AIB -19%
BOI - 18%
Anglo - 37%
Irlife &P -32%
I kid you not
What on earth is happening.
Murt
Disclosure: I have shares in AIB directly and through the ISEQ ETF in all the other banks indirectly.17. A person who produces or disseminates recommendations shall -
(a) take reasonable care to ensure that the recommendations are fairly presented, and
(b) disclose any interests in or conflicts of interest concerning the financial instruments and issuer to which the recommendation relates.
Disclosure: I have shares in AIB directly and through the ISEQ ETF in all the other banks indirectly.
Last week, Irish Life and Permanent was valued at the net value of the Life Insurance company on its own. In other words, you were getting to own permanent tsb for free. This makes no sense to me.
It's clear that the profitability of Irish banks is going to be severely affected by the economic crisis. In particular, the banks will have bad debts arising from their property loans.
But the prices seem to assume things to be far worse than they actually are. It assumes that banks will lose a huge part of their assets due to bad debts and that they won't make profits again for many years. For that reason, I believe that bank shares are good value. Mind you, I did believe that six months ago and have lost around 50% of the money I invested then.
AIB, for example, derives its profits from Ireland, Poland, the UK and America. That is reasonably diversified.
Last week, Irish Life and Permanent was valued at the net value of the Life Insurance company on its own. In other words, you were getting to own permanent tsb for free. This makes no sense to me.
Of course, investing in shares is risky. There might be an announcement tomorrow that one of our big banks is in difficulty and that the government is not going to rescue it. The other banks may lose heavily because they have lent to that bank. But at these prices, the potential reward well outweighs the risk.
Brendan
Life insurance companies were buyers of toxic securities and funds stocked with toxic securities which are impossible to value, so the book value of such companies is meaningless in the conventional sense.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?