NEW YORK - American have consistently paid a premium on Bank of Ireland's and Allied Irish Banks' stock. It is unsure why they pay this premium, perhaps because they do not live in Ireland and do not see the extent of the problems.
Currently Bank of Ireland is trading at $1.58 on the American exchange but its equivalent on the Irish exchange as of today is $1.4 or a 13% discount. On the other hand Allied Irish Bank trades at $1.01 on the American exchange but it is only worth 80 cents on the Irish exchange. This means Americans are paying a 25% premium.
One might wonder how they can take advantage of these sheep American investors and questions of arbitrage emerge. If Americans are willing to pay $1.2 for my $1 dollar then I would love to find as many Americans as I can. It seems the only way one could make money on the Irish Banks is to buy the stock in Ireland and unload them to zealous American investors.
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