Financial News

Equities took a breather yesterday as supply returned to the market following the significant rally of the past few weeks. The Malta Stock Exchange Index ended practically flat, up by a mere 0.16 per cent to 4,534 points.

Bank of Valletta shares gained a further 5c up to Lm7.05. The equity originally opened at Lm7.02 but soon moved higher on lack of supply. However, once at the Lm7.05 level, supply came back in abundance matching all the bids on the market.

Significant supply was also evident in HSBC Bank Malta which eased back by 1c to Lm7.14. Most of the trading was undertaken at the previous day's price and it was only towards the end of the session that the share price retreated slightly. Lombard Bank shares ended the session with the highest gains for the day. The share price advanced by 8c or 1.1 per cent, to Lm7.08.

Also slightly positive finished Maltacom shares which closed the session at the Lm1.65c9 level. Trading in the equity was limited to a mere 6,560 shares.

In the other trades for the day Malta International Airport and Middlesea Insurance shares both ended the day unchanged at Lm1.50 and Lm3.40, respectively.

On the fixed income market activity was spread between six corporate issues and 10 government stocks with volumes indicating only retail activity.

Vodafone sent chills through the Telecoms sector

European stocks were driven lower yesterday after disappointing guidance from Vodafone UK. By midday, the Eurofirst 300 was down 0.4 per cent to1,234.12, while Frankfurt's Xetra Dax index shed 0.2 per cent to 5,085.54 and the CAC 40 in Paris fell 0.1 per cent to 4,545.63. Vodafone's sharp fall ensured the decline on London's FTSE 100 outpaced other European indices. It slid 0.6 per cent to 5,436.3.

Interim results from Vodafone showed better-than-expected profits but the mobile phone group's outlook statement struck a more bearish tone. Vodafone announced revenue up to £18.3billion for the six months to September 30 from £16.7billion in the same period a year ago. Interim pre-tax profits fell to £4.107billion from £4.540billion. Vodafone said it expected full-year mobile revenue growth to March 31, 2006 in the middle of the six per cent to nine per cent range previously indicated. The share buyback programme for the current financial year is expected to reach £6.5billion. However, the company also said it expected a decline in free cash flow in the following financial year to March 2007. The shares fell 9.3 per cent to 131.5p.

Overnight on Wall Street, the Dow Jones Industrials average added 0.1 per ent at 10,69717 but both the S&P 500 and the Nasdaq Composite dipped 0.1 per cent to 1,233.76 and 2,200.95 respectively.

Japanese stocks continued to fall yesterday on fears of overvaluation, while export stocks provided little counterbalance. The Nikkei 225 closed 0.2 per cent lower at 14,091.77, while the Topix fell 0.5 per cent to 1,472.47.