Financial news

Government yields rallied strongly during the mid-week trading session as the Central Bank of Malta continued to price yields of local sovereign securities at an appropriate premium above the euro benchmark yield curve. This meant that the fixed income sector of the market was definitely the focal point on the day, while the equity market registered a marginal drop of 0.1 per cent to 4830.644 points.

Maltacom was the only mover on the day, shedding 1c5 or 1.05 per cent to close at a day low of Lm1.42. Investors failed to show enthusiasm following the company's announcement that it will be re-branding all its operations under the Go trademark. The re-branding exercise will see a merger between Maltacom, Multiplus and Maltanet, streamlining the group's services. The company will retain its current name until shareholders vote for the change during a general meeting.

Bank of Valletta closed the session unchanged at Lm3.60,1, following the execution of a single trade of 4,196 shares in rapid succession across four transactions. At the end of the session a further 1,854 shares remained outstanding at Lm3.60,1 while best supply was for 1,856 shares at the Lm3.62 level.

The company with the highest capitalisation on the market was once again the most heavily traded equity on the day, although with just 8,390 shares traded, volumes were a tad lower than usual. HSBC Bank Malta closed unchanged at the Lm1.90 level, after hitting an intraday high of Lm1.91.

A single trade of 375 shares in Simonds Farsons Cisk was executed at the Lm1 level, thereby leaving its previous closing price unchanged.

A rise in bond yields leads to a fall in equities

Yesterday, poor performances from the financial sectors left European equity markets lower, but strong results from Spain's Inditex brightened the retail sector. Losses in the banking sector came as fresh concerns over rising global interest rates drove the benchmark US Treasury bond yield to a five-year high. The FTSE Eurofirst 300 was down 0.4 per cent to 1,568.09, Frankfurt's Xetra Dax shed 0.8 per cent to 7,614.39 and the CAC 40 in Paris fell 0.5 per cent to 5,866.67.

London equities edged lower by midday, as gilt yields reached seven-year highs, tracking US benchmark bond yields and adding to fears of higher corporate borrowing costs. The FTSE 100 erased early morning losses and was trading up 0.07 per cent at 6,527, a gain of six points.

Japanese stocks fell mildly, hit by increasing fears of an imminent interest rate rise. The Nikkei 225 closed down 0.2 per cent to 17,732.77. The broader Topix fell 0.3 per cent to 1,745.92.

US stock-index futures gained after Treasury bonds erased losses following a decline that earlier pushed yields on 10-year notes to the highest in more than five years.

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.