Irish Stock Market Plummeting
- Thread starter emsman
- Start date
And given that these funds are likely to seek and find opportunities elsewhere, this money won't be back anytime soon. So it's hard to see a quick revival of the Dublin market.
ISEQ overall up 4.5% today so far so looks like someone is buying! Notwithstanding Irish banks exposure to the Irish property market the recent well documented falls in the ISEQ should also be taken in the context of the spectacular gains in the index from June 06 to June 07 where it rose by about 47%.
G
gonk
Guest
I suppose it could only go down so far, when the likes of Bank of Ireland were available yesterday at about a 5% dividend yield.
S
South
Guest
I would imagine these results are not going to be too surprising, it's the outlook that investors are concerned about.
I am going to hazard a guess and say that the outlook will be "economy is performing well, credit quality is excellent, housing market slow down is welcome and that profitability is still expected to grow strongly"....Any deviation from that common thread or even the slightest negative sentiment and the ISEQ will enter free fall again. No pressure on AIB then!!
Isnt it ALWAYS the outlook that investors are concerned about
what do the so-called professional experts think about the ISEQs crash??
Its interesting and (as always) annoying to read the irish economy spin doctor's reports and articles around this time,
aside from (obviously risky) property market there was no ISEQ doom and gloom forecasting from any bank economists, brokers, government departments within the last few months.
(when its convenient to now ignore property market trouble)
we have a high growth, low employment, low debt-asset ratio
economy,
but
hang on!
the ISEQ has dropped (rather "had correction") nearly 20%
so how did the outlook for the big irish companies drop by such a HUGE
amount in such a short time with no ECB rate shocks??
20% drops arent supposed to happen to strong economies without
ANY warning!?!?
5 maybe 10% would be OK,
but the fact that the iseq has plummeted so much
and none of the aforementioned spin-doctors even mentioned this
possibility and risk (ok, its not in their professional interests to)
shows up their credibility,
but more importantly exposes the DANGERS of blindly following most investment professionals advice.
however these spin-doctors are not all bad,
there has been alot of honest commentary about irish property (which is
so influencial on ISEQ!), albeit after alot of bubble blowing SPIN!
we have been warned to expect various property slowdowns,
so the smart investor takes these forecasts into account when considering trading ISEQ companies,
but why hasnt the the property uncertainty and fear preaching
fed across into ISEQ company analysis and forecasting??
the key question:-
is it usual behaviour for property prices to follow banks, builder, etc stock prices?
or for national stock prices to follow nationaly property prices??
or are we simpley just feeling the fear of the US sub-prime meltdown?
JR.
I'm no expert, but my understanding of the current climate is that borrowers are defaulting on mortgages in the US sub prime market. This has caused the collapse of a few lending institutions. This has led to worries about lending practices, especially lending for investment in the stock market. This has led to banks insisting that loans be paid back/or restricting the lending of new money for this purpose. This means a reduced liquidity in the market (as fewer investors can afford to buy stock). With this reduced liquidity, comes reduced demand which causes prices to fall (simple economics right?).
The fear element that you mention is probably a result of investors viewing the state of the US markets, and realising that it could easily happen in Ireland, given the current property slowdown and interest rates hikes.
I realise it's probably a bit more complicated than that (i.e.: so much of the iseq directly relies on construction and lending for construction), but I think it's the guts of it
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Markjbloggs
Registered User
- Messages
- 384
Hearing rumours that Caxton Associates, one of the 10 largest Hedge funds in the world, is about to blow up.
Fasten your seatbelts!!!
Fasten your seatbelts!!!
charttrader
Registered User
- Messages
- 117
Sounds like this rumour is baseless;
Caxton denies any such rumors. According a friend o' DealBreaker, there was a "larger than normal liquidation in order to reduce risk," the main fund is down 3-4% mtd and Caxton "made money today.
[broken link removed]
Caxton denies any such rumors. According a friend o' DealBreaker, there was a "larger than normal liquidation in order to reduce risk," the main fund is down 3-4% mtd and Caxton "made money today.
[broken link removed]
Z
z109
Guest
Still it's not being let go!
[broken link removed]
What's the significance of hedge fund blow ups to the ordinary person whose main investment is pension/PRSA/PIP?
[broken link removed]
What's the significance of hedge fund blow ups to the ordinary person whose main investment is pension/PRSA/PIP?
The subprime crisis is hitting financial stocks the worst that is why the iseq is getting hit badly because it is now heavy in financial stocks, maybe if the banks keep falling the iseq will become more balanced. In the short term there maybe a recovery, but i think the iseq is going to thread sideways for a few years simply because financial stocks are now out of fashion and it will take a few years for renewed investor interest, so don't be too quick in jumping back in.
Brendan Burgess
Founder
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- 53,770
We don't discuss individual shares on Askaboutmoney.
I appreciate it's hard to have this discussion without breaking that rule, but does this thread contribute anything? It's pure speculation type stuff. It's a little like the discussion of house prices. I think it might be better discussed over on askaboutshares.com?
Brendan
Administrator
I appreciate it's hard to have this discussion without breaking that rule, but does this thread contribute anything? It's pure speculation type stuff. It's a little like the discussion of house prices. I think it might be better discussed over on askaboutshares.com?
Brendan
Administrator
I disagree. This is a discussion about the fall in the ISEQ which is relevant to many investors. In particular I think the disproportinate decline in the ISEQ relative to other world indices, and the possible reasons behind that decline, is very important regarding one's decision to invest in the ISEQ. One or two individual stocks have been mentioned in the thread but imo that is substantially different to discussing valuations on particular stocks. There are numerous threads on AAM that involve speculation about why a particular event has happened or is going to happen, so I don't see why this one should be singled out on that basis.
I am in full agreement with you there demoivre. Having read this site for quite some time far too many topics and threads have been strangled on askaboutmoney.com with little valid reasons.
The ISEQ has previously dropped in the summer i.e." sell in May etc" ( look up the historical stats yourselves) but this year there has been panic selling other wise we would not have seen the quick rebounds. Is there some stock market manipulation of the ISEQ going on?
Going forward should the ISEQ's ETF holdings be rebalanced to reflect the current economic situation? If so would anyone care to suggest how it should be rebalanced? e.g. less in financials, construction etc?
That sort of negates the whole point of index linked ETFs. ETF's holdings are weighted according to market cap in the index (regardless of what the current economic situation is). What you are looking for is a managed fund.
The ISEQ ETF is being rebalanced. See here.
http://www.ise.ie/app/showdailyindex.asp
The financial index has fallen much more than the general index. This means that financials now make less of the index than they did a year ago.