Government still expected to sell 25% of AIB this year

A partial sale of the State’s near-total ownership of AIB is still expected this year, with Goodbody Stockbrokers naming it as one of the 10 main events likely to affect the economy in 2017.

Analysts have been expecting a spring or autumn 2017 sale of 25% of the State’s 99% holding in AIB for some time.

However, when unveiling the Government’s sales advisers last month, Finance Minister Michael Noonan put no fixed timeframe on a sale and hinted that the process could stretch into 2018.

“It remains to be seen what value the Government will get from this holding, but we believe that the Government will attempt to sell a 25% stake at some stage this year,” Goodbody said yesterday.

At the end of 2015, the Government’s AIB stake was valued at €12.3bn.

The stockbroking firm expects the minority government to survive this year despite increasing volatility from intensifying pressure on public sector pay levels, the likelihood of the UK opting for a ‘hard Brexit, concerns over a collapse of the eurozone and flows of incoming overseas investment threatened as Ireland’s corporate tax advantages erode.

However, Goodbody also anticipates Ireland will remain one of Europe’s fastest growing economies despite strengthening headwinds.

Meanwhile, Davy Stockbrokers has included CRH, Cairn Homes, Grafton Group and Kingspan as “key picks” among construction and housebuilding stocks this year.

“We see opportunity in US and European-exposed stocks. We favour companies with strong cash- generation capabilities, proven management teams and structural growth opportunities,” Davy said.