Should I sell AIB shares

Plentyofice

Hi, Hoping someone may have some good advice. Bought the shares at €1.20. Now at 34c. !! My question is should I just hang on a hope in a few years they'll get to some sort of sellable level or should I just jump ship now and sell at 34c. ? Will they eventually become an Anglo irish share ?

tHE vAGGABOND

its a hard choice...

Personally I would hold onto them, lock them away, and hope the price rebounds over the next 20 years or something? While the price is not coming back anytime soon, long [LONG] term it could very well do.

But I would totally understand someone cutting their losses and getting out now.

TheCostumeShop.ie: Ronan

I think the way you should be looking at it is if you had the cash now instead of the shares would you be using it to buy them now?? If not, cut your losses and put the money to good use else where.

kmick

I think within 12 months they will be worth 0c. AIB is sinking fast.

Toots

Moved to Investments & Markets

DC09

Plentyofice wrote: »

Hi, Hoping someone may have some good advice. Bought the shares at €1.20. Now at 34c. !! My question is should I just hang on a hope in a few years they'll get to some sort of sellable level or should I just jump ship now and sell at 34c. ? Will they eventually become an Anglo irish share ?

It depends how much worth you bought and if you can afford to let it drop to 0c.
If you don't need the money urgently and are willing, it may be worth taking the risk. IMO, you could potenitally gain 60-80% if things improve even slightly in the next 3 years.
Two years ago I bought BOI and AIB shares (not many, I knew I was taking a risk) both at between 40 and 50 cent.
I eventually sold to make 400/500% returns.
Though you bought them at slightly higher levels, its possible, if you are willing to take the risk.

radioactiveman

I don't know the details of this but:
- the government probably won't nationalise the bank but it's still very possible if they own over 92% of it after the rights issue, possibly 95% now that AIB can't sell their UK business.

- Irish banks have about 140 billion euros of mortgages, a lot of them with AIB and BOI.
Again I don't know about this but is this not a huge risk? Interest rates are at an all time low. What happens when they rise back to normal levels? If only 1% of people default on their mortgages this could be 1 or 2 billion per bank.
Someone correct me if I'm wrong. Their liabilities seem to be enormous. I can't get over how bananas they went.

- What happens if the markets are not convinced by the budget and/or do not believe Ireland will have enough growth to balance our deficit over the next few years? i.e. what happens to AIB if the IMF come in?
I can't help thinking that if the markets are not convinced now, they're not going to be.

There's an awful lot of risk involved in holding the shares. If AIB makes it through somehow it really will be the great escape and the shares could rocket in percentage terms from their current level (years from now) - but it's such an enormous If

poodles

Personally, I'd sell them and buy a penny stock with a high risk / high reward.

Let's face it, if you bough AIB shares to begin with, you're ripe for the high risk / high reward category.

Mr Cawley

poodles wrote: »

Personally, I'd sell them and buy a penny stock with a high risk / high reward.

Let's face it, if you bough AIB shares to begin with, you're ripe for the high risk / high reward category.

Agreed, give yourself a chance man, bank with future troubles mentioned above OR
an oiler. No contest.

The Pontiac

Mr Cawley wrote: »

Agreed, give yourself a chance man, bank with future troubles mentioned above OR
an oiler. No contest.

It's a valid point. Some investors wouldn't touch oilers with a barge pole, as the high risk, high reward scenario doesn't suit them and that's fine. But if you're investing in BIR or AIB, then the same applies. It's clearly high risk, and I'm failing miserably to see any sort of potential high return here. Maybe it's possible, but there are so many factors not yet clear even the CEO of the Central Bank doesn't know the answers to some very important questions. It's a speculative buy to say the very least.

At least with oilers, there's a chance of significantly increasing your investment.

Take Ithaca Energy for instance, a medium risk (my risk grading) investment which could give a very good return over the next year or two and beyond. Ithaca have $193m cash in the bank, a debt facility of $140m if they need it, are currently producing 5000bopd and other great prospects on the cards for 2011 (Athena etc). The management are excellent and there's zero politcial risk in the North Sea. If you were speculating on rising oil prices in the next few years (like many analysts are) then IAE would be a good investment.

Encore Oil is another company worth looking at, even if it has risen nearly 600% in the last 12 months.

RPS Energy released a Competent Person's Report (CPR) on Xcite Energy in September 2009. The report concluded "the Chance of Commerciality is at this time 70%" In March of this year the share price was still at 40p. It's £2.80 today and commerciality has yet to be confirmed. It has a real chance of hitting £5+ before the end of the year and a real possibility of hitting £8+ over the next few years. Was BIR or AIB ever close to a 70% chance of returning to high growth with the possibility of returns of 700%+ to the investor? No, in my opinion.

If real speculative buys are of interest - Gold Oil, Max Petroleum, Aminex and Serica Energy might take your fancy.

People are buying/holding Irish bank shares simply because they've dropped so much in value and they think the only way is up now. This should never be a reason to buy or hold unless you've actually researched the stock and came to this conclusion. The same applies to a stock that has risen significantly eg. I'm 'considering' buying Encore Oil at the moment.

