Saturday 19 August 2017

AIB shares hit all-time low on small-firm index

Laura Noonan

Laura Noonan

SHARES in AIB collapsed to an all-time low of 22c last night as the embattled bank rounded off its first four weeks' trading on the Iseq's junior market.

The fall, which left AIB down more than 18pc on the day's trading, put the bank's value at just over €386m -- a tiny fraction of the €7.2bn the taxpayer has poured into the bank.

Market sources said there was no particular reason for yesterday's fall, pointing to stock's persistent weakness in recent months and the relatively low levels of trading.

Analysis from the Irish Independent showed that the volume of AIB shares changing hands fell just 5pc in the bank's first four weeks on the Enterprise Securities Market (ESM), which caters for smaller firms.

An average of 1.6 million shares a day changed hands over the last four weeks, against an average of 1.7 million shares a day in the bank's last four weeks on the main Iseq index.

This level of trading is not far off the two million a day that changed hands in the four weeks to February 23, 2010.

But market sources pointed out that while the volume of shares changing hands had largely held up over the last year, the value of the deals had collapsed.

In early 2010, AIB's shares were trading around €1.10, so daily volume of two million meant shares worth €2.2m were trading every day.

Over the last four weeks AIB's share price has averaged just 28c, so the 1.6 million shares were worth less than €448,000.

Reduction

Traders are expecting a significant reduction in AIB trading later in the year when the Government's share in the bank formally moves from 49.9pc to more than 90pc.

The move is expected to take place in early April, when AIB's sale of its stake in Poland's Bank Zachodni is completed.

"There's a chance the State's stake could go as high as 98pc because the Government will be converting preference shares [to ordinary shares] as well," said one source.

"When that happens, it's hard to see how there would be much trading left at all."

AIB has vowed it will be business as usual despite its transition to the ESM, which has lower reporting requirements.

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