PUNCH-DRUNK Bank of Ireland shareholders could be forgiven for latching on to any small cause for cheer this week.

Reeling from a fresh bout of share price weakness which saw the bank's stock price drop 10 per cent on Tuesday, as management said the economic situation continues to erode profits, investors were greeted by a note from Bloxham entitled, "What is the share price telling us?"

Now, despite something of a dead cat-bounce on Wednesday and Thursday, BoI has been in the vanguard of financial stocks heading in a southerly direction since the market peaked last summer, losing around half its market value.

Cancel the winter cruise to the Bahamas or golf membership at the K Club, might be what this slump is telling some weary investors.

Not so, says Bloxham's Kevin McConnell. Management's "no guidance" policy (the bank was criticised this week for not providing enough detail on the exact magnitude of the disaster set to unfold) has "opened the bank up for too much speculation with regard to future dividend and capital policy".

Indeed, brokers are factoring in a substantial rights issue to bolster the bank's capital ratios.

But the cheery folk at Bloxham say the share price reflects a "doomsday" 200 bps (basis points) deterioration in bad debts out to 2010, exceeding even the 150 bps posted in the depths of the 1990s, which is "simply not credible".

As a result, the bank's share price is 45 per cent undervalued at current levels.

McConnell says the venerable bank's management's policy of no guidance is backfiring on them and "is not working".

Unless, of course, with decades of collective experience at the top of Ireland's top PLCs, BoI's top-brass know exactly what they are doing and fear even further share price slaughter by going through the potential carnage line by line. A possibility perhaps?