AIB hopes to regain spot on Eurostoxx 50

All  eyes will be on AIB this week to see if the bank can regain a coveted listing on the high-profile Dow Jones Eurostoxx 50…

All  eyes will be on AIB this week to see if the bank can regain a coveted listing on the high-profile Dow Jones Eurostoxx 50 index.

The annual review of the index, which lists the top 50 European blue-chip shares, takes place early next month. But inclusion will be determined by a company's share price next Friday, the last trading day in August.

Shares in the two leading Irish banks gained sharply in recent weeks, boosted by speculation that they would make it onto the Eurostoxx 50, which is widely tracked by index funds worldwide.

But hopes that Bank of Ireland would merit inclusion in the index faded last week as the bank's share price faltered. However, AIB retains an outside chance of meriting inclusion on the index although analysts say it faces stiff competition from French construction group Lafarge for the one place likely to come free on the index.

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A 15 per cent rise in Lafarge's share price since the start of August means that the company's market capitalisation has now overtaken that of AIB. But there are still five days of trading to go before the final decision is made.

"If AIB can outperform Lafarge by 4.9 per cent between now and the end of the month, then this situation is reversed and AIB is likely to be admitted," Goodbody Stockbrokers said on Friday.

But failure to make the list could lead to short-term technical selling pressure on the bank's shares.

This week also sees a batch of half-year results from a wide range of secondline stocks as the interim reporting season gets into full swing and the market recovers from the summer lull.

Building materials and DIY group Grafton kicks off with results on Wednesday. The company, which owns the Woodies DIY chain, is expected to continue to report strong double-digit growth with its British business proving the main driving force.

Goodbody, which is forecasting a rise of more than 14 per cent in adjusted earnings per share to 15.9 cent, said the figures would "highlight the success of the company's strategy of having a diversified earnings base in businesses serving both the UK and Irish construction sectors."

Food group Glanbia, retailer Arnotts, insurer FBD and bathroom manufacturer Qualceram also issue first-half figures this week, providing some insight into the health of corporate Ireland.