AIB looks set to secure entry to the Dow Jones Euro Stoxx 50, the high profile index of blue-chip shares, next month, provided the merger of two Italian telecom companies goes ahead on time.
Although shares in the bank dropped by 30 cent to close at €16.85 yesterday, analysts said the bank's market capitalisation of €14.6 billion should be enough to gain entry.
Inclusion of AIB would not push the weighting of banks in the index above the stipulated level of 60 per cent.
"On the basis of our model, we think it's in," said Scott Rankin, banking analyst at Davy Stockbrokers.
However, he cautioned that for AIB to be included, the merger of Telecom Italia and Italian mobile company TIM had to be completed as scheduled on June 30th.
The Dow Jones Euro Stoxx 50 is reshuffled each August. The opportunity for AIB to be included earlier has arisen because of the merger.
This would not be the first time the bank has joined the index, which is used by a large number of fund managers in deciding asset allocation.
AIB was first admitted to the index in early 1999, resulting in a sharp rise in its share price. Later that year, the bank was dropped from the index, triggering a slide in the stock.
