With A flood of overseas cash driving the banks ahead and with Smurfit putting another sturdy performance, the Irish market drove ahead to another new high with no sign that the wall of money driving the market is coming to an end.
Some in the market may be doubtful about the valuation of the market at its latest level, but with cash rather than valuations driving share prices to unprecedented levels, further gains seem likely with an ISEQ level of 5500 seen as a reasonable target over the next few weeks. "It's a liquidity-driven market, pure and simple, and as long as the cash is there this market will move ahead," commented one broker.
The phenomenal rise in the US packaging sector - up 15 per cent in the past three sessions - came to a halt yesterday after inventory figures showed a lower-than-expected fall in stocks. This 1.7 per cent fall in stocks is seen as not enough for the industry to be able to make its planned $50 a ton May price rise hold. Still, Smurfit moved ahead strongly to 236p before a late seller brought the share back to a close of 230p, up 5p on the overnight level.
The flood of overseas cash drove the two big banks ahead and AIB closed at a new high of 992p, up 27p on the day, while Bank of Ireland hit £15.15 before closing up 30p on £15. Bank is still 63p off its recent high but at that £15.63 dealers believe too big a gap had developed between Bank and AIB shares. Irish Life moved ahead 15p to a new 715p high while Irish Permanent gained 20p to 760p.
The one big exception to yesterday's gains was CRH which fell 8p to £10.38 as Goldman Sachs talked down the UK building materials sector. Deutsche Kleinwort Benson is still a CRH fan, however, with DKB including CRH in its core buys in the European sector, along with Aggregate, Dyckerhoff, Holderbank, Italcementi and Lafarge.
Among the second-liners, Adare jumped 50p to £10 after it emerged that Fidelity has been a recent buyer, taking its stake in Adare to 7.35 per cent. Independent saw some heavy trading and closed up 10p on 435p while Avonmore Waterford was unchanged on 315p where it now looks reasonable good value against its UK peer group.
Grafton gained 90p to a new high of £19, Kerry was 15p higher on a new £10.30 high, Tullow gained 7p to 168p in anticipation of licence news from Bangladesh while Waterford Wedgwood was 3p higher on 120p.
