AIB SET TO REASSURE SHAREHOLDERS ON FUNDING - Shareholders in AIB Group gather in Dublin at noon today for the bank's annual general meeting. AIB's share price was standing at €22.70 cent a year ago, but had fallen to just over €13 yesterday. 70% of the bank is owned by institutional investors and some of those are pension funds in which we all have a stake.
Pramit Ghose, managing partner with Bloxham Stockbrokers, says the AIB board will tell shareholders at the AGM today that although the bank's shares have fallen considerably this past year, they have performed in line with the rest of the banking community worldwide. He says that they will argue that, given the bank's diversified business, the fall is actually overdone.
He says the main question shareholders will focus on is the bank's funding. This is especially true after Royal Bank of Scotland today announced a record £12 billion sterling rights issue. He says he expects the bank to say that its funding is strong and will remain strong. He also expects the bank to reassure on its stabilising earnings and adds that will say it expects earnings to rise, certainly by 2009. One possible area of growth for AIB is a more aggressive play in the mortgage market, he adds.
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MORNING BRIEFS - Royal Bank of Scotland has announced a record £12 billion sterling rights issue to cover a potential £5.9 billion writedown on the value of toxic assets and help rebuild a stretched balance sheet. RBS said it will offer 11 new shares for every 18 existing shares at 200 pence per share in the rights issue, Europe's biggest ever, representing a 46% discount to yesterday's closing price.
*** 7 Irish seafood companies, along with BIM, which is the Irish Sea Fisheries Board, are talking part in the European Seafood Exposition in Brussels which starts tomorrow. It is the biggest presence Irish firms have ever had at the show.
*** New York crude hit a high of $117.76 a barrel yesterday. Overnight that price fell back 33 cents. London Brent hit $114.50 cents having gone as high as $114.86.
*** On the currency markets, the euro is worth $1.5871 US cents and 80.18 pence sterling.
