The AIB Discussion Thread

Compak · 06-03-2009 11:13AM

DJDC wrote: »

What this thread really shows is the stupidity of the Irish public when it comes to the markets. Myself and others have been telling people not to touch this toxic waste for months.The lower the Irish banks go, the more of a bargain they become to these gamblers. The thought "Maybe we should ask why the stock is so low?" never even enters their little minds.

A lot of people have lost thousands in the last few weeks trying to gamble on a share price bounce in AIB and BOI. Hopefully, as they see their hard earned savings disappear into thin air, they will learn important life lessons. Although as recent posts show, they keep coming like lambs to the slaughter.

Buffet should hire you as an advisor. would already have saved him quarter of a billion.
Then the fools like
Desmond,
JP Morgan,
State Street Bank,
Bank of New York ,
Fidelity Management Trust,

all showing their stupidity with recent buying.

Its not over yet sir and obviously now they are a much better buy than a euro plus.
Nationalisation is a large risk but its a chance one must weigh up. for many who have bought recently for long hols 1yr, 3yrs, 5yrs,10yrs you coming in blowing your trumpet may be a bit premature.

Then again perhaps nationalisation will occur this weekend and you will have got it spot on once again.

You have made your decision though why do you feel the need to judge others?

ixus · 06-03-2009 11:27AM

Compak, a lot of those companies have lost a shed load of money in the last 18 months. Also, I would be pretty certain that their investments would be a tiny percentage of their overall portfolio unlike the retail investor who is using up their savings or borrowing.

There is a huge difference in what the big boys are doing. Finally, if they were all piling in, there's no way the share price would be so low. They are nothing more than lotto tickets even for the big boys.

Compak · 06-03-2009 11:37AM

ixus buffets investment was big enough to earn a special mention is his letter to the shareholders

Second while these investment are small for a company for the individula who bough them it would not be so small and millions is millions and would not be pleasant explaining.

Third in these times of scrutiny one cannot take a gamble, buyers have been ordered away from all risky stock so a proper argument would have to be made for buying.
I heard in AIBs market buying they have place strict restrictions now where punts would of been allowed before

Third in the last week 20% of the company has been traded. No retail investor can match that level of buying so someboby/institue has been cleaning up.

Fourth a definate pattern in sp has been produced for last while now which points to manipuation keeping price down,

Fifth in last week 20% of company has been sold people could know something and nationalisation by ,monday morning

One must DYOR

Diarmuid · 06-03-2009 01:07PM

Bearcat wrote: »

I have 90,000 shares in aib yes 90k and they are as valuable now as the 90k sheaths of bog roll in my jacks. I have basically written them off, and my kids can benefit from them if they ever return which I doubt.

Sorry to hear about your losses, lots of people in similar positions

Bearcat wrote: »

I am very very confused though. The govt (appears) to stand idly by but there is masssive trading going on.

It's nothing to do with them and should have nothing to do with them. The market believes that AIB is worth next to nothing, c'est la vie. It has happened to loads of companies before and will happen again.

Bearcat wrote: »

Can some one just say what they think is going on and as a guy in the financial game said to me a whole generation is wiped out over this...unreal stuff.

I think it will be a good lesson for a lot of people on why diversification is very important. If you have put 90k into something like a total world stock, you'd be down but by 50%, not almost wiped out. Not much consolation to you, I know.

heno55 · 06-03-2009 02:27PM

hi all,how will the low sp affect the banks ability to do buisness,can they just ignore their sp and get on with the day to day running of their buisness i mean if they (all banks) are profitable can they stave off nationalisation

JOHNPT · 06-03-2009 02:34PM

Along similar lines last question.

If bank still making money(although it will have alot bad debts) can it keep operating and avoid being nationailsed if the share price is so depressed.

Compak · 06-03-2009 03:16PM

heno55 wrote: »

hi all,how will the low sp affect the banks ability to do buisness,can they just ignore their sp and get on with the day to day running of their buisness i mean if they (all banks) are profitable can they stave off nationalisation

not fully as sp reflects CDS which has gone through roof tgough they may not need to use this.

However if deposits stay in and bad loans dont materialise gov cant nationailise on sp alone

woodseb · 06-03-2009 04:45PM

JOHNPT wrote: »

Along similar lines last question.

If bank still making money(although it will have alot bad debts) can it keep operating and avoid being nationailsed if the share price is so depressed.

a bank is only as strong as its capital, a penny share price seriously restricts its ability to re capitalise the balance sheet to any meaningful degree without massively diluting the share base.

ie think about how many new shares need to be issued to raise 3bln when the share price in 0.30 compared to if the share price is 6.00

-mr.x- · 06-03-2009 05:27PM

so are you saying theres no point in injecting 3BN into AIB , that they would be better of with Nationalisation.?

