Irish Economy
Irish Shares: Stock market capitalization at end 2010 was at 1997 level in current money values
By Finfacts Team
Jan 1, 2011 - 9:32 AM

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Irish Shares: The stock market capitalization of public companies on the Irish Stock Exchange at the end of 2010 was at €47.6bn compared with the end of 1997 level of €46.8bn. However, this comparison is in current money values, which means that in inflation-adjusted terms, 2010 was much lower.

The total market capitalization at the end of 2009, was €44bn compared with €82bn at end 2004; €95bn at end 2005; €119bn at end 2006; €93bn at end 2007 and €32bn at end 2008.

The ISEQ index of shares fell 3% in 2010 to 2,885 while the financial sub-index tumbled 61% to 414 points.

Eleven companies account for 80% of the capitalization making up the ISEQ index with global building materials firm CRH at 27.3%, followed by Ryanair at 13.3%.

Just before Christmas, Allied Irish Banks (AIB), the former leading Irish bank, was moved from the main market of the Irish Stock Exchange to the small  companies market. It had a value of €324m on Dec 31st and accounted for 0.7% of the total market capitalization.

On February 21, 2007, the ISEQ index rose to an-all time high of 10,041 and the financial sub-index rose to 18,098.

Bank of Ireland closed at €18.65; Anglo Irish closed at €16.64 and AIB closed unchanged at €23.95.

Bank of Ireland closed at 37 cent at the 2010 year-end and AIB was at 30 cent.

The Irish Examiner reported in February 2007: "Much of the growth seen and expected in the Irish market is underpinned by the economic fundamentals.

This year and next the Irish economy will grow about 5%, compared to 1.5% last year for the Eurozone and 2.2% for 2007.

For the past few years, stock market performance has been up over 20%, with 25% growth in 2005.

Forecasts for this year are very good, with growth in the overall value of the market expected to reach 20% or better."

In June 2007, one month after the general election and six weeks before the onset of the international credit crunch, Finfacts reported that investors had dumped Irish shares after Irish Life & Permanent said in a trading statement, that its residential mortgage book would grow by 20% in 2007.

Only 20%!!!

In July 2007, Citigroup CEO Chuck Prince had infamously dismissed fears about an early end to the postmillennial debt frolics. “When the music stops,” he told The Financial Times, “in terms of liquidity, things will get complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.”

In the same month, Taoiseach (Prime Minister) Bertie Ahern, who had been a hospital bookkeeper before entering politics, told a a trade union conference that he did not know how people who moaned about the economy did not "commit suicide".

"Sitting on the sidelines, cribbing and moaning is a lost opportunity. I don't know how people who engage in that don't commit suicide because frankly the only thing that motivates me is being able to actively change something,"
Ahern said.

Two weeks before, Finfacts said the slowdown in the Irish housing market which would result in a fall in economic growth in 2008, would hit bank shares which "have got investors addicted to impressive double-digit returns during a long boom."

Ryanair's Michael O'Leary said:
`We expect a big downturn in the next 12 months, we just don't know what's going to cause it. We must be due one.''

Click for report (pdf)

Finfacts article, June 2007: High foreign ownership of Irish shares will be bad news for stock market in 2008 when housing output will plunge 28% compared with 2006 peak

SEE also: Global Stock Markets 2010: Among big countries, Germany and US were in the lead while shares in China fell

Louisa Bojesen takes a look back at the debt crisis which dominated headlines in Europe in 2010. The bailouts for Greece and Ireland have proven to be a real test of the European Union’s strength. Heading into 2011, the main question is which country will need financial assistance next:

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