MARKET COMMENT
Three St Patrick's Day Shares

By Cliff D'Arcy
March 14, 2003

Monday, March 17th is St Patrick's Day, when the Irish enthusiastically celebrate their patron saint's day with pints of plain, joined by other fun-loving folk. However, given that it falls on a working day this year, I imagine a lot of the carousing will be done over this weekend....

It's true that the Irish have had a lot to celebrate recently. Not only is their national Rugby Union team producing some of its best-ever performances, their economy is booming too. Thanks to a well-educated, productive workforce, low land and labour costs, huge EU grants and inward investment, Ireland's economy is one of the healthiest in the Western world.

While the US, UK and Continental economies are experiencing a slowdown, Ireland continues to enjoy one of the highest growth rates outside of the "Tiger" economies of the Far East. Hence it's been nicknamed the "Celtic Tiger".

With the Irish economy in such good shape (especially when compared to the likes of Germany), it's hardly surprising that many Irish companies are doing well also. Let's take a look at three successful Irish firms that are also making an impact over here.

Bank of Ireland (LSE: BKIR)
Bank of Ireland (BoI) has a branch network in the Irish Republic, Northern Ireland and Great Britain, offering traditional personal banking, business banking, saving and investment products.

Through its ownership of ex-building society Bristol & West, BoI is Britain's 11th-largest mortgage lender, with a 2.3% share of all UK mortgages (based on 2001 figures). Note that Bristol & West is a big player in buy-to-let mortgages, which have been booming in recent years.

BoI's success in the Irish Republic, Northern Ireland and mainland Great Britain means that it is growing faster than many of its UK-based rivals. What's more, the bank has made no secret of its interest in making acquisitions in the UK: it hit the headlines last October when it made an unsuccessful bid for beleaguered British bank Abbey National (LSE: ANL). Read more.

Whether BoI chooses to grow organically or by acquisition, it is a quality stock and is expected to do well in the medium term.

Ryanair (LSE: RYA)
Since its launch in 1985, this low-cost airline has been giving the big players a run for their money, and aims to be Europe's largest airline within the next eight years. In only ten years, it has increased the number of passengers it carries each year from 0.7m to 11m - growth of over 1,570%!

Ryanair recently made a move on rival Buzz and announced that it would terminate flights to twelve European destinations once the takeover is complete. This left many Buzz customer fuming, which could lead to a class action lawsuit against Ryanair.

Michael O'Leary, an uncompromising Irishman who believes that fortune favours the brave, heads Ryanair. Nevertheless, competition is hotting up among low-cost airlines and Ryanair may not necessarily emerge the winner in its battle with Easyjet (LSE: EZJ) and others.

However, given that Ryanair's shares already trade on a fairly high earnings multiple, they're possibly fully priced at present.

Paddy Power (LSE: PAP)

Paddy Power (PP) is Ireland's largest bookmaker. Given that country's interest in horse racing, it comes as no surprise that PP's turnover increased by a whopping 46% last year. The company allows betting through its shops in Ireland (plus five in London) and by telephone, Internet, interactive TV and WAP mobile phones.

You may have seen the firm's risqué advertising: one advert featuring two pensioners on a pedestrian crossing ended up being the seventh most complained-about ad of 2001! However, the company would doubtless argue that any publicity is good publicity - its campaigns are certainly raising awareness of its brand in the UK.

Given recent good results from William Hill (LSE: WMH) and other UK bookmakers, Paddy Power is worth buying, if only for its defensive properties if the UK's economic slowdown continues.