Financial news

Trading in equities remained brisk during yesterday's trading session at the Malta Stock Exchange, with weakness in the second largest equity dragging the Index lower by 0.5 per cent, to terminate the session at 4,825 points.

Bank of Valletta was the day's top decliner as 22,564 shares were sold across 22 transactions, squeezing the price down by 15c2 or the equivalent of 2.5 per cent to €5.99,8, its lowest level since October 2005. The equity has lost 14 per cent of its value since the allotment of a bonus share for every 4.92581 held on January 15, 2008. This also coincided with a marked increase in supply and selective buying activity following a cheerless interim director's statement a few days later.

On the contrary HSBC Bank Malta, the largest company by market capitalisation, registered its seventh consecutive session without declines as 17,170 shares were purchased across 12 transactions thereby pushing the price higher by 0c5 or 0.1 per cent to €4.75. HSBC Bank Malta will be reporting its full year results and final dividend proposition following the trading session of February 18.

The other two banking equities were also involved in the day's trading with a single transaction in Lombard Bank confirming its current valuation of €13.00 per share, and 17,600 shares in FIMBank being swapped down to the $1.999 level which represents a one per cent discount to its previous closing level.

Maltapost remained the most liquid equity with a grand total of 25,415 shares being swapped throughout the session. The equity closed lower by the slimmest of margins at the €0.66 level.

Elsewhere in the market, activity struck in International Hotel Investments, Go and Malta International Airport did not alter their previous closing prices of €1.05, €3.03 and €3.17, respectively.

Eurozone economic review - weekly round-up

In the eurozone clouds continued to gather as services Purchasing Managers' Index (PMI) fell to 50.6, the lowest level in four-and-a-half years.

France was the only major economy to record growth, while the PMIs in Germany, Italy and Spain all implied a contraction (that is below the 50-level mark).

The slowdown in services relative to manufacturing in recent months may be indicative of weakening domestic demand which is a worrying trend given that the global backdrop is becoming more challenging. Moreover, this impression is reinforced by data from the retail sector, which suggests that sales in the eurozone fell by 1.1 per cent.

The European Central Bank has softened its tone and rate cuts now look more likely, though not for a few months. Indeed, in the last press conference after leaving interest rates unaltered at four per cent, President Jean-Claude Trichet subtly opened the door for lower rates. Weighed against last month's comments, he admitted that there were now increased downside risks to growth emanating from international financial crises. Mr Trichet confirmed the council's intention to remain predictable with regards to interest rate movements. On the other hand, inflation up at 3.2 per cent per annum, is set to move even further away from the ECB's "close to but below two per cent" target in the coming months.

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.