Possibly the bad bank solution may be more of an option at this time?:rolleyes:

woodseb · 06-03-2009 05:33PM

-mr.x- wrote: »

so are you saying theres no point in injecting 3BN into AIB , that they would be better of with Nationalisation.?

nope, merely pointing out how a low share price affects its ability to do business in the long term

Compak · 06-03-2009 05:50PM

only if it needs to raise capital:rolleyes:

woodseb · 07-03-2009 12:29AM

Compak wrote: »

only if it needs to raise capital:rolleyes:

what's your point? are you saying AIB doesn't need to raise capital

Blackjack · 07-03-2009 12:53AM

woodseb wrote: »

what's your point? are you saying AIB doesn't need to raise capital

nowhere near as much as the media would have you believe is required, if required at all.

Overdone, overdone, overdone.

-mr.x- · 07-03-2009 03:12AM

How can you say the banks dont need much capital?

the banks have given use a clear est of what they expect to write off over the next couple of years(its in the billions).
the top economists say 3.5Bn is no where near enough.
the banks are in a terrible situation
where have you been the last 6 mounths

Compak · 07-03-2009 10:55AM

woodseb wrote: »

what's your point? are you saying AIB doesn't need to raise capital

I used the roll eyes to imply sarcasm! sheehy says it dont need capital. One thing is for sure though it does not need these mad figure being branded about like another 3.5billion

daveirl · 07-03-2009 12:19PM

This post has been deleted.

Compak · 07-03-2009 02:49PM

daveirl wrote: »

This post has been deleted.

1. Desmond bought in drop in Jan when hit 29c so dont make up stuff about 80% drops.
2. Desmond buys CFDs do not need to be announced
3. T. Rowe announced 5% buy on behalf of american Institutes week and a half ago.
4. last friday week 105 million shares traded. People said due to MSCI index deletion. MSCI contain over 30million AIB shares so thats 70million traded.
5. When deletion from an index occurs there is a few week/months notice to allow proper disposal, they only get delisted on set day not necessarily sold.
6. I love it when people cry fear. Just makes me richer

Anything else you would like to add?

Compak · 07-03-2009 02:55PM

Remember folks DYOR as otherwise people spread false information to strike fear.

Now this buying announcement was before the recent 20% of company traded

ALLIED IRISH BANKS PLC

2. Reason for the notification (please tick the appropriate box or boxes):
[X] an acquisition or disposal of voting rights
[ ] an acquisition or disposal of financial instruments which may result in the acquisition of shares already issued to which voting rights are attached
[ ] an event changing the breakdown of voting rights
3. Full name of person(s) subject to the notification obligation:
T. ROWE PRICE ASSOCIATES, INC.
4. Full name of shareholder(s) (if different from 3.):
Ordinary Shares:
J.P. Morgan Chase: 24,829,496
State Street Bank & Trust Co.: 16,129,900
Bank of New York Mellon: 1,225,275
Fidelity Management Trust Co.: 369,139
American Depositary Receipts:
State Street Bank & Trust Co.: 845,400
Bank of New York Mellon: 317,100
J.P. Morgan Chase: 220,800
Northern Trust Company: 94,100
5. Date of the transaction and date on which the threshold is crossed or reached:
26 February 2009
6. Date on which issuer notified; 2 March 2009
7. Threshold(s) that is/are crossed or reached: 5%
8. Notified details:

pocketdooz · 07-03-2009 03:01PM

Compak - you've got a lot to learn. It might pay to be more polite to people like Dave and you could actually learn something.

Compak · 07-03-2009 03:17PM

Yeah my apologies, only made near 400% out of the last AIB rise. Have an average nice company gain form last year but that was from being open to learning and selling when good arguments were made after I did my own research

Glad you have sufficient knowlege of me to know I have a lot to learn. Was it my pot of recent holdings that put you off showing uh oh we cant say institutes are selling must use another lie?

Look I dont want to sound like a prat but it sounds on this forum like a bunch of schoolgirls singing the nationalisation song.

If people can give a genuine reason for nationalisation (not zero as fair value applies) I will genuinely listen and I will fully respect and weigh up the argument. However there is a possey just shouting zero. Brilliant!

Dave made points but as I pointed out they are false/refutable.

Not to be smart but it took the long holders of AIB to bring up the CDS issue. Now obviously people who dont hold are not to be expected to know as much of the intricacies as those who do but certain people have no respect for those who buy.

You dont know that the full N is coming but ye keep stating it.

Why can we not just let people decide and see who is right.

Have people a genuine reason that I should examin. I would truly be grateful for it.

We are arguing about who will win the league after four games have been played

daveirl · 07-03-2009 05:15PM

This post has been deleted.

Compak · 07-03-2009 05:37PM

No Desmond did not get all at 29c. Like you suggest he was responsible for large rally. However to lose 80% like you suggest his sp average would of been 170c the very top of the rally???????

