Investors fret as selling continues

The local equity market closed the week with further declines yesterday as investors scrambled to cash in their investments. Both HSBC and Bank of Valletta closed the day at their lowest permissible levels, leaving plenty of shares outstanding on the offer side.

Bank of Valletta was the day's biggest loser as the equity declined for the fifth consecutive session, bringing the total drop for the period to more than 16.7 per cent and thereby wiping Lm90 million off shareholders valuations. The day's turnover amounted to 13,629 shares which were exchanged across 31 trades with the price closing the day at Lm4.08.

HSBC Bank Malta shares declined 3.9 per cent during yesterday's session as 24,345 shares were exchanged across 48 trades. All trades were executed at the Lm2.24 level.

Elsewhere in the market, Maltacom shares closed the day modestly higher after an earlier gain was completely reversed. The equity traded within a 2c range above the Lm1.80 level, closing the day at the Lm1.81,5 mark.

Simonds Farsons Cisk was the day's top gainer as 2,343 shares were struck across four deals. The equity closed the day higher by 2.5 per cent at the Lm0.80 level.

A single transaction for a mere 100 shares brought a slim decline to the price of Middlesea Insurance, which closed the week at Lm5.39,5. Meanwhile 2,811 shares of Malta International Airport were exchanged across two trades squeezing the price slightly to close at Lm1.42,2.

Banco Santander in exclusive talks with Alliance and Leicester European equity markets extended their initial gains by mid-morning yesterday at the end of a busy week for corporate earnings. The FTSE Eurofirst 300 rose 0.4 per cent to 1,390.67 while the German Dax increased 0.6 per cent at 6,073.27 and the French CAC 40 gained 0.5 per cent at 5,258.56.

Alliance & Leicester jumped 8.9 per cent to £12.22 after a newspaper reports that Banco Santander of Spain is in exclusive talks to buy the UK banking group for £6.5 billion. After an initial decline, Santander firmed 0.5 per cent to €12.10.

US stocks gained on Thursday as a drop in crude oil, along with strong earnings from the retail sector offset economic data that had raised fresh interest rate fears. Unit-labour costs - an indicator of inflationary pressure - showed a bigger than forecast increase in the first quarter, adding to speculation that the US Federal Reserve, chaired by Ben Bernanke, would continue to raise interest rates. However, data also showed an increase in productivity.

At the close the S&P 500 was up 0.3 per cent, or 4.40 points, at 1,312.25; the Nasdaq Composite had gained 0.9 per cent, or 19.93 points, at 2,323.90. The Dow Jones Industrial Average added 0.4 per cent, or 38.58 points, to 11,438.86 - a fresh six-year high. At one point, the Dow was up 62.80 points, the highest one-day gain since January 2000.

Valletta Fund Management and Bank of Valletta plc.