BoI surges 15pc on index upgrade
Bank of Ireland's shares soared almost 15pc yesterday, amid huge trading volumes, as fund managers added to their positions in the group ahead of its inclusion in a major international stock index.
BoI's massive capital-raising exercise resulted in Morgan Stanley Capital International (MSCI), the influential stock market index provider, upgrading the bank from its small cap index to its standard index from yesterday evening.
The bank, which raised a net €3.56bn, now has the fourth-largest capitalisation in the Irish market, at €4.3bn. Some €491m of the equity raised was used to buy back the State's right to acquire 334 million BoI shares in four years' time.
Kevin McConnell, head of research at Bloxham Stockbrokers, estimates that funds that track the MSCI Standard Index would have to acquire a total of about 140 million shares to reposition themselves.
That is the equivalent of almost 3pc of BoI shares in circulation.
Some 225 million shares in BoI changed hands yesterday, with a frantic closing auction accounting for the trading of 156 million. Shares ended the session up 14.6pc at 87c.
But market participants cautioned that the stock is likely to pull back over the next few days.