Thursday 27 April 2017

Trading still well above average in London

Joe Brennan

London trading in Bank of Ireland was well above average for the second trading day as yesterday marked the last day for shareholders to qualify to participate in the bank's "priced to go" €1.7bn rights issue.

Some 5.6 million shares in the bank changed hands on the London Stock Exchange, more than 40pc of the six-month average, with more than six million traded on Friday.

However, volumes were more subdued in Dublin, with 2.6 million BoI shares shifting, compared to the six-month average of 3.7 million.

Shares in the bank dropped more than 5pc on both sides of the Irish Sea to €1.455, as the markets got their first chance to react to the rights issue pricing.

The price of 55c, offering shareholders a deal to subscribe for three shares for every one they currently hold, was at the lower end of the discount range it had previously indicated.

"After the difficulties in the market recently, the rights price comes at the high end of the indicative discount range of 38pc to 42pc of the TERP (theoretical ex-rights price), pricing the deal to go," said Kevin McConnell, head of research at Bloxham Stockbrokers. TERP is set at 94c per share. Dealers said they expected the stock to trade down towards the TERP price over the coming weeks, as the deal nears completion.

Goodbody Stockbrokers analyst Eamonn Hughes said he expected BoI's stock to be volatile from Thursday as investors start trading their rights to participate. BoI is to hold an extraordinary general meeting tomorrow on the deal.

Irish Independent

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