AIB "Faces being Nationalised"

Idbatterim

AIB "Faces being Nationalised" according to an article in yesterdays SINDO and todays INDO, yet share prices in AIB are up 3% today. Isnt the fear of nationalisation exactly what caused boi shares to drop to 12c per share? So the reason AIB shares arent dropping is because investors dont reckon it will be nationalised, is that the case?

woodseb

there's a big difference between 'part nationalisation' and 'nationalised'

one is a government majority stake and the other is wiping out all equity ala anglo

don't read the indo for your finance research

Comordha

I think we're looking at a very thin line here. This one will test nerves over the next few months. Can't wait.

displaced dub

wouldn't wipe my large ass with the sindo or the indo

sbsquarepants

displaced dub wrote: »

wouldn't wipe my large ass with the sindo or the indo

Not sure how large your ass is but just get the larger, non tabloid version, problem solved:D

JTMan

There is more than the Indo saying this. JP Morgan today said that AIB will be nationalised as well.

The sums don't add up to 'majority nationalisation' they add up to nationalisation.

ranger4

Would be very concerned if FG-Labour were in power as most of irish banks would have been nationalised by now, I still believe Aib will escape been nationalised and delisted from exchange however gov will end up with 60-70% stake, will be an interesting few months ahead.

Bill2673

Idbatterim wrote: »

AIB "Faces being Nationalised" according to an article in yesterdays SINDO and todays INDO, yet share prices in AIB are up 3% today. Isnt the fear of nationalisation exactly what caused boi shares to drop to 12c per share? So the reason AIB shares arent dropping is because investors dont reckon it will be nationalised, is that the case?

Lets be clear that no large investor would pay any heed, even read the business column of the Sindo. Its not really a business column, more an entertainment/ gossip column for people with an interest in business. (And I guess for that sort of thing, they are good at what they do).

A newspaper could roll out an article on AIB "facing nationalisation" any day of the week, any week of the year. There is no news there.

Its not a Northern Rock situation where deposit holders are fleeing the bank and the govt could be forced to bail in overnight.

Its more like RBS, whereby the bank needs capital, a lot of that will probably come from the govt, so that the govt will end up owning a large stake of maybe somewhere between 50% and 80% (guesstimate.

Sikie

What happens if the government hasn't got/can't get the cash to shore up AIB and needs to call Europe there appears to be an infinite blackhole in Anglo and another one emerging in AIB

Bill2673

Sikie wrote: »

What happens if the government hasn't got/can't get the cash to shore up AIB and needs to call Europe there appears to be an infinite blackhole in Anglo and another one emerging in AIB

Its not an infinite black hole. Its a finite one but a very large finite one. Our govt hasn't got the cash and needs to borrow it.

Most likely what happens is that there is a step change in Ireland's national debt; it jumps from say €60bn to €100bn; (€25bn for Anglo, am guessing circa €15bn for the others).

So in others words, you me and every one else in the country has to pay this money back over the next XX number of years. Thats my guess. I'm not sure of the process if the ECB has to intervene, i.e. where Ireland can no longer source funding in international debt markets.

Sikie

Today's finite number is tomorrows we got it wrong is all the bad news rollup up yet!