HUGE demand for the main financial shares in the wake of AIB's record acquisition in Pennsylvania drove the Irish market into record territory, with over £430 million added to the value of the market as share prices rose by almost 1.9 per cent.
After failing sharply on Tuesday on fears that an acquisition might also involve a rights issue, AIB shares recovered strongly with investors relieved that no Dublin fundraising is involved in the £840 million Dauphin acquisition.
While some in the Dublin market still fear flowback of shares issued to Dauphin shareholders, AIB's proposal 19 buy in 50 million shares should ease any flowback problems. AIB closed up 20p on 427p yesterday, and with a substantial yield gap against main rival Bank of Ireland, dealers believe that further gains are likely.
Bank of Ireland also benefited from the surge in the financials and closed up 16p on a new high of 582p. The bank announced yesterday that it is raising £150 million sterling in a new floating rate note, the proceeds to be used to restore Bank's Tier Two capital ratio to 12 per cent after the Bristol & West acquisition is completed.
Other financials were also stronger, with Irish Permanent up 6p to a new high of 521p while Anglo Irish gained 2p to 79p.
Woodchester remained in demand and closed on 237p on continued speculation about a sale of the Credit Lyonnais controlling stake.
The fourth quarter and full year results from JS Corp were broadly in line with expectations and Smurfit closed marginally weaker on 174p. Smurfit gave no indication of its intentions towards the Morgan Stanley stake in JS Corp, whose shares were trading at around $15 1/4 at the Dublin close.
Elsewhere among the industrials, CRH jumped 10p to 640p while second liners to make gains included Adare - up 14 1/2p to a new high of 614 1/2p and Grafton - up 20p to 720p.
