‘Celtic tiger’ sounds a bit dated. ‘Celtic horse’ might be a better way to describe the current Irish stock market, which is riding steadily but not booming at 1990s levels.
Fund managers and analysts predict strong growth this year, with 84 percent expecting the Irish economy to outperform the rest of the Eurozone according to the IR magazine-commissioned Investor Perception Study, Ireland 2006.
Equities enjoyed strong gains in 2005, but these were not on a par with those of the Celtic tiger years. ‘Results have been positive, but no one beats numbers by 15 percent today,’ comments Paul Burke, head of IR at Davy. Still, Davy predicts double-digit gains in 2006 for Irish equities, and Burke attributes much of the current momentum to IR’s efforts in 2005: ‘What the corporations have done is make sure their message is getting out there in terms of guidance, visiting institutions and broker input,’ he says.
In line with Burke’s assessment, the wider investment community continues to praise Irish IR. The domestic and international investment community enjoys meeting with Irish issuers and appreciates the fact that much of IR continues to be handled by senior management. This is according to respondents to the Investor Perception Study, Ireland 2006.
‘You get a better feel for the company, and there is a more personal approach to IR,’ says one perception study respondent. ‘This is probably to do with the small size of both the market and the companies.’
Another US-based respondent notes the high caliber of IR among mid-cap companies here: ‘Generally, Irish companies do a good job; the large banks could be more proactive, but the mid caps do well.’ Others say the relatively small size of the domestic investment community is pushing Irish IR to be more competitive and proactive in getting institutional attention.
While the general view of IR is positive, there is a natural preference among analysts and investors for IR professionals who enjoy a senior position within their organizations, the study shows. Perception study respondents prefer to deal with senior management directly if the IR person isn’t in management’s inner circle.
‘What we find is that the CEO and finance director have brought a lot to the IR function and spent lots of resources,’ says Burke. ‘But lots of IROs have industry experience and access to senior management, so they are well tuned in.’
