Continued interest rate cuts could spur Irish companies to float on the stock market, experts say.
The number of companies launching on global stock markets for the first time grew by 20 per cent to 291 in the first three months of the year, a report published on Monday shows.
However, Fergal McAleavey, corporate finance partner with accountants EY, the report’s publishers, says activity in the Republic is more subdued. Companies here more generally raise private capital from investors or to allow shareholders in businesses to cash out, he notes.
“While the immediate landscape appears quite unsettled, continued interest rates cuts by the European Central Bank, together with more market stability in Europe could spur activity here in the domestic market,” he says.
The European Central Bank is widely expected to cut rates further this year after reducing them by a quarter of a percentage point this month.
Interest rate cuts are generally regarded as good for stock markets as they encourage investors to seek assets that give higher returns than cash.
However, indications are that the Irish Stock Exchange continues to face defections.
Just weeks ago, Dalata Hotel Group said it had hired financial adviser Rothschild & Co to work on a review of its options to raise capital and boost value for shareholders.
The same firm is advising titanium miner Kenmare on the bid by its former managing director Michael Carvill and private equity investor Oryx Global Partners to buy that listed company.
These moves could end with both companies reverting to private status and leaving the Irish Stock Exchange.
The Dublin market has suffered several high-profile departures in recent years.
Paddy Power owner Flutter Entertainment, packaging giant Smurfit Westrock and building materials behemoth CRH all decamped to the New York Stock Exchange.
Flutter and CRH said their moves reflected a focus on their US markets, and the fact that Wall Street lures huge amounts of capital, making it attractive for large companies.
However, turmoil sparked by US president Donald Trump’s tariffs and trade policies have increased fear that investors there may rein in activity.
Mr McAleavey notes that the volatility had prompted a number of high-profile companies to shelve stock market launches.
The Irish Stock Exchange, now called Euronext Dublin, is working to establish a Euronext Access market in Dublin, similar to ones operated by the wider Euronext Group in Paris, Brussels and Lisbon.
It is anticipated that the “springboard” market for small companies will be launched by the middle of this year, as the exchange seeks to reboot listings.
