Equity investment in continental Europe remains a rewarding prospect thanks to the advent of the euro zone according to a report by Asset Management Trust (AMT). Eurozone Update - September '99 predicts the emergence of five dominant investment themes: the euro zone's strong economic background, restructuring of corporate Europe, pension funds shifting from bonds to equities, market preference for euros over the US dollar and a bias towards blue-chip stocks.

This may not augur well for the Irish stock market. In addition to the euro threat, trading volumes on small markets have declined as fund managers prefer to pick pan-European stocks.

Earlier in the year, AMT predicted additional difficulties for Irish businesses due to their sterling exposure, imbalances in the labour market, inappropriately low interest rates and building inflationary pressures.