What's going on with AIB & BOI bank shares?

[MsAnneThrope]

Just a couple of months ago they were being described as "junk". They're losing money, have massive debts, more and more people struggling to repay mortgages/loans/credit cards, economy still screwed, and NAMA isn't a done deal yet.

Yet yesterday they were up over 20%, today at time of writing AIB up over 6% and BOI over 13%. Where's the logic and confidence behind these 'rallies'?

I know they're far off their 2007 peaks but who is making a killing on these shares at the moment and why are they rising like they are?

I just don't get it

[libertarian-right]

Dead cat bounce. This cat has quite the reflexes

[goosebump]

I just don't get it

Nobody expects you to understand these things, so don't worry about it.

BOI shares are up because they are currently buying back corporate debt, and AIB are getting a bit of traction in the slipstream.

When your shares are valued at around €1 in a market with relatively minuscule capitalisation, 20% moves are not uncommon, and have no particular significance up or down.

[cyberianpan]

You can't discuss share prices here

This is as the Commissariat of Financial Regulation [SIZE=1](aka IFSRA, aka the Central Bank, aka the Financial Regulator , aka Whatever New name it gives itself to pretend past disgraces weren't it's fault)[/SIZE] has passed a law in Ireland banning discussion of share prices unless strict rules are adhered to.

Here's the link to the relevant statue - personally I disagree with this censorship - but the Commissar will jail or fine you if you don't play ball.

cYp

[BodyofEvidence]

Anyhow, to answer the question, perhaps the manic desperation to not wipe out the float by Mr Lenihan has a teensy weensy part to play.

[121.5]

it is a bear trap

dont worry, a few loud mouths will make a few bob

alot of folk will be stung again

traders churning client accounts

'the markets up! the markets up!'

[goosebump]

Anyhow, to answer the question, perhaps the manic desperation to not wipe out the float by Mr Lenihan has a teensy weensy part to play.

Its not quite that 'sexy':

Share price gets a major boost as bank manages to avoid bombshells - The Irish Times - Wed, May 20, 2009

"The bank’s decision to buy back debt could generate an estimated €700 million in the kind of loss-absorbing capital that investors are demanding within banks. The bank will attempt to buy back bonds from investors at significant discounts from the value at which they are sitting on its own books, netting a substantial gain."

[MsAnneThrope]

BOI shares are up because they are currently buying back corporate debt

But aren't they buying back old debt using newer more expensive debt?

[goosebump]

But aren't they buying back old debt using newer more expensive debt?

ECB rates have fallen by nearly 3% over the last year. They're borrowing at 1% to pay back debt that was issued at 3-4%. This is normal in banking operations.

[Digout]

You can't discuss share prices here

This is as the Commissariat of Financial Regulation [SIZE=1](aka IFSRA, aka the Central Bank, aka the Financial Regulator , aka Whatever New name it gives itself to pretend past disgraces weren't it's fault)[/SIZE] has passed a law in Ireland banning discussion of share prices unless strict rules are adhered to.

Here's the link to the relevant statue - personally I disagree with this censorship - but the Commissar will jail or fine you if you don't play ball.

cYp

Can we talk about it in the pub?