Smcgie

hogwort wrote: »

:eek: GET OUT NOW!!!!!!!!!!!!!!!!!!!!!!!!!!

Very helpful information with an excellent source. If I owned any AIB stock I'd sell straight away. Thanks :rolleyes:

Raskolnikov

There is a rumour that AIB are going to be 100% nationalised tomorrow, although does it really matter if it's 100% or 97% like is currently proposed.

OfflerCrocGod

Raskolnikov wrote: »

There is a rumour that AIB are going to be 100% nationalised tomorrow, although does it really matter if it's 100% or 97% like is currently proposed.

Actually it does make a difference but yes I'd say AIB will be wiped on Monday. I'm more interested in how BoI will be handled, could be a great buying opportunity for the long term.

strmin

OfflerCrocGod wrote: »

I'm more interested in how BoI will be handled, could be a great buying opportunity for the long term.

I can't even count how many people said the same about AIB. Time will come for BOI as well.

ranger4

OfflerCrocGod wrote: »

Actually it does make a difference but yes I'd say AIB will be wiped on Monday. I'm more interested in how BoI will be handled, could be a great buying opportunity for the long term.

Possible condition of access imf-eu contingency fund could be for gov to be forced to over capitalise bkir by possibly increasing its stake by injecting more capital and raise bkirs cor tier 1 to @10%, Would imagine such an increase of gov stake is already priced in and with anglo-inw-ebs set to disapear bkir will recover in time.

OfflerCrocGod

ranger4 wrote: »

Possible condition of access imf-eu contingency fund could be for gov to be forced to over capitalise bkir by possibly increasing its stake by injecting more capital and raise bkirs cor tier 1 to @10%, Would imagine such an increase of gov stake is already priced in and with anglo-inw-ebs set to disapear bkir will recover in time.

Pretty much my thinking and on top of that if all the losses don't materialize there's also some provisions to be written back. I really wish the government would get a move on though, they are stretching it out for all it's worth. I'd say 12-14% is more likely.

Mr Cawley

OP hope you listened to posts 8-12, the people who know a bit more than the layman.

ranger4

OfflerCrocGod wrote: »

Pretty much my thinking and on top of that if all the losses don't materialize there's also some provisions to be written back. I really wish the government would get a move on though, they are stretching it out for all it's worth. I'd say 12-14% is more likely.

12% it is, I beleive AIB will escape Delisting from Exchange although massive gov stake looks likely for aib, Bkir going to fly next week.

Raskolnikov

Ranger, I have to say, I admire your gusto. How one can stay so positive and bullish in the face of massive losses and such bearish pessimism is beyond me. Having said that, all this talk about capital ratio's and dilution is really quite pointless when you consider that Brian Lenihan (who effectively owns the banks) and Alan Dukes (who runs one bank) have come out and said that they will be nationalised.

Alan Dukes "Most, if not all, of Ireland's six banks to end up in state hands"

Brian Lenihan "There is currently a residual shareholding in the banks by the state. This may change"

If you want to ignore what these people say and keep looking at stuff that's not even relevant anymore, then so be it.

ranger4

Raskolnikov wrote: »

Ranger, I have to say, I admire your gusto. How one can stay so positive and bullish in the face of massive losses and such bearish pessimism is beyond me. Having said that, all this talk about capital ratio's and dilution is really quite pointless when you consider that Brian Lenihan (who effectively owns the banks) and Alan Dukes (who runs one bank) have come out and said that they will be nationalised.

Alan Dukes "Most, if not all, of Ireland's six banks to end up in state hands"

Brian Lenihan "There is currently a residual shareholding in the banks by the state. This may change"

If you want to ignore what these people say and keep looking at stuff that's not even relevant anymore, then so be it.

Yes those quotes have been made along with Lenihan wanting to use contingency fund for banks as needed and IFSS bruton quoted as saying irish government does not intend to totaly nationalise irish banking sector, My humble belief is that BKIR will escape outright nationalisation and delisting however gov looks set to increase its stake to possibly 70-75% which would still offer potential SP upside from present sp which presently has at least 90% gov stake to delisting priced in.

neil.p.b

I'm not holding any BOI but i agree with Ranger. I'd be very surprised to see if fully nationalised. Markets/Brokers/Papers have all come to the same prediction that it will just end majority owned by the government circa 75%.

Brian Lenihan (Alan Dukes is irrelevant) hasn't come out and they said they'd be nationalised. He said it may happen, and did not specify if he meant to all the irish banks or specific ones. He obviously doesn't mean all of them as IPM isn't going to be. It also is relevant about capital ratios as raising funds to get to those levels would nationalise all the banks, apart from BOI.

Samba

Anyone tempted to go short on AIB?

If they do escape de-listing would it be realistic to see a 25-30% drop in value and if they also are de-listed what type of fall if any can you envisage before it's pulled?

I can't see a whole lot of risk on a short position in light of current events and news