TRADING in Dublin was described as "relatively flat" yesterday, as most investors focused their attention on the latest development in the proposed merger between Avonmore and Waterford Foods.

It wasn't hugely active," one investor said. "The big stocks, the leaders, were up and down, but everyone was looking for the merger.

"There was an immediate price reaction in Waterford, and I think that shows growing confidence in the market, even with the requirement for 75 per cent approval, that the deal can be sold to the farmers," commented an analyst.

Others said that demand for Waterford shares, and Avonmore shares, had helped sentiment, in turn driving the ISEQ index higher.

Waterford's share price jumped 15p, from 110p to 125p, while Avonmore climbed 6p, from 245p, to close at 251p. Elsewhere in the food sector, there was some interest in Kerry, but it fell hack to where it started the day, at 650p, Golden Vale gained 2p to end on 69p, Fyffes dropped 1p to close on 93p, and Greencore fell 1.5p from 345p to 343.5p.

Among the main financial shares, Allied Irish Banks, which last week had its credit rating up graded by Moody's gained 1/8p to end trading on 508 1/8p, while Bank of Ireland showed an ex-dividend price of 737p. Anglo-Irish Bank remained steady, closing at 86p.

Irish Life was up 5p, from 340p to 345p, while Irish Permanent was unchanged at 645p.

Of the main industrials, Smurfit, whose shares have been boosted recently by a strong showing in the group's subsidiary in the US, Jefferson Smurfit Corp, rose 1p to close at 189p. CRH fell by 2p, from 657p to 655p.

There was some trading in Independent Newspapers, which has been advertising heavily in the domestic and international press about its recent annual results, but it fell back in late deals to where it began the day, at 340p. Waterford Wedgwood, which shares a chairman with Independent, Dr Tony O'Reilly, also remained static, at 88p.