Has anyone noticed there have been several days in the last couple of weeks where BKIR.L gained significant ground and IRE not so much? The IRE premium over the London stock is evaporating again.
I have been owning/trading this since the heyday of the banks crisis, and historically for years IRE would fetch a premium up to 40% higher than BKIR.L. In Oct/Nov of last year the premium quickly evaporated and the parent stock and US ADR traded in relative parity. Then of course the premium of IRE over BKIR.L increased but nowhere near 40%, 22% was the highest its been recently.
I bring these things up frequently because this phenomena is intriguing to me and the premium the market gives IRE over BKIR isnt a bad thing IMO even if fundamentally unsound. The market it what it is and always will be, its sentiment and TA over fundamentals because many folks dont bother with much fundamental analysis.
BKIR.L is at .17 so x 40 x 1.3 and we get 8.84. Thats the TTM value of IRE currently. IRE is just under a 5% premium currently. The times I have seen the IRE premium spike is periods of high traffic when traders move in on it. I am optimistic that BKIR will continue to appreciate and settle again around the .20-.21 level now that .15 has been cracked and held. We will see. The fundamental situation at the bank is finally improving as far as what will be reflected earnings wise, although impairments from continued losses in the real estate in arrears will be significant, but it is now reduced to 4% of the real estate overall portfolio.
Longtime Long and adding still when able.
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