Ireland's stock market is expected to remain around record levels this year after breaking through the 8,000 point barrier last week for the first time ever.
The average of five forecasts from economists surveyed by Reuters in a monthly poll of key data is for the main ISEQ index to end 2006 at 8,540 points - up 16 percent year on year and more than 200 points above last month's predictions.
So far this year the ISEQ, weighted towards stocks that are geared to the strongly performing Irish economy such as banks, builders and insurers, has outperformed most major global indexes with an 8 percent gain.
That compares to a 6 percent increase in the FTSE 100 Index and a 7 percent rise in the FTSEurofirst 300, and is double the rise in the S&P 500 over the same period.
Increased speculation over corporate activity, reflecting an uptick in merger and acquisition activity internationally, has helped to spur recent growth in the Irish market but domestic factors will also support equities going forward, with anticipated earnings growth likely to drive share price gains.
"I think value over the next year from here will be driven by further earnings growth," said Stuart Draper, head of research at Dublin-based Dolmen Stockbrokers.
One major domestic boost for equities will be the release of SSIA funds, of an estimated €15 billion, which are expected to drive spending in areas such as home improvements, leisure and advertising.
"Ultimately speaking, the SSIA could be a very significant impact on earnings estimates for the year 2007," said Kevin McConnell, head of equity research at Bloxham Stockbrokers.
McConnell said he did not believe the boost from SSIA money had been fully factored into earnings estimates, meaning the market still held value for investors despite its recent rise.
Irish equities are trading on a forward one-year price-to-earnings ratio of about 12, compared to 15 in Britain and 16 in the United States.
Another factor likely to support stocks is the boost to company property portfolio values from a booming property market.
Food group Greencore has gained 15 percent in the year to date, and 10.6 percent in the last month, partly on the back of a decision by the company to ask a local council to consider rezoning the site of a former sugar factory, which could result in a massive increase in the property's value.
"That's a theme right across the Irish market," said McConnell, noting that companies such as Fyffes, Grafton and Eircom were also looking to maximise returns from their properties.
All of this is underpinned by an economy expected to grow by around 5 percent this year - double the euro zone as a whole.
"You've got economic dynamics that are superior in the Irish market than ... in central Europe and Germany, so there's a bigger argument to be buying Irish equities," said McConnell.
Interest rate increases by the European Central Bank could dent Ireland's buoyant property market but that would probably not knock the equity market seriously off course, he said.
The market is also being buoyed by international merger and acquisition activity.
Financial services firm Irish Life & Permanent Plc, the country's fourth-largest company by market value, gained 7 percent last week on the back of expectations of a fresh wave of consolidation in the insurance sector.
Threats to market growth include a possible fall in the share price of Elan Corp, the ISEQ's eighth-biggest stock, if further problems emerge with its main drug, Tysabri.
A decision by Australian investment firm Babcock & Brown Capital Ltd. not to proceed with a bid for phone group Eircom could also see a fall back in that company's shares.