Irish bond yields hit high on news of drop in retail

Iseq:2,967.55 (+41.10) Settlement Date:June 1st

IRISH 10-YEAR bond yields hit a euro-era high of 11.19 per cent yesterday after the Central Statistics Office released poor retail sales figures for April, adding to worries about the economy.

The rise, which was reversed a touch later in the day, had the expected effect on spreads between Irish and German debt, which also widened to a high for the euro period.

Things were slightly more positive on the home market front, with the Iseq closing 1.4 per cent higher. The rise owed much to positive performances from market heavyweight CRH, which ended the session 20 cent stronger at €15.05.

A solid performance from Ryanair helped too, with the airline benefiting both from the receding threat from the Icelandic ash cloud and a warm response to its investor roadshow. Shares in the airline rose by 7 cent to €3.52, while stable-mate Aer Lingus rose by 1.6 cent to 82.6 cent.

Elan was strong again too, still riding high on this week’s acquisition and agm news. The pharma firm added 30.1 cent to finish at €6.612.

The banks were also in relatively solid form, with Bank of Ireland in particular recovering a shade after a poor few days. Shares climbed by 0.6 cent to 18.5 cent amid expectations that the bank will unveil plans for a debt-for-equity swap for junior bondholders early next week.

Irish Life & Permanent was also firmer yesterday, adding 1.2 cent to settle at 11.1 cent. AIB closed almost flat.

There was no confirmation from Doyle Group of its sale of 12.5 per cent of Irish Continental Group yesterday, but the exchange did receive notifications from two institutional shareholdings of increased positions following Thursday’s placing. Shares in the ferry operator fell by 19.5 cent to €16.20.