Financial news

Trading activity flared during yesterday's trading session at the Malta Stock Exchange with the market driven by major corporate news relating to two banking equities, namely the publication of interim results by HSBC Bank Malta and the acquisition of a further stake in Maltapost plc by Lombard Bank Malta plc.

HSBC Bank Malta issued its financial results for the six-month period ending June 2006 after Monday's closing bell which showed a 23.1 per cent jump in pre-tax profits, reported at Lm25.3 million. The board of directors declared the payment of an interim ordinary dividend of 6c6 gross per share and an additional special divided of 4c gross per share, which will be paid to all shareholders who are on the bank's register as at August 8.

Investors reacted positively to the news and initial buying activity saw trades being struck at the Lm2.02,5 level. As the session wore on, however, a few sellers came to the market and the equity closed the day just below the Lm2 resistance level, which at Lm1.99,5 still represents a gain of 3c or 1.5 per cent.

Lombard Bank Malta announced that it had purchased a further 25 per cent of the issued and paid-up share capital of Maltapost plc through its fully-owned subsidiary Redbox Ltd, with newspaper reports putting the consideration of the deal at slightly above Lm1.2 million. The market reaction to the news was lukewarm with a single investor purchasing 498 shares from supply placed at a lower offer price than its previous closing level. As a result the equity closed 6c or 1.2 per cent lower at Lm4.94.

Trading activity in Bank of Valletta picked up nicely with 11,462 shares changing hands across 10 transactions. The equity easily recouped its previous session's entire decline, closing the day back at the Lm3.60 level. Strong interest was also evident in Maltacom where a grand total of 14,320 shares were exchanged across 10 transactions. The equity however closed lower by the slimmest of margins at Lm1.41,9.

Elsewhere in the market Plaza Centres and Simonds Farsons Cisk moved by the same monetary amount but in opposite directions, with Farsons gaining a penny to close at Lm1.01 while Plaza Centres shed the equivalent of 1.45 per cent to terminate at 68c. In the fixed interest sector of the market, activity was spread across four corporate bonds and seven government stocks.

Global stocks in positive territory

Yesterday, European stocks rebounded from a five-day plunge and shares in Asia advanced for a second day on waning concern that the US subprime-credit crisis will damp global economic growth.

In London, there were strong interim results at Lloyds TSB. The FTSE 100 started the session 1.1 per cent higher at 6,273.5, a broad-based rise of 67 points, taking it back into positive territory for the calendar year and off a four-month low hit at the end of the previous session.

Strength in mid-cap house building stocks helped the FTSE 250 continue its recovery, rising 1.2 per cent to 11,208.7, a gain of 138 points. Most Asian stocks rose as credit fears eased, with the focus on earnings after gains on Wall Street. Japan's Nikkei 225 index bucked the trend and dipped 0.2 per cent on some weak corporate results and political uncertainty after an election defeat for the government at the weekend.

US stocks rebounded yesterday from the worst two-day slide since 2003 as Wall Street's biggest securities firms said the sell-off made shares of banks, homebuilders and retailers cheap. US stock-index futures advanced today. Sun Microsystems Inc., the world's fourth-largest maker of server computers, gained in Europe after reporting profit that beat analysts' estimates.

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.