AIB rating downgraded on lacklustre day of trading

DUBLIN REPORT: Iseq: 2,713.71 (-6.06) Settlement date: October 12thTHE ISEQ index had a lacklustre day, slipping six points as investors remained nervous about the strength of the Irish banks and a new US report showed that its economy lost more jobs than estimated in September.

Credit ratings agency Standard Poor’s cut its long-term rating on AIB to “BBB+” from “A-”, bringing it three notches above junk status. “In our opinion, the ability of AIB to return to an A category standalone credit profile is unlikely for a number of years,” SP said in a statement.

AIB’s share price fell to 39 cent, down 1 cent or almost 3 per cent.

Bank of Ireland also drifted back, closing down 4.2 per cent at 65 cent, while Irish Life Permanent held steady at €1.55.

Exploration group Kenmare fell in London and in Dublin, where it weakened 12.7 per cent to 19 cent, after a large discharge at its mine in Mozambique.

CRH, the largest stock on the index, also had an uneventful day, finishing up 9 cent at €12.49.

Drinks group CC was also flat, closing at €3.03 ahead of the release of its interim results next Tuesday. Analysts expect the performance of its Magners and Tennent’s/ABI brands to compensate for weaker returns in Irish cider. Magners volumes are up 4 per cent in the first half, according to Nielsen data.

There was little action among the airlines, as Ryanair climbed 1 per cent to €4.11, while Aer Lingus was flat at €1.11.

It was a strong day for pharmaceuticals, with Elan finishing up around 2.6 per cent at €4.18. This follows a proposal by the UK’s National Institute for Clinical Excellence that Alzheimer’s disease treatments should be extended to a wider group of patients.

Agri-food group Origin gained 3.45 per cent to close at €3.00, while Kerry finished down slightly at €25.40.