Numbers are from the ISE. 54/55million traded in normal hrs 30 million after hours
LSE 11 million traded.
USA If i remember about 3 million as ADRs

cant remember exact but toal was over 100million.

Recent volumes have been confirmed to me by sources in aIB who told me they have been watching it with interest.

Im glad you do it for a living and I hope you are successful. Im sorry if I dont respect that much but only started making money last year after firing my broker.

I sold AIB on rally as though I believe in them I do also realise a rally like that in a bear market is unsustainable. However Im back in and dont mind admitting currently at a loss.

T. Rowe are the holders on behalf of JP Morgan of 2.5%. Should you not be aware of such movements?

Look I dont want to argue. I normally post on other boards and not hereso you have prob given great advice to people and helped them which I would be unaware off. Considering most people in the trade have advised me to get out of these shares I obviously cant expect you to be different.
I obviously dont have the same qualifications so all I can say is I have a strong gut feeling for these and try to stay on top of things as much as possible.

I appreciate your replies to my post.

Can I ask you if you accept the high volumes I have seen what your opinion is of such movement.

Also if Im giving impression that people should not diversify dont get me wrong Im not. My main area are the biotechs as my qualifications are in this and it helps me picking out good products in development so hold some and sell others on takeovers or clinical trial results.

I also hold energy stocks and what I call the staples big businesses that do well in a recession

Compak · 07-03-2009 05:49PM

Oh dave.

Mid Feb, AIbs and BOI's CDs jumped big time to over 600. Have you any idea what caused this rapid steep jump?

daveirl · 07-03-2009 06:17PM

This post has been deleted.

daveirl · 07-03-2009 06:22PM

This post has been deleted.

Compak · 07-03-2009 06:40PM

Thanks

Figured as much. Half hoped they were based on the false bank liablity figure of 9.5x GDP that was being spread.

If nationalisation occurs however this problemw wont go away as the gov backing would be still of low ability and would prob rise like Anglos did since nationalisation.

-mr.x- · 07-03-2009 09:46PM

hope the gov go for the bad bank (anglo).
any opinions?

Mikel · 07-03-2009 11:03PM

-mr.x- wrote: »

hope the gov go for the bad bank (anglo).
any opinions?

It depends what is done elsewhere.

The words 'bad bank' get thrown around a lot these days but no one knows for sure what it would entail, and it's the idea the media are latching on to so it gets a lot of airing.

The most likely scenario is the Gov will wait and see what the UK and US do in this regard first.
Let them come up with the template and see what criticisms are made of it, and then try to come up with something workable.
The last time they tried something innovative (the guarantee) it blew up in their faces.

I did read though the Peter Bacon was commissioned to conduct a feasibility study on the issue

Hanley · 08-03-2009 01:42AM

Does a bad bank not have implications for the sector as a whole tho?

If the gov were to go to AIB and buy their impaired loans off them, and AIB were to act in good faith (when has that ever happened tho?) and disclosed the true extent of the ones they forsee to be potential bad debts, we'd probably see a much higher figure than they're saying now.

If AIB's is for instance say 12-15%, and lets be real, it could potentially be a lot higher, it's reasonable to assume the other banks and building socs. would be in a similar position... I would envisage this would cause massive write downs across the sector and turn a bad situation worse. I would guess the market would react quite negatively and would probably drive down prices even more.

And that's without the practical issues of trying to value the amount the loans are impaired by, how much to pay for them, the potential tax payer liability and the negative impact on the banks capital and p&l figures.

In theory, a bad bank is nice, but there could be A LOT of bad information and open ended liabilities resulting from it. In my opinion of course!

Mikel · 08-03-2009 07:03PM

Hanley wrote: »

If the gov were to go to AIB and buy their impaired loans off them, and AIB were to act in good faith (when has that ever happened tho?) and disclosed the true extent of the ones they forsee to be potential bad debts, we'd probably see a much higher figure than they're saying now

You're relying on the Gov to come up with an intelligent well thought out plan which is workable, and on the banks not ballsing it up.

If AIB's is for instance say 12-15%, and lets be real, it could potentially be a lot higher, it's reasonable to assume the other banks and building socs. would be in a similar position... I would envisage this would cause massive write downs across the sector and turn a bad situation worse. I would guess the market would react quite negatively and would probably drive down prices even more.

I think you would need a Phd in game theory to figure out what everyone's incentives would be

And that's without the practical issues of trying to value the amount the loans are impaired by, how much to pay for them, the potential tax payer liability and the negative impact on the banks capital and p&l figures.

The practicalities would be a nightmare alright, what is impaired and what are they worth for a start.....
Then there's trying to get them repaid.
What if you owe 50m and you know that
1. Your debt is owed to the 'bad bank', so your debt is 'toxic' so probably already considered written off.
2. The directors of the bank are not repaying their own loans, so why should you?

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