Financial news

The Malta Stock Exchange shed 1.2 per cent to close at 4,802.22 points, as a price adjustment in International Hotel Investments had the upper hand on a positive day for the financial companies.

After the influx of new IHI listed shares, the hotel company now stands as the third largest equity in terms of market capitalisation. During the last session of the week, the equity finally adjusted to the bonus issue, dropping €0.16 or 13.79 per cent to close at the €1.00 level. The listing of new shares relates to both a bonus issue and in lieu of the purchase of two hotels from Corinthia Palace Hotel Company Limited. Shares issued to Istithmar Hotels will only be listed once they're fully paid up.

All the financial companies trading on the day, closed the session in positive territory. Bank of Valletta registered the highest number of trades yesterday, as 8,118 shares where transacted across 16 deals. The largest bank in asset terms gained half a cent to close off at Lm3.64.

On the other hand the largest bank and company in terms of market capitalisation climbed nearly a cent to end the session at Lm1.91. HSBC Bank Malta was the most liquid equity with 16,285 shares being struck across nine deals. At the end of the session the best bid was for 2,000 shares at Lm1.90,6 against supply of a further 2,440 shares standing on the offer side at the day's closing price.

Lombard Bank recouped a full cent as fresh demand saw 5,528 shares being taken off the offer side helping the price increase to Lm4.56. Maltacom was the other equity to terminate the session in negative, as the telecommunication company shed half a cent to close at Lm1.44,9.

Meanwhile, a single trade in Malta International Airport had no monetary impact on the equity as the airport operator closed unchanged at Lm1.38.

Bond market sell-off gathers pace

Yesterday, European equity markets extended this week's sell- off to more than four per cent as financial stocks led the slide. By midday, the FTSE Eurofirst 300 was down 0.9 per cent, Frankfurt's Xetra Dax slid 1.4 per cent and the CAC 40 in Paris lost 0.8 per cent.

London equities opened lower for the third day in a row and dipped further by midday, reflecting heavy overnight losses on Wall Street and in Asia as investors continued to worry over the spectre of global monetary tightening. Oil majors were among the few gainers in the blue-chip index, as the price of crude oil moved on Thursday near nine-month highs at over $71 a barrel. By noon the FTSE 100 shed 0.78 per cent. The mid-cap FTSE 250 lost 1.6 per cent.

Japanese stocks were hit badly by fears of rising global interest rates following sharp overnight increases in US and European bond yields. Shares plunged despite reacting calmly on Thursday to overnight global stock market turmoil. The Nikkei 225 closed down 1.5 per cent. The broader Topix fell 1.3 per cent.

Sentiment in the bond markets around the world continued to deteriorate apace as investors worried about the outlook for interest rates prolonged their selling spree.

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.