I think it is a good time to be young. A new dawn is breaking. Lots of new opportunities for trade especially with USA protectionist. Germany has apparently already signalled it will do a deal with £18 billion of car exports to UK to shift. France ditto with wine although sensibly the Brits are beginning to latch on to Italian ones . Very toothsome and reasonable eg Montefalco from near where I live. Yesterday Insaw Gaia e Ray a Piedmont Chardonny at an eye watering €200 a bottle! no I did not buy one. Italy will be out of the Euro currency within 18 months. I doubt the EU will Exist in another decade. The last time a Euro currency was tried in the 19th century it lasted 10 years or so.
This is clearly positive news for new mortgage lending for Irish banks, however new mortgage lending continues to be constrained by the lack of new housing completions in Ireland. On the 15th November, BOI’s share price traded to a high of 23.5c, just 1% below our 12 month target price of 23.8c. This rally was driven a rising yield environment in Europe and a steepening yield curve which is supportive of the bank’s Net Interest Margin and should significantly reduce the size of its pension deficit which stood at €1.5bn at September 2016. The recent strengthening of the pound also has a positive translation effect on UK denominated assets and UK profits. The share price has retraced over the past week as investors took profits on technically overbought trading signals and as their attention shifted to the political risk of the Italian Constitutional Referendum on the 4th December. We maintain our 12 month target price at 23.8c and believe the Group will have a sufficiently strong capital position to begin dividend payments relating to 2017 financial year. 20.7c is a big technical support level in the near term we to hold in and consolidate before pushing higher.
So who is controlling the SP and how is it done? I think we should be told! The other bank Banco Monte Paschi is Italian not Portuguese. I may not know how to spell it but unfortunately I bank there! It is about 500 years old and a total shambles.
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