SHARE prices of publicly quoted Northern Ireland companies fell sharply yesterday in the wake of the Canary Wharf bombing, as investors showed their nervousness about the prospects for investment in Northern Ireland.
The fall in the share prices came against the background of an overall improvement on the London stock market. Northern Ireland companies whose interests are confined to the domestic Northern market suffered most.
Northern Ireland Electricity, Ulster Television and Hampden fell sharply, while companies such as Boxmore, Mackie, Powerscreen and Lamont - whose main interests are outside the North - were hardly affected at all.
The Dublin stock market was also initially weaker on a view that overseas investment in the Irish economy might be affected by the bomb, but recovered in later trading as investors took the view that there was no real reason to sell Irish shares.
If any shares are to suffer from the bombing, then dealers believe that tourism related companies such as Irish Continental, Jurys Hotels and Ryan Hotels may be the worst affected. The ISEQ Overall Index closed down 3.7 points on 2303.97. Gilt prices in Dublin fell in early trading, with overseas institutions the main sellers of stock.
Northern Ireland Electricity was the focus of heavy trading in London, especially after London broker Charterhouse Tilney downgraded the shares from a "buy" to a "short term sell" without even giving NIE an intermediate "hold" recommendation. Charterhouse Tilney cut its rating for NIE because it says that renewed terrorism in the North could undermine hopes for more investment.
NIE fell 29p to 397p in early trading but gradually recovered throughout the day before closing down 19p on 407p. Trading was exceptionally heavy with almost million shares changing hands - this is a huge turnover level compared to NIE's normal pattern of trading, where shares usually change hands in units of a few thousand.
Ulster Television was also lower, but did not trade in anything like the volumes of NIE. The 18p fall by Ulster TV to £12.70 comes against a background of a phenomenal rise in the share price over the past year.
Hampden Group - which has the Texas Homecare franchise in the North and the Republic and which is planning number of joint ventures north and south of the Border with British retailers - lost 7p to 88p. Investors take the view that the retail sector is the one most likely to suffer from renewed terrorism, something that may halve and impact on the plans by the likes of Sainsburys and Tesco to expand into the North.
The other Northern Ireland public companies were hardly affected by the unease. Engineering group Mackie lost just 2p to 387p, packaging group Boxmore was unchanged on 429p, Powerscreen closed 1/2p higher on 378 1/2p while textile manufacturer Lamont was 6p higher on 282p.
Surprisingly enough, the Ewart property group which has extensive interests in the North, including the Laganside complex in Belfast, lost just 1p to 50p. And on the Dublin market, Fitzwilton - whose main interest is the Wellworth supermarket business in the North - was unchanged on 48p.
