Liams Last Post : Shock and Awe bailout package drives huge relief rally.

Good Afternoon,

 

Well that is some turnaround. A shock and Awe number agreed by the Finance Ministers of  Europe under pressure from Barack Obama amongst others that a piecemeal approach is not enough to boost confidence. A cynic might suggest that this deal was motivated by the German Banks outing pressure on the German government as they are the largest exposed holders of Greek Sovereign debt.

 

The argument that a technical bailout solution financial does nothing to address the core issues of over indebtedness and a resistance on the part of the many people and governments to actually force their countries in to a period of sustained austerity.  The same bears also argue that once the shorts have been squeezed out of the market that the fundamental picture will become apparent again and the market may collapse….Lets hope not… For the moment today is a positive day , many stocks roard immediately at the opening and have continued to rally throughout the day.

 

In Ireland Bank of Ireland announced that the results of their Debt for Equity Offers. The bond holders tendered an amount (€852m) and at prices that the capital gain on the exchange is c.€233m. The amount tendered for shares is €61m. The capital gain generated (subject to a max of €100m) and shares issued on the exchange will reduce the rights issue to €1,723m.

The gain is positive and the share take up might be a little bit lower than anticipated. However, there is limited materiality to the news.   Shareholders will provide a slightly higher amount of the recapitalisation amount than the minimum, but see lower dilution. 

 

Huge moves today., AIB leading the charge higher +24% , Bank of Ireland and irish Life up 17.5% and +18% respectively.  CRH was roaring today also +14% to jump back abov e the eur20 level and Kingspan which will release an IMS later this week +10%

 

Glanbia co-op members vote today on the proposed acquisition of the PLC dairy business.

 

It is still all about the macro picture , Today is a massive relief rally. It is early in the week to be too assured yet..

 

Have a good evening

 

Liam

 

 

 

___________________________________________

Liam Boggan

　

Merrion Stockbrokers

Tel.: 353-1-2404171

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