Financial news

The MSE Index lost 0.2 per cent to close 4,851 points during yesterday's trading session at the Malta Stock Exchange, across 51 deals being struck in the equity market. This drop has been fuelled by a downbeat performance by the oldest local banking equity.

Bank of Valletta, having previously traded at the €6.249, started trading lower at the opening bell, immediately losing close to 4c and continued sliding down to an intraday and yearly low of €6.10. However, this level proved too tempting for certain investors who then bought into the equity helping the equity recoup €0.05 to close the day at €6.15. The day's total activity consisted of 10,669 shares which were swapped across 16 trades.

On the other hand, trading activity in HSBC Bank Malta was affected on a more bullish sentiment where initial trades were executed at the €4.73 level and continued gaining to close at €4.745, increasing 2c or 0.4 per cent with a total of 6,748 shares switching hands over 10 deals.

A sole trade of 1,640 shares in Plaza Centres pushed the price higher to close at the €1.60 level, closing as the day's top gainer, with an increase of 6c34 or 4.1 per cent.

Trading activity in Malta International Airport of 3,500 shares over two transactions did not alter the previous price level of €3.17.

Although remaining the most active equity on the local market with 38,077 shares being traded over 21 deals, traded volume in Maltapost has moderately diminished, when compared to the number of shares traded over the past weeks. This has slightly diminished the price to close at €0.661, or 0.6 per lower.

Crimsonwing dropped half a percentage point to close at €0.597 over 2,000 shares with a single trade.

US economic review - weekly round-up

Recession or not recession? That is the question currently nagging most economists around the world. Finance leaders from the Group of Seven industrialised countries said in a statement issued last Saturday in Tokyo, that the United States economy will likely avoid a recession this year and that its long-term fundamentals remain sound, although more downside risks exist. The downside risks highlighted were the further deterioration of the US residential housing markets and tighter credit conditions from prolonged difficulties in the financial markets.

Recent economic data has certainly pointed to a more doom and gloom scenario. More bad news is likely to follow with slower consumer spending, abating labour markets and low business and consumer confidence. On a more positive note, George W. Bush said on Friday that he will sign a $152 billion stimulus bill aimed at reviving a stagnate economy.

On top of that, if the Federal Reserve takes the fed fund rate to 2.5 per cent at the March 18 Federal Open Market Committee as it is widely expected by market participants, the real fed fund rate (adjusted for inflation) would go to zero; this is as long as the Consumer Price Index (excluding food and energy) which is presently hovering around the 2.5 per cent level stays at the current level.

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.