AIB is at risk of being dropped from the Dow Jones Euro Stoxx 50 index of blue-chip European shares after only two years if its valuation doesn't improve by the end of August when the Stoxx committee conducts its annual re-evaluation of the list.
The bank is currently ranked at 52 according to the Stoxx criteria, which leaves it two places outside the cutoff line. Under Dow Jones Euro Stoxx rules, the top-40 stocks based on free "oat market capitalisation are automatically included in the index.
After that, any current components of the index ranked between 41 and 60 are added until the remaining 10 places are "lled. Excluding larger non-component stocks, AIB is behind 11 other contenders.
Being a part of the index can boost the price of a stock as participation makes the shares available to index-linked investments such as exchange traded funds. AIB enjoyed a near 6% boost in the weeks leading up its 1 July 2005 admission to the Euro Stoxx 50, as investors anticipated future prices rises from its 17- 18 range. AIB traded as high as 24 in February, but has eased back since then along with other domestic banks as the housing slowdown has taken the shine off their future earnings prospects.
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