AIB shares surge by up to 46pc after buying spree
SHARES in AIB surged as much as 46pc yesterday as investors from the US followed Monday night's bullish trading on their own New York Stock Exchange with a buying spree in Dublin.
But market sources advised against "reading too much" into the dramatic share-price movement, with some suggesting "technical reasons" were behind the unexpected surge.
AIB was handed down a €13.3bn capital raising target by the Central Bank last week, a demand that is set to see the State's current 92pc stake in the bank raise to close to 100pc.
Against that backdrop, the surge in AIB's share price yesterday baffled many market participants in Dublin and London.
"If someone wanted to buy AIB, they'd go to the Government not the market," one source said. "It's hard to see what the game would be here."
Others suggested that investors could be buying AIB shares now in the hopes of getting a good deal in any future rights issue, where AIB could try to raise cash from existing investors on preferential terms.
The bank last night declined to comment on the prospect of an imminent rights issue.
Sources confirmed the buying had been done out of the US, where AIB's instruments have been heavily traded recently.