Positive day for bonds and equities

Momentum was positive in the markets yesterday, both for bonds and equities. Strong trade data from China helped, as did an agreement on cuts to the EU budget. Closer to home, an afterglow from the Project Red deal on promissory notes was in evidence.

DUBLIN

As the NTMA formally swapped the promissory notes for new government bonds, it said the bonds would pay interest every six months based on six-month Euribor plus an average interest margin of 2.63 per cent across the eight issues. NTMA chief executive John Corrigan meanwhile assured investors on a conference call that the prom note plan was “not something that was just pulled out of the hat midweek by the Irish authorities”.

The Iseq finished the day 1.38 per cent higher, with Aer Lingus providing the main talking point as its shares rose well beyond the €1.30 level offered by Ryanair in its takeover bid. Volume in Aer Lingus was above average as it closed 7.4 cent, or 5.7 per cent, stronger at €1.37. It reached above €1.40 earlier in the, while Ryanair climbed by 7.5 cent to finish at €5.74.

Bank of Ireland attracted good demand at lower levels, having lost ground on Thursday. Shares in the bank, seen by some as a proxy for the Irish economy, added 0.4 per cent to end the session at 13.5 cent. The bank issued a statement noting that the repurchase arrangement it entered into with the Government and IBRC to avoid last year’s promissory note repayment was being terminated on a no gain/no loss basis.

CRH also did well, rising 38.5 cent to €15.72. Solid too were CC, up 3.6 cent to €4.93, and DCC, climbing 53 cent to €27.04. The latter’s possible move to a London listing is seen as a negative for the Iseq as a whole.

Paddy Power benefited from a rising tide for gaming stocks on the back of positive noises on online gaming emanating from New Jersey governor Chris Christie. Shares closed up 116 cent at €62.50.

LONDON

UK stocks climbed, paring the FTSE 100’s first weekly loss since December. The index was up by 35.51 points, or 0.6 per cent, at 6,263.93 at the close in London, paring this week’s drop to 1.3 per cent.

The broader FTSE All-Share Index also rose 0.6 per cent.

Bwin.Party soared 16 per cent to 135.8p, while 888 Holdings jumped 17 per cent to 135p, after the Chris Christie comments on online gaming. Playtech, which develops software for the gaming industry, surged 8.6 per cent to 532p.

Vodafone rose 1.2 per cent to 173.9p. Bank of America’s Merrill Lynch unit raised its recommendation on the shares to buy from neutral.

EUROPE

European stocks advanced the most in a month, paring a weekly decline. Software, Germany’s second-biggest software maker, rose 2.7 per cent after saying it will buy back shares. Credit Agricole jumped the most in more than four months after Exane BNP Paribas raised its recommendation on the stock. Telecom Italia declined to a six-month low after posting full-year earnings below analysts’ projections.

The Stoxx Europe 600 Index climbed 1.2 percent to 287.34 at the close of trading, the most since the start of the year, paring the week’s drop to 0.3 per cent. It has still gained 2.7 per cent so far this year as US lawmakers agreed on a budget preventing spending cuts and tax increases that had threatened to push the world’s biggest economy into recession.

US

US stocks edged higher, with the benchmark SP index hitting a five-year high, in the wake of encouraging domestic and international economic reports. Data showing stronger international trade in China and Germany, and a report indicating the US trade deficit had narrowed in December, pointed to improving global demand.

Shares of LinkedIn jumped 22 per cent to $151.81 after announcing quarterly profits and giving a bullish forecast for the year. – (Additional reporting: Reuters/Bloomberg)