For those used to reckoning up the value of their shares in Irish pounds this will be a big change. The question will no longer be whether Irish Permanent is set for an assault on £10.00 but what euro level it has in its sights.

Stockbroking firms will be able to translate into Irish pounds for clients who wish to do business in the more familiar local currency but transactions will be executed, recorded, matched, confirmed and transmitted to settlement in euros. The inter-market settlement process will also be conducted in the new single currency.

The same will happen in the stock markets of the other countries joining Economic and Monetary Union (EMU), providing consistency across the euro zone.

Information such as dealt prices, turnover and money raised, which has traditionally been published by the Stock Exchange in Irish pounds, will now be published in euros but, in common with other markets, historic data will be maintained in Irish pounds.

The brokers, however, are expected to translate much of the historic series into euros so clients will be able to assess the past performance of a company, a sector or the overall market on a like-for-like basis.

Quoted companies will not be required by the Stock Exchange to change the nominal value of their shares into round numbers of euros or to report in euros immediately. The "compulsion, no prohibition" rule will apply during the transition period but companies are likely to begin to switch over as suitable opportunities arise.

The Department of Finance is currently preparing an EMU bill for publication which should provide guidance on the changeover to the single currency. Issues such as the renomination of shares and rounding should be clarified and most companies will wait for this before deciding what course of action to take. The bill is expected to be published in mid-May.

On a wider scale, EMU may increase the pressures for equity market consolidation.

"A key issue in the approach to EMU and the transition to a single currency is whether there will still be a place for national bourses across Europe or whether a single electronic marketplace will emerge where all shares quoted in euros will be traded on screens across Europe with no reference to their national identity," Ulster Bank noted in a recently-published EMU guide. All share quotes in the EMU area will be in euros, so there will be no need for separate country listings. Instead, the incentive could be for a single, pan-European listing wherever the expertise, technical lead and liquidity are, the report says.

However, equity markets are generally believed to be better protected than bond markets in terms of retaining business locally because local knowledge and expertise is more important.

The smaller publicly-quoted Irish companies may be vulnerable, however, to a tendency by fund managers to diversify abroad in pursuit of greater liquidity as they will no longer have to take on currency risk when they invest in euro-quoted companies.

Although the larger Irish companies are likely to command the attention of fund managers in other EMU countries, secondline stocks may find it tougher to attract the attention of overseas investors.