Investing in AIB and BOI

Hollister11

Hi, what are people's opinions on buying into BOI now, and AIB when the goverment release there shares into the market.

I'm 19, and I would like to invest around 1K in each.

I think BOI are steady enough at the moment and are a good long term investment.

AIB as we all know are overvalued even at 4C. When the goverment releases more, and the value decreases to 1/2C I would like to buy I'm.

OttoPilot

Personally, I'm bearish on those banks in the long term. I'm only 22 so I don't have a lot of insider knowledge but from people I know in the banking industry, they are fairly pessimistic about how things are currently.

I think we are in for a shake up in the banking market in the long term. Look at another thread on this forum about linkedfinance. That's a peer to peer lending system which could eat into banks profitability in future. What if that becomes the norm for savers in future? I also think payments will go mobile and managing your money through investments will become more personalised and easier to do. Long term, the current banking model will not sustain. People are already taking on the risks of banks without the rewards of profitable lending so I don't see why this won't change.

It may be that existing banks are the ones who adapt to consumer needs and become the "middle men", but if it is, it won't be Irish ones. I don't think they have the capital, the talent or the vision to adapt to a changing world.

They both have too many tracker mortgages on their books imo. Even apart from that they are both bottom of the barrel appeal wise.

All they have "going" for them is a past high share price that some people think somehow ensures a future rise.

For longterm, safe investment go with GlanBia, Ryanair or PaddyPower imo

Spanish Eyes

Does 33% CGT not put you all off re any gain on selling? Just wondered. I know you can offset gains against losses, but who wants to lose!!

Dividends (when they are paid!) are subject to tax aswell depending on your tax rate though I suppose.

Anyway. Just throwing it out there.

An Post tax free or Prize Bonds for me. Hassle free and guaranteed.

But investing in shares is a hobby for many, with the hope of gains, I understand that.

glued

I'd avoid banks for the medium term IMO. Even in the long haul you might not get a decent payout in 10+ years. There is definitely going to be major restructuring of banking laws coming in the near future which could greatly impact share price. I'd also avoid IT companies whom have massively overinflated net assets IMO.

Brussels Sprout

I don't understand people's obsession with investing in AIB and BOI. There are 4 threads about these two companies on the first two pages of this forum alone.

Is the logic that they had huge share prices back in 2008 and that that is where they'll naturally end up again or what?

There's a whole world of companies out there to invest in not to mention all of the other financial instruments.

OP if you're looking for a steady long term investment then it's probably best to diversify a bit. If you're limited in how many different companies you can buy then you should perhaps consider one of the many ETFs that track any of the major indices or specific asset classes.

Spanish Eyes

Spanish Eyes wrote: »

Does 33% CGT not put you all off re any gain on selling? Just wondered. I know you can offset gains against losses, but who wants to lose!!..........

33% CGT is fair enough imo, I'm paying more than that in income tax all in.
Also from a trading as a hobby point of view there is the small amount exempt from CGT.

Also of course, trading your pension is exempt from CGT

CIARAN_BOYLE

Spanish Eyes wrote: »

Does 33% CGT not put you all off re any gain on selling? Just wondered. I know you can offset gains against losses, but who wants to lose!!

Less than DIRT on deposits

Spanish Eyes wrote: »

An Post tax free

Poor returns

Spanish Eyes wrote: »

or Prize Bonds for me. Hassle free and guaranteed.

zero guaranteed returns

Spanish Eyes

CIARAN_BOYLE wrote: »

Less than DIRT on deposits



Poor returns


zero guaranteed returns

That quote was in relation to Prize Bonds. I have a healthy amount there, and have won handsomely over the years, not the mega prizes but I have gained more than interest in the bank for sure.

Not so good on the An Post thing, but have put an amount in the ten year Solidarity Bond.

I have 10k floating around that is just sitting there for ages. But I have looked (briefly) at the returns for shares, and is it worth the hassle?

Maybe if I got into it, and was not worried about losing the 10k I could become a gambler!

I dunno. Seems like a lot of commission to the brokers for me. But I don't know much about share investing hand on heart here.

Amirani

Both upgraded by Fitch today.

Hollister11

Amirani wrote: »

Both upgraded by Fitch today.

What does that mean ?

Amirani

Hollister11 wrote: »

What does that mean ?

That Fitch thinks that they're more creditworthy and that they're more likely to be able to pay back investors.

Hollister11

Amirani wrote: »

That Fitch thinks that they're more creditworthy and that they're more likely to be able to pay back investors.

So do you think that will make them a better or worse investment.

Amirani

Hollister11 wrote: »

So do you think that will make them a better or worse investment.

Well, a prominent credit rating agency now thinks they're a better investment than they were previously. It is just an opinion on creditworthiness, it's not a buy recommendation. It certainly doesn't make them a worse investment.

Hollister11

Amirani wrote: »

Well, a prominent credit rating agency now thinks they're a better investment than they were previously. It is just an opinion on creditworthiness, it's not a buy recommendation. It certainly doesn't make them a worse investment.

I have been watching AIB for around a year, I think if the price drops a little more i might invest 1k.

fits

You'd be mad to buy before the shares are consolidated!

Amirani

fits wrote: »

You'd be mad to buy before the shares are consolidated!

100%

Hollister11

fits wrote: »

You'd be mad to buy before the shares are consolidated!

And when they consolidate, do you expect the shares to fall even more.

zl1whqvjs75cdy

Hollister11 wrote: »

And when they consolidate, do you expect the shares to fall even more.

Noonan said as much earlier this year. Think he mentioned the price is 25 % over the actual market value. Definitely would stay away for now.

broker080

Very simple anything you buy in AIB before the refloat will bear no resemblance to the AIB shares that the government plans to list. PTSB shares are a good example if you want to see the likely outcome.

OttoPilot

The price of shares will change but the value of your holding won't change due to a consolidation.

What you have to worry about is the government refloating their HUGE stockpile of shares. Econ 101: when supply increases and demand is changed, price falls.

At the moment, there are very few shares floating publicly. Winner's curse theory says that the people currently holding (and therefore providing "market price" for the shares) are the one's most likely to overvalue. The overvaluation is being exacerbated by the small float issue.

Limestone1

http://group.aib.ie/content/dam/aib/group/Docs/Press%20Releases/2015/aib-approval-of-capital-reorganisation-measures.pdf


From this the consolidation will be complete by tomorrow morning.

Hollister11

Why is the share price 9.90 ATM ?

OttoPilot

Divide by 250 to get it in terms of the old price, so 9.90/250 = 4 cent roughly

popa smurf

This is one company that needs a name change badly the whole brand has too much bad history

Amirani

popa smurf wrote: »

This is one company that needs a name change badly the whole brand has too much bad history

Wouldn't imagine that's on the cards.

Azrel

My heart skipped a beat when I logged into my brokerage and saw AIB shares -100% overnight. All your money is gone, thank you, have a nice day! Considering when I logged in I was expecting my 4cent shares to be worth nearly €10 a piece haha. Has the consolidation been completed for everyone with online accounts? Was it as simple as dividing your amount by 250?

Will be very interesting to see where the shares go after 2016 IPO. Despite all the criticism it is a profitable company (€1.1 billion in 2014).