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Risk in the banking market

  • 19-11-2008 4:15pm
    #1
    Baird
    Closed Accounts Posts: 260 ✭✭


    This is about as simple a graph as exists but it its extremely good.

    Green means risk (for that category) is fully discounted in the share price, yellow means risk is partially discounted and red means it’s not discounted at all.

    It was done by UBS in case anyone thinks i did it in MSPaint :D

    3025.jpg


Comments

  • #2
    rugbyman
    Registered Users, Registered Users 2 Posts: 1,785 ✭✭✭rugbyman


    Baird,
    two questions,

    does the graph show that the holders of Irish bank shares, be they Irish or Foreign,have factored in the downside of the market place into the share price,somewhat more accurately, or severely than the holders in other countries?

    Somewhere in these threads you have given your beliefs in the outcome of any govt intervention short of Nationalisation.

    No one else seems as logical as you appear to be.

    I have asked the question and got no answer from two who did respond, " In the event of the govt injecting capital, are the shares likely to RISE or FALL from the price immediately prior to that injection"

    Regards,Rugbyman


  • #3
    woodseb
    Registered Users, Registered Users 2 Posts: 877 ✭✭✭woodseb


    i think that some type of equity dilution is already priced in and the occurance of it will lead to a short term relief bounce as investors stop pricing in the chance that a bank goes completey tits up. Upside will be limited by onerous terms of any injection that will limited equity shareholder profits in the future


  • #4
    pocketdooz
    Registered Users, Registered Users 2 Posts: 1,559 ✭✭✭pocketdooz


    rugbyman wrote: »
    Baird,
    two questions,

    does the graph show that the holders of Irish bank shares, be they Irish or Foreign,have factored in the downside of the market place into the share price,somewhat more accurately, or severely than the holders in other countries?

    Somewhere in these threads you have given your beliefs in the outcome of any govt intervention short of Nationalisation.

    No one else seems as logical as you appear to be.

    I have asked the question and got no answer from two who did respond, " In the event of the govt injecting capital, are the shares likely to RISE or FALL from the price immediately prior to that injection"

    Regards,Rugbyman

    I responded - check the thread.

    They will fall. Further dilution of the shares outstanding will cause the shares to fall (after a possible brief rally cos of a "show of confidence" :rolleyes:)


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