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Shares in nationalised lender Anglo Irish Bank continue to trade in the over-the-counter (OTC) market in the US and the stock has appreciated an extraordinary 433% since hitting a low of $0.12 in mid-January, outperforming peers AIB and Bank of Ireland by a wide margin.
Anglo shares closed at $0.64 on Friday, up 6.67% on the previous day, although volumes were low. Trade in the stock has been highly irregular in the last eight months, with unpredictable daily volumes ranging widely from as much as 250,000 per day to just a few hundred shares changing hands. However, certain significant price patterns have emerged over that time.
The off-exchange trade in Anglo shares could complicate the job of the assessor finance minister Brian Lenihan promised to appoint to calculate the value, if any, of Anglo shares after nationalisation.
It is widely believed that an assessment of Anglo's value will determine that shareholders should receive no compensation, as loan losses have effectively wiped out the bank's equity. Anglo's OTC price suggests, however, that at least some investors see value in the bank yet.
The shares plummeted to $0.12 just prior to the state takeover on 21 January, but rallied to peak at $0.34 immediately after the government and the bank suspended trading in the stock on the Dublin and London exchanges. Anglo then fell to trade below $0.10 until the government announced its plans for Nama in early April, which bumped the shares into the $0.20-$0.30 range for three months.
Anglo's offer in July to buy back €3.2bn in subordinated debt at a premium to boost its capital ratios caused the price to treble to $0.90 on relatively heavy volumes, before it settled into its current range of $0.60-$0.70. The appointment of new chief executive Mike Aynsley had no discernible impact on the shares.
While both AIB and Bank of Ireland have both recovered some of their price drops from earlier in the year, neither has come close to matching Anglo. Bank of Ireland has improved by 278% while AIB has come back 49%, with the biggest gap opening after Anglo's July rally.
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Given the serious public interest amongst Sunday Tribune readers as many may have lost their savings/pension in Anglo Irish shares, I have put a chart history of this "shadow" price from the OTC market in New York on my website:
www.derekbrawn.com/Equities.html
The price of Anglo Irish Bnk Capital ADRs closed on Friday at US$0.70 with nearly 22,000 shares traded that day. The chart at the above URL also shows daily volume.
The price of these shares actually hit a low of just 3 cents on Feb 19 & 20 of this year and hit a recent high of US$0.84 on 28 July 2009 with 120,000 shares changing hands "off-exchange".
As your article correctly points out, trading has been erratic in terms of both price & volume and the latter has indeed exceeded 250,000 shares, in fact on 16-July last the number of these "Grey-market" shares traded was 267,900 at 30 cents a piece.
It's great to see the Sunday Tribune pushing the envelope and educating the public in this extremely esoteric market.