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Iseq as a proxy for economy

  • 11-06-2019 10:20am
    #1
    Registered Users Posts: 12,289 ✭✭✭✭ Mad_maxx


    The S+P is usually seen as a fairly accurate representation of the U. S economy but I'm beginning to think the S+P is the best gauge of the irish economy also, we are so reliant on the American multinational sector that the iseq is pretty irrelevant, afterall, the iseq has performed horribly since the brexit vote three years ago, bank of Ireland shares are worth half what they were five years ago and the other big names like Ryanair, crh, smurfit kappa, are also flat for several years.

    I'm just posing the question that in a small open economy like ours, the domestic stock market might tell us very little?


Comments

  • Registered Users Posts: 5,228 ✭✭✭ The J Stands for Jay


    The iseq index is only 20 companies. Without looking any further into them, I would have to say they are unlikely to be a useful proxy for the economy. The majority of employers in Ireland are SMEs and like you said, American companies make up a lot of the economic activity here.


  • Moderators, Business & Finance Moderators Posts: 7,844 Mod ✭✭✭✭ Jim2007


    Mad_maxx wrote: »
    The S+P is usually seen as a fairly accurate representation of the U. S economy but I'm beginning to think the S+P is the best gauge of the irish economy also, we are so reliant on the American multinational sector that the iseq is pretty irrelevant, afterall, the iseq has performed horribly since the brexit vote three years ago, bank of Ireland shares are worth half what they were five years ago and the other big names like Ryanair, crh, smurfit kappa, are also flat for several years.

    I'm just posing the question that in a small open economy like ours, the domestic stock market might tell us very little?

    You live in Euroland, why would you even consider concentrating in such a small portion of that economy, especially since it is basically a penny stocks market.

    And no the S+P most defiantly does not represent the Euroland economy.


  • Registered Users Posts: 12,289 ✭✭✭✭ Mad_maxx


    Jim2007 wrote: »
    You live in Euroland, why would you even consider concentrating in such a small portion of that economy, especially since it is basically a penny stocks market.

    And no the S+P most defiantly does not represent the Euroland economy.

    So CRH and kerry are " penny stocks"?

    I was arguing earlier that the S+P is a better barometer of the overall Irish economy, the European stock markets have performed pitifully this past five years as well with the exception of Germany


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