Financial news

The Malta Stock Exchange bore the brunt of some selling activity in Maltacom yesterday, as the index dropped by 0.42 per cent to 4868.034 points. On the fixed income sector of the market, government stocks came under further pressures as expectations of a further interest rate hike came into fruition when the Central Bank of Malta raised interest to 4.25 per cent on Tuesday.

After a steady opening to the session, intra-day selling activity hit Maltacom's bid side, forcing shares of the telecommunications company to hit an intra-day low of Lm1.38. This level was deemed as a good entry point to other investors who poured in fresh funds, helping the price to recoup some losses to close the session at Lm1.401.

Simonds Farsons Cisk continued to gain ground on the back of the optimistic outlook announced by the company last week. The equity rose a further 2c to hit a new high for this year and terminating the session at 92c.

HSBC Bank Malta flirted once again with the Lm1.90 level, which is proving to be a significant support level for the bank. With strong buying activity sparked at that level the equity recovered 2c to close the day at Lm1.92.

International Hotel Investments gained a further €0.01 to close at €1.16 as the equity traded for the last session with the right to receive a one-for-six bonus share. All resolutions on the agenda were approved by the shareholders during their annual general meeting held on Tuesday.

A mere 400 shares of Bank of Valletta were traded across two deals at the Lm3.645 level, while similarly no change was registered in Malta International Airport and Medserv.

Most of the fixed-income instruments trading yesterday registered a drop in price as the Central Bank raised its central intervention rate to 4.25 per cent following the narrowing of interest rate differentials with the eurozone and reductions in external reserves.

European stocks lower on China concern

European equities moved lower yesterday, reacting to sharp falls on Asian stocks markets after the Chinese government tripled the stamp duty payable on share trading.

The move by China, aimed at trying to cool its overheating financial markets, drove the Shanghai Composite 6.5 per cent lower. China's H share market - Hong Kong-listed shares of mainland companies - had a milder reaction, falling just two per cent.

Contagion to other markets was limited since, although tripled, the share duty only rose from 0.1 per cent to 0.3 per cent. Most concerns centred on the unexpected nature of the move and the possibility of further cooling measures.

In Europe, the FTSE Eurofirst 300 fell 0.7 per cent, Frankfurt's Xetra Dax shed 0.8 per cent, the CAC 40 in Paris lost 0.8 per cent and London's FTSE 100 slipped 0.7 per cent. The FTSE 100 was led lower by stocks trading without the latest dividend rights.

In Asia overnight, the Nikkei 225 closed 0.5 per cent lower while the broader Topix fell 0.2 per cent.

US stock-index futures retreated after China tripled the tax on securities transactions, sending shares in Asia and Europe lower and sparking concerns about another global rout.

The financial news was compiled by Valletta Fund Management (tel. 8007 2344) and Bank of Valletta plc (Tel 2131 2020). BOV and VFM are licensed by the MFSA to conduct investment services business.