Financial news

Two corporate activities did little to stem the declines on the Malta Stock Exchange, which continued to trade weaker on a down move in the large banking sector stocks. As a result the MSE Index closed the day weaker by 0.09 per cent at 4,881 points.

FIMBank counter weighed the negative trend by advancing 2.8 per cent to close the day at the $1.82 level following the announcement, made after Tuesday's close, of the sale of their 38.5 per cent stake in Global Trade Finance Ltd, their specialised forfeiting and factoring subsidiary in the sub-Indian continent to the State Bank of India for an undisclosed amount.

GO announced that it had bought an indirect stake of approximately 10.5 per cent in Hellenic Company for Telecommunications and Telematics Applications SA, the second largest internet services provider in Greece's fast growing telecoms market, through the acquisition of a 50 per cent stake in Forgendo Ltd, a company registered in Cyprus. This announcement failed to ignite inspiration among investors and the equity traded flat at the €3.03 level. Malta Post remained, for the fourth consecutive session, the day's most liquid and actively traded equity with a grand total of 73,600 shares changing hands across 37 transactions. Once again the equity tried to breach the €0.65 level but was withheld and finally closed the session at €0.645, which still represents a gain of 1c5 or 2.4 per cent.

Bank of Valletta and HSBC Bank Malta continued to trade lower under continuing general negative sentiment. The former shed 4c9 or 0.8 per cent to terminate at €6.431 while the later saw its price close just slightly weaker at €4.804.

Elsewhere, Grand Harbour Marina closed lower by the slimmest of margins at €1.745 as 2,800 shares were swapped across a single transaction, whilst deals struck in Malta International Airport, Simonds Farsons Cisk and International Hotel Investments did not affect their previous closing prices of €3.21, €2.40 and €1.00 respectively.

UK economic review - weekly round-up

The governor on the Bank of England last week has clearly articulated the downside risks to growth outlook but was reluctant to emulate the aggressive stance taken on by the Federal Reserve.

The BOE rate has tended to move less sharply than the Fed Funds target, and also with a small lag.

The BOE is likely to stay one step behind the curve both so that it is reassured sufficient capacity is building in the economy to offset increasingly acute inflation risks and in order to make it clear to the market that its purpose is to contain inflation rather than shore up growth.

The UK economy slowed in the fourth quarter, but not as sharply as feared. The economy grew by 2.9 per cent year on year in the final quarter of last year, down from 3.3 per cent in the third quarter.

Although this was the slowest pace of growth since the second quarter of 2006, the fourth quarter growth rate could be hardly described as sluggish - the UK's long-term sustainable growth rate is 2.9 per cent.

Indeed for 2007 as a whole, GDP growth was 3.1 per cent well above trend and the fastest pace since 2004 in terms of the pattern of growth; the manufacturing sector stagnated in the fourth quarter, expanding by just 0.4 per cent year on year, while activity in the service sector continued at a robust 3.4 per cent

This article has been prepared by Bank of Valletta p.l.c. (the Bank), which is licensed to conduct investment services business by the MFSA, for your general information only. This information is not a solicitation or offer by the Bank to acquire or sell securities. Nor does it constitute any form of advice by the Bank. Appropriate advice should be obtained before making any such decision. Past performance is not necessarily a guide to future performance and the value of your investments may fall or rise.