Strong activity in the bonds market

Following the recent announcement of the three new Malta Government Stocks to be issued, the public's attention was mainly focused on the bonds market rather than equities. Nonetheless, 10 equities were active during the week, three of which closed in positive territory, six ended in negative terrain while one closed unchanged. The MSE Index declined marginally on a week-on-week basis, losing 0.3 per cent or 14 points to close at the level of 4,828.79.

A total of 246 deals were executed on the regular equity market for a turnover of Lm647,783 while 125 transactions were performed in Malta Government Stocks (MGSs) for a value above Lm13.7 million. Moreover, 45 transactions were recorded in local corporate bonds for a value of Lm163,810 while seven deals were executed in Treasury bills for a turnover just above Lm559,000.

Following International Hotel Investments' capitalisation of nearly €5 million from its revaluation reserves through the issue of fully paid-up bonus shares (for a nominal value of €1 each) last week, its share price gained five per cent or €0.05 on a weekly basis to close at €1.05. Activity was strong in the equity, with over 93,000 shares changing hands across 26 deals.

The top equity performer of the week was, however, Lombard Bank which climbed 6.4 per cent or 29c on Thursday's session to close at the level of Lm4.85. This was attained on a volume of 15,500 shares, spread across 17 deals.

Remaining within the banking sector, HSBC Bank Malta (HSBC) as well as Bank of Valletta (BOV) both ended in negative terrain, while FIMBank closed the week stable at US$1.90. HSBC was the most actively traded equity having 176,342 shares transacted across 115 deals. Notwithstanding this, the equity edged 0.5 per cent lower to close 1c down at Lm1.90. BOV dropped 1.1 per cent as it lost 4c over the week to close at Lm3.60. The volume traded in this latter equity was just above 36,100 shares being transacted across 48 deals.

The other local large cap, Maltacom also ended the week in negative territory on a weekly basis. The equity in fact dropped 2.7 per cent to close at Lm1.41 (on a volume of 14,065 shares) during a week in which, Maltacom Group, Malta's leading telecommunications provider, announced that it has been renamed GO. This re-branding exercise reflects the company's position as the country's sole quadruple-play organisation covering fixed voice, mobile, broadband internet and digital television.

Middlesea Insurance was amongst the negative performers of the week, sliding 4.8 per cent down to an 18 month low at Lm1.77. This was, however, attained on thin activity with 3,475 shares changing hands across seven transactions. Moreover, Malta International Airport's share price dropped 2.2 per cent or 3c to close at the Lm1.35 level on a volume of 5,450 shares. In addition, the last session of the week saw Datatrak Holding's equity price decline five per cent or 1c2 to close at Lm0.23.

In Thursday's session, two minor deals were also executed in San Tumas Shareholdings with the equity edging 0.1 per cent higher to close at Lm1.15,1. Another equity to remain unchanged, on a week-on-week basis, was Simonds Farsons Cisk in which 5,169 shares were traded across six deals to remain stable at its Lm1 level.

As mentioned earlier, trading in MGSs was heavy during the week. Following the hike in the central intervention rate announced by the Central Bank of Malta in the last monetary policy advisory council meeting at the end of May, and following the recent announcement of the three new MGS to be issued, most stocks kept on suffering declines in their prices.

On Monday, the public will be able to apply for the three new MGSs, namely the 5.2 per cent MGS 2020 at Lm100, 5.7 per cent MGS 2012 (III) at Lm102.75 and 5.9 per cent MGS 2015 (II) at Lm105.

This article, which was compiled by Jesmond Mizzi Financial Services Limited (JMFS,) does not intend to give investment advice and the contents therein should not be construed as such. JMFS is licensed to conduct investment services by the MFSA. The directors or related parties, including the company and their clients, are likely to have an interest in securities mentioned in this article. For further information please contact JFMS at 67/3 South Street Valletta or on tel: 2122 4410 or e-mail jmizzi@jmfs.net.