BoI shares lift Iseq higher

Iseq closes up 28.27 points to 3177.77 All attention focused on bank shares today in the wake of yesterday's landmark announcements about the future of the banking sector, which took place after the markets closed.

The Iseq replicated the trend evident in overnight ADR trading in the US, which favoured Bank of Ireland, but saw losses in AIB shares.

Despite posting a pre-tax loss of €1.8 billion for 2009, Bank of Ireland was the big winner. Brian Lenihan's relatively positive comments on the bank yesterday appeared to boost the stock, while investors responded positively to the company's announcement that it expects to raise a "substantial" amount of new capital from private investors.

It stormed ahead throughout the day, hitting highs of €1.70, and closing up 24 per cent at €1.60, a gain of 31 cent. Traders noted a significant level of interest, particularly from retail investors who had stayed away from the market of late.

There was a lot of trading in AIB shares, but it gave up early gains to shed €3.8 per cent, just under 5 cent to close just shy of €1.20. This was perceived by some analysts as a relatively robust performance by AIB in light of the capital requirements the bank is faced with, although the decision by the Minister of Finance not to disclose the level of the government's potential stake in the bank may have staved off further falls.

Irish Life & Permanent, which is not involved in the Nama process added 3.8 per cent though on minimal volumes.

Away from the banking stocks, financial services provider IFG Group rose 1 per cent, as the company's preliminary 2009 results announced yesterday, pleased investors.

Volumes on Iseq heavyweights CRH and Ryanair were dwarfed by the trading in bank stocks, but the two largest constituents on the index finished down a half a per cent and 1 cent higher respectively.