Financial News

The local equity market had a slow start to yesterday's trading session with the first deals being struck a good 40 minutes after the opening bell. A slight gain in HSBC Bank Malta was enough to see the index close in positive territory, notwithstanding slim declines elsewhere.

Following its previous session's decline, HSBC Bank Malta recouped 1c9 or 0.9 per cent of its value as investors increased their bids to snap up shares offered at the Lm2.20 level. A grand total of 13,705 shares were exchanged during the session highlighting the general current lack of interest in equities, notwithstanding the bank's interim results published just seven days ago.

Bank of Valletta stayed under pressure as sellers remained abundant at and below the Lm4 level. The day's activity consisted in 7,775 shares, for a total market consideration of Lm30,864, which were transacted across 14 transactions. At the end of the session a further 1,575 shares remained unfilled on the bid side at the day's closing level of Lm3.97, against 9,794 shares offered at Lm3.98.

Middlesea Insurance dropped to its lowest level since its two for one share-split which came into affect on the June 28. Two investors swapped 288 shares across a single transaction at the Lm2.50 level which represents a 3c or 1.2 per cent discount to its previous closing level.

Elsewhere, activity in Malta International Airport, Lombard Bank and International Hotels Investments did not affect their previous closing prices of Lm1.45, Lm5.99 and €0.91 respectively.

Rate hike sends FTSE into reverse

European stock markets extended their losses yesterday after the European Central Bank raised eurozone rates by a quarter point to three per cent as expected, but followed a similar decision by the Bank of England, which came as a surprise. Shortly after the ECB decision, the FTSE Eurofirst 300 was down 0.8 per cent, while Frankfurt's Xetra Dax shed 0.9 per cent and the CAC 40 in Paris fell 0.9 per cent.

News that the Bank of England had raised interest rates for the first time in two years sent London equities into reverse. In an anti-inflationary move, the Central Bank hiked rates from 4.5 per cent to 4.75 per cent, a decision that came as a surprise to many. Already on the defensive, the FTSE 100 index slumped as 1.7 per cent.

Japanese exporters recovered some of their recent losses and counterbalanced falls among consumer finance companies, leaving the Tokyo stock market flat. Both the Nikkei 225 stock average and the broader Topix were virtually unchanged.

Wall Street was set to open lower as investors were made anxious by disappointing earnings news as well as a surprise decision by the Bank of England to raise interest rates. An hour before markets opened, S&P 500 futures were 3.68 points below fair value, while Nasdaq Composite futures were 8.02 points below fair value.

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