Please send your queries to Dominic Coyle, Q&A, The Irish Times, 11-15 D'Olier Street, Dublin 2, or e-mail to dcoyle@irish-times.ie. This column is a reader service and is not intended to replace professional advice. Due to the volume of mail, there may be a delay in answering queries. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.
Arnotts
I recently inherited approximately 12,000 shares in Arnotts from my mother, who had held them for some time. Could you give me your opinion of the short/medium term outlook for Arnotts as, living in London, I have very little knowledge of the current state of the Irish market?
Mr S.W., e-mail
The first thing I would say is that with a holding that is worth in excess of £60,000 at today's prices, you should get some proper advice from a stockbroker and, possibly, an independent financial adviser.
Giving advice on individual companies is a specialist business and one that journalists are not in a position to do. Nor, for that matter, are we licensed to enter the field.
So specialist advice aside, what I can do is apprise you of the fact that Arnotts is one of the few retailing shares in the Irish market. The company has done well in recent times and has invested heavily in its stores, particularly its flagship operation in Dublin. It is currently trading at a price/earnings ratio of around 11 and a gross yield of 3.4 per cent.
There is no indication at this time that its current strength should dissipate in the short or medium term. Much of its success relies on continued spending by Irish consumers, who are currently increasing their borrowings at the rate of close to 25 per cent a year because of the economic boom. This boom is fuelled in large part by the performance of the multinational sector and, as such, the outlook depends on factors elsewhere, particularly in the US, as much as on events domestically.
On the other hand, Arnotts ranks 45th among shares listed on the Irish exchange by market capitalisation. Small and mid-cap stocks in Ireland have had a rough ride in recent times as institutional investors especially look further afield with the advent of the euro zone.
Ultimately the choice is yours. You give no indication of what, if any, other investments you hold. This would be a factor in any decision, as would guesstimates about the future direction of the exchange rate between the euro and sterling, the pound being now but a denomination of the euro. As I said at the outset, given the sum involved I think it would be prudent to spend a small fraction of your inheritance in obtaining sound professional advice.
Stock market
My query relates to the daily stock market bulletin in the financial section of
The Irish Times Two questions: 1. After Norwich Union changed its name (and until very recently), the results of CGNU were never given in the bulletin. Why? 2. The price that is now given in the bulletin is invariably substantially lower than the price that is obtainable from the RTE Teletext. Again, why is this so and who has it right?
Mr B.O'F., e-mail
When you refer to bulletin, I assume you are talking about the full list of closing prices for stocks on the Irish Stock Exchange, which appears on a daily basis from Tuesday to Saturday, and I take it that the "results" refers to the closing price for the share.
The closing price for CGNU has always been included in our list of closing prices, but has moved very little since it was first listed. Norwich Union first appeared in the Irish Stock Exchange list when the company was floated. Because it had a number of Irish policyholders who received free shares a the time the company demutualised, Norwich took a subsidiary listing on the Irish exchange, while its prime listing was in London.
Even at that time, there was rarely any activity in Dublin and therefore the price quoted on the exchange's index, and subsequently in the paper, rarely altered. The reason for this is that, although the company did have a listing in Dublin and shares could be sold in the Dublin market, this did not happen. Instead, Irish brokers offered shares put up for sale by their Irish owners in the British market, where there was a greater demand for them. Being more liquid, that market was likely to yield a better price more quickly than in Dublin.
When Norwich Union merged to form CGNU, the trend was exacerbated. While still retaining its Dublin listing, all business in the shares is carried out in London, even when the shares being sold belong to Irish investors and are being sold through Irish brokers. The listing at this stage is little more than a formality and will probably eventually disappear.
Turning to your second point, I cannot answer for RTE's Teletext service, but the share prices quoted in The Irish Times are those at the close of business on the Irish Stock Exchange on the previous day. For instance, Tuesday's paper will carry prices as of Monday's official market close at 5:30 p.m. These prices come to us from the Irish Stock Exchange official list itself. This is updated four times a day - at 10:30 a.m., 12:30 p.m., 4:30 p.m. and 5:30 p.m.
If you are interested you can compare the prices yourself against this list which appears on the stock exchange website at www.ise.ie under market information, again updated four times a day.
Deposits
Where would be the best place to lodge a sum of £20,000 that would allow quick access with decent interest also?
Ms.F.C., e-mail
As you have no doubt discovered, the rates available on demand deposit accounts - accounts from which you can withdraw your funds with no notice - are pitiful these days, even if they have risen somewhat from their lows of last year.
The Irish Times does produce a selected list of deposit rates, and some other national daily and Sunday newspapers do the same.
At the moment, Northern Rock appears to be well ahead of the posse on the rate if offers - 5.75 per cent on sums in excess of £1,000. This has been the case since it arrived from England a year ago. The only drawback, for some people, is that it does not operate a branch network. Of course, that helps it keep down costs and offer better rates but it does mean operating by telephone, which has some effect on the speed at which one can get one's money. Still, with any forward planning, the differential in rates should make it worthwhile.
