Irish Bank Stocks - the right time?

L

lotus

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Is it a good time to invest in Irish bank stocks in general?
Whats the worst that could happen?

If the goverenment was to recaptalise would this have a positive or negative effect on bank stocks?

How can one ascertain which banks have less exposure to the property market ie less developers and 100% mortgage types on their books?

I have tried to keep this thread general as I realise individual stocks cannot be commented on...........
 
Hi Lotus.. the worst that can happen is for the shares to go to zero. Realistically, this is is quite possible as when their bad loans are disclosed I feel it's not going to be pretty. However, if you fancy a punt, i.e. have a few quid which you are prepared to lose, the risk reward is very attractive in your favour. Alternatively, you could look for value in financials outside of Ireland.
 
Basically, if you can't answer the above questions yourself, you should not be thinking of doing this.


Would you buy a house/car without having it inspected and knowing how many rooms/wheels it has?

Also, if you base your investment decesions off what people tell you on the internet tell you...............
 
There is no law of markets that says what goes down must come up.

There seems to be worries about write offs of over enthusiastic loans to property developers.

The persistent selling is telling us something about the net value of irish banks - I think the government saved their bacon in giving the guarantee last month - otherwise some may have gone.

At these low share levels they cannot raise money by a rights issue - if they cannot interest a Warren Buffet or George Soros to invest, they will have to ask Government.
 
The persistent selling is telling us something about the net value of irish banks - I think the government saved their bacon in giving the guarantee last month - otherwise some may have gone.
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Couldn't some still go?
It looks pretty dodgy at the moment with two now banks below a Euro a share.
 
Banks won't go down to 0 but if a bank needed money then the governments would step in and acquire about 75% of it therefore making your shares worthless. Other option is that some Saudi steps in and buys it with his spare change.

Banks aren't a great option at the moment. Wait until some of the top guys get the boot and then the price will go up. There is no confidence there and why should there be.
 
hi all

In relation to the bank shares, if the goverment did step in & take over, would it render the shares usless / nill in value? How is this possible? & what would happen to ones shares in the bank?

Personally, i dont have any shares in any bank, but i know my sister has some in BOI, just wondering what could happen to them?
 
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edwardm said:
hi all

In relation to the bank shares, if the goverment did step in & take over, would it render the shares usless / nill in value? How is this possible? & what would happen to ones shares in the bank?

Personally, i dont have any shares in any bank, but i know my sister has some in BOI, just wondering what could happen to them?
Click to expand...


They mightn't be useless but they could be worth only 10% of their current prices.
 
saudis wont come in and buy these as irish banks are way too exposed to a collapsing property market.
 
cancan said:
Also, if you base your investment decesions off what people tell you on the internet tell you...............
Click to expand...

This has been all over the place in the past few days, can we have less of it please, it's silly.

Goin on like the internet more of a chasm of stupidity than any other medium.
 
If the Government takes over the bank that means they take over the share holders at that current level(price)(if you are lucky, no more shares. Therefore why would you invest in the banks, they do not invest in us either without terms and conditions and guarantees. Bank shares are never guranteed, in good times you can be lucky the whole idea of shares is knowing when to sell if they were bought at 12 euros you are lucky that you could have sold them at € 18-- now it is not worth selling, but holding on to them is risky too, sit it out as there is nothing to loose anymore if you have shares. I would most certainly not buy them.
 
in 2-3 yrs the property/stock opportunities will be the greatest in history..

until then just ride it out, keep all in cash/gold/tinned peas
 
Just on RTE news ( not on their website yet) that the possibility of bank mergers has emerged as anoption.

The plot thickens.....
 
In answer to the original question, it's a reasonable bet, but it's still a bet, and you can win or lose. If you can afford to lose (and I mean that if you choose to buy now, you better be prepared to end up with a big fat zero in your stock portfolio) then I would gamble. In fact, I have done. So far, so good, I've made a (paper) profit of about 2500 euros since last Thursday, but I'm not kidding myself. I still stand a very realistic prospect of losing the lot and if I do I won't complain; that's the gamble. If you feel you can do likewise, then gamble, but don't say I didn't warn you.
 
Folks

A gentle reminder - we do not speculate about share prices of specific companies on Askaboutmoney.

This ban was lifted, but only temporarily, at the peak of the crisis.

It is acceptable to ask such factual type questions as
"What happens if the government nationalises the banks?"
"Is this a good time to buy bank shares generally?"

It is not acceptable to post data on Bank of Ireland to show that it is or is not a good buy.

We have had to delete such posts. If we have more posts in breach of the guidelines, we will close the thread.

Brendan
 
I agree with eggball, it might be a good bet to gamble on bank shares. I consider buying shares to be a type of gambling and I'd only do it knowing that I risk losing the bet and if the odds were good.
 
From what I can understand from the papers, one of the banks has more or less said that it will have a rights issue in the coming weeks. As someone who is interested in taking a punt on these particular shares, when is the right time to buy? If I buy now I presume I would have to buy again when the rights issue occurs? If I hold off, will I be able to buy at the same 'value'.
Basically, should one buy before or after the rights issue?
Sorry for jumping on the thread, it seemed the most relevant.
 
Generally what happens with a rights issue is that if you own shares, you are given an option to buy more shares at a discounted price. e.g. if the stock is trading €1 you will be given an option to buy one new share at €0.80 for every five shares you own.

Now these rights (options) usually trade themselves so if you choose not to exercise the right you can sell them but I guess it would be at a discount to what the intrinsic value. In the previous example, the intrinsic value would be €0.20 for each right and so €0..04 per shere.

In reality, as a small-scale investor, ir probably makes more sense to wait until after the rights issue as you would probably get screwed by your broker for transaction fees.
 
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