Irish Stock Exchange Looks Back On Record Year

by Jason Gorringe, Tax-News.com, London

15 January 2007

The Irish equity market performed exceptionally well in comparison with global markets last year, the ISE reported in its year-end review, and the 28% increase in 2006 in the ISEQ Overall index outperformed indices such as the Eurostoxx 50, FTSE, NASDAQ and the Dow Jones Industrial Average. The index reached a lifetime high of 9,453 on 28th December.

The ISEQ sub-indices also reached their lifetime highs in December with the ISEQ Financial, General, Small Cap, ITEQ and ISEQ 20 indices gaining 25%, 30%, 34%, 44%, 28% respectively in the year.

The market capitalisation of companies on the ISE grew to EUR119.3 billion in 2006, an increase of 26% on the prior year's total of EUR94.7 billion. The ISE saw equity turnover grow to EUR129.2 billion in 2006, a 19% increase on the 2005 total of EUR108.8 billion, and average daily turnover for 2006 was EUR511 million. The fourth quarter saw a 29% increase in average daily turnover to EUR555 million when compared to the 2005 daily average of EUR430 million.

The number of equity transactions being undertaken on the ISE also grew strongly: 900,900 deals were done in 2006 representing growth of 14% compared to 792,120 in 2005. Quarter four saw an increase of 17% in the daily average number of transactions to 3,652 from 3,131 in 2005.

These figures emphasise the continued strength of both institutional and private client interest in Irish equities. In addition, trading membership of the Exchange continues to grow with Danske Bank, Interactive Brokers and Credit Agricole Cheuvreux joining the ISE in 2006.

The ISE admitted the first Exchange Traded Fund over Irish equities in 2005. The ISEQ 20 Exchange Traded Fund provides investors with the opportunity to invest easily, at low cost and via a single security in a portfolio of twenty of the most liquid and largest Irish equities. It performed well in 2006: assets under management in the ISEQ 20 ETF increased 72% from EUR29.4 million to EUR50.6 million, and the trading price increased 28% from EUR14.68 to EUR18.74 over the year. In 2006, 18.1 million shares were traded with an aggregate value of EUR285 million.

ISE Chief Executive Tom Healy stated:

“This is another outstanding performance by the Irish market and the figures show clearly that the Irish Stock Exchange is an attractive location for investors who wish to trade in Irish equities. Our Irish Enterprise Exchange market has been very well received and we expect a further eight new entrants in 2007."

"We also expect at least one new entrant to the Official List this year. The past year has seen the Exchange further strengthen its market, product and service offerings, as well as consolidating its position as the global leader for the listing of investment funds and the leader in Europe for debt securities. We look forward to further growth in 2007 in all sectors of our business.”

Ten new companies joined the Exchange in 2006, raising a total of EUR3.7 billion. Aer Lingus Plc had a successful entry to the Official List market on 27 September 2006, raising EUR1.17 billion.

Nine new companies joined the Irish Enterprise Exchange (‘IEX’) raising a total of EUR941 million, and bringing the number of companies on IEX at year end to twenty three. The market capitalisation of IEX grew by 190% in 2006, rising from EUR847 million at the start of the year to EUR2.46 billion at year end. Turnover on IEX has increased 116% in 2006 from EUR584 million to EUR1.26 billion.

Following another year of growth, total funds and sub-funds listed at 31st December 2006 stood at over 4,300, while the total number of classes listed exceeded 9,600. The final quarter of 2006 saw a strong finish to the year, with the listing of 205 new funds and sub-funds. Notable new listings included offerings by iShares, Mercer, Marshall Wace, Goldman Sachs and HSBC.

Debt securities experienced very good growth on the ISE in 2006, with a significant increase in listings compared to 2005. The Irish Stock Exchange is now widely recognised as the pre-eminent stock exchange for the listing of asset backed securities in Europe. At 31st December 2006, there were 2,883 Debt entities listed. There were 988 new Debt entities listed in 2006, representing a 45% increase compared to the number of new listings in 2005.

In 2006, there has been considerable growth in the number of corporate debt listings with notable listings including Wal-Mart, Banco Industrial Do Brasil S.A., Bristol-Myers Squibb Company, EBS Building Society, Fiat, Manpower Inc and Porsche.

The Exchange has also seen a considerable increase in the number of Latin American and Russian deals. New medium term note programme listings have come from Anglo Irish Bank Corporation plc, Banca CR Firenze S.p.A., BNP Paribas, Morgan Stanley, Depfa Bank plc, Lehman Brothers and SunTrustbank.

The Exchange expects further growth in its specialist listings businesses (both Debt and Funds) in 2007, consolidating its leading position in both markets. The strength of the Irish Exchequer and the further consolidation of the now relatively modest national debt continued to impact the Irish Government bond market. Turnover in Government bonds for 2006 totalled EUR37.5 billion, a 27% decrease on 2005.

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