11 May 2010: Irish stocks soar 7% in dramatic rebound

Irish stocks staged a dramatic turnaround yesterday soaring by 7% and registering their biggest gains in almost two years. Stocks increased in value by €3 billion from Friday on a day when the Spanish stock market soared by the most on record, jumping 14%. European stocks saw their worst drop in nearly 18 months last week but rebounded yesterday with British stocks surging the most since December 2008 as the FTSE 100 climbed 5.2%. The strong performance followed the unveiling of an unprecedented €750bn loan package and a programme of bond purchases to stop a sovereign-debt crisis. AIB jumped almost 24% to €1.37 while Irish Life and Permanent jumped 18% to €2.71. Bank of Ireland climbed 18% to €1.67 after it said investors agreed to swap €852 million of subordinated debt for equity, prompting the lender to cut the size of a planned share sale by almost 10%.

The bank also had its rating raised to "buy" from "add" at Goodbody Stockbrokers. Airlines also had a good day with Ryanair up 3.3% to €3.48 and Aer Lingus soaring 7% to 70 cent. Aer Lingus announced yesterday that passenger numbers fell by 27% last month to 689,000, mainly due to the impact of the ash cloud from Iceland’s volcano. Big gains were also seen from CRH, which saw its share price increase 13.5% to €20.15. Christoph Riniker, a Bank Julius Baer Group strategist in Zurich, said: "Last week showed that we needed measures from central banks and we’ve almost recovered from last week’s losses. The fundamental picture still points to  improvement towards the end of the year." BNP Paribas surged 21% as France’s CAC 40 soared 9.3%. The Athens market gained more than 9%.

The support package "shows the ECB, the EU and IMF can act quickly, in spite of all indications to the contrary during the ECB press conference last Thursday and in spite of all doubts about their ability to do so by most US investors last week," Credit Suisse’s London-based strategist Andrew Garthwaite said. "Ultimately, this will lead all central banks (apart from China) to have a looser monetary policy for longer." Also yesterday NAMA said it has completed the transfer of the first batch of loans from Anglo Irish Bank. It confirmed the discount it paid for the €10bn worth of loans was 55%, in line with the figure it gave earlier this month.

Source – Examiner.ie