Equities fall on negative sentiment

Yesterday's trading session at the Malta Stock Exchange ended in a blood bath, with as many as seven equities closing in negative territory. Bank of Valletta was the day's only advancer as 10,524 shares were purchased across 16 transactions, pushing the price higher by 4c or one per cent to Lm3.89. Lack of supply forced the hand of investors who were left with no option other than to increase their bid prices.

HSBC Bank Malta declined by the slimmest of margins, terminating the session at Lm2.07,9, while Lombard Bank shed 3c or 0.6 per cent to close at Lm4.68.

FIMBank succumbed to a constant supply of shares which attached the bid side, squeezing the price down by 3.3 per cent to the $1.75 level.

The day's top decliner was Middlesea Insurance which dived 7.8 per cent to Lm2.19,4 as an acute lack of bids failed to support the price even though the selling activity consisted of merely 1,444 shares. Maltacom shares retraced Friday's positive performance, swinging back into negative territory with almost the same vigour. The day's activity saw 8,800 shares being sold across eight transactions, pulling the equity lower by 6c or 3.5 per cent to Lm1.64.

A similar percentage decline was sustained by Malta International Airport on considerably lower volume. In fact, only 2,000 shares were sold across two deals but the wide bid/offer spread meant that the equity closed the day at Lm1.35,1.

Elsewhere, 46,000 shares of International Hotel Investments changed hands a the €0.96 level, which represents a one per cent discount to its previous closing level, while Plaza Centres closed unchanged at 67c on 2,200 shares.

Japan's Tankan shows business is bullish

European stocks were higher yesterday as fresh merger talks emerged, boosting the likes of EDP, the Portuguese power generator and Ahold, the Dutch retailer. By midday, the FTSE Eurofirst 300 was up 0.1 per cent, while Frankfurt's Xetra Dax added 0.1 per cent. In Paris, the CAC 40 gained 0.2 per cent and London's FTSE 100 climbed 0.2 per cent.

Business sentiment among big companies was stronger than expected in the three months to September, lending credibility to the view that Japan's economic recovery remains firmly on track. The Bank of Japan's Tankan survey, the country's most closely watched gauge of economic conditions, showed big manufacturers' sentiment at 24 points, higher than the previous reading of 21, and three points better than the consensus forecast. The so-called diffusion index subtracts pessimistic sentiments regarding Japan's economic outlook from optimistic views.

The strong Tankan result sent the Nikkei 225 stock average 0.8 per cent higher to 16,254, its highest close in nearly a month.

The Dow Jones Industrial Average reached its highest level in more than six years on Friday after a week of strong advances for equities. The S&P 500 reached a five-and-a-half year high during the week.

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Valletta Fund Management (tel. 8007 2344) and Bank of Valletta plc (tel. 2131 2020).