Friday 23 June 2017

Record lows for AIB before it leaves ISEQ after 44 years

Today is last session for embattled bank before it moves its listings to the Enterprise Securities Market

Former employee Niall Murphy and Dave Johnstone, from the Campaign to restore Honesty & Integrity,
protesting outside AIB bankcentre during the EGM in May 2009
Former employee Niall Murphy and Dave Johnstone, from the Campaign to restore Honesty & Integrity, protesting outside AIB bankcentre during the EGM in May 2009
Laura Noonan

Laura Noonan

AIB looks set for an ignominious end to its 44-year term on the main Dublin stock exchange, after the bank touched new lows during its second-last session on the Iseq.

Today marks the almost-nationalised bank's last session on the main Iseq, with the listing shifting to the junior Enterprise Securities Market (ESM) from tomorrow.

The ESM has lower reporting requirements than the Iseq, but AIB last night said it would "absolutely" continue to engage extensively with shareholders.

A survey by the Irish Independent found that more than 10 investment houses across the UK and Ireland will continue to cover AIB, despite the "unusual" circumstances of an ESM listing.

Switch

The switch to the ESM was triggered on December 23, when the Government effectively took a 92pc stake in AIB. Listings on the New York and London stock exchanges will also be cancelled tonight.

AIB's shares touched a new low of 23.5c yesterday morning, some 40pc below their open on December 23 when the latest bailout plan was announced.

The 23.5c is also more than 38pc below the 37.93c a share ascribed to the Government's latest bailout in December. The shares recovered later in the day to close at 26.3c, down 1.5pc on the day.

Market sources said yesterday's falls were likely to have included a "technical" element, reflecting the fact that some investment funds aren't allowed to hold shares in companies that aren't listed on main indices.

Others cited concern about the volatile political situation in Ireland, pointing to falls in Bank of Ireland, which closed down 1.7pc, and Irish Life & Permanent (down 1.9pc).

When Anglo Irish Bank was nationalised and removed from the Iseq, it stopped holding regular results briefings with analysts and dramatically scaled back the level of financial information it disclosed. AIB's head of corporate services Alan Kelly yesterday said his bank had no plans to materially change its engagement with investors.

"Our intention is to be clear and transparent, we expect to continue to be active with all our shareholders," he said, adding that there were no plans to scale back AIB's investor relations team of three.

In Ireland, analysts at Goodbody's, Davy's, NCB and Dolmen last night confirmed they would continue covering AIB after its move to the ESM. The position of Bloxhams is unclear.

Across the water, analysts at several major UK stockbroking houses confirmed they would continue to cover AIB, some had not yet decided, and two will no longer cover it.

"I'd imagine we'll continue covering it unless there's full-blown nationalisation," said one analyst.

"We get asked about the Irish banks a lot, and what we learn from AIB about asset quality has knock-ons for UK banks because they have Irish assets too."

Others pointed to enduring international interest in AIB and Ireland as a forerunner for possible developments in Spain and Portugal.

"As a big house we usually only cover stocks listed on major exchanges so this is an unusual situation, but people really want to see if things are improving in Ireland," said one analyst.

Analysts also expect continued demand for information from those who hold billions of euro of AIB debt.

One analyst said he would no longer cover AIB because there's "nothing left", while another said she had stopped covering the bank in October and did not expect to resume.

Irish Independent

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