Financial news

A single equity decline was enough to drag the MSE Index to close in negative territory for the third consecutive session yesterday, losing a further 0.5 per cent to terminate just a fraction above 4,800 points.

Sustained selling activity in Bank of Valletta was met by guarded buying activity which led to the exchange of 19,458 shares across 18 transactions. Sensing pressure on the offer side, buyers craftily lowered their bid prices to obtain the best possible entry point. By the end of the session, Bank of Valletta's closing price stood at €5.85, which reflects a 14c8 or 2.5 per cent discount to its previous closing level.

FIMBank closed higher by the slimmest of margins as 17,831 shares were exchanged across four transactions with all deals being executed at the $2.00 level. At the end of the session, demand stood for 1,610 shares at the $1.90 level while best supply was of 5,000 shares offered at $2.01.

HSBC Bank Malta which will be reporting its full year results and final dividend proposition following Monday's trading session traded unchanged at €4.75. The day's trades consisted of 13,600 shares which were swapped across six transactions. Similarly, Lombard Bank Malta terminated the session unchanged at €13.

Elsewhere in the market two investors swapped 5,000 shares of GO without altering its previous closing price of €3.03 while as many as 10,030 shares of Malta International Airport were traded over four transactions at the €3.17 level.

Maltapost recouped its previous session's decline as 39,019 shares were traded across 14 deals. The equity managed to touch an intraday high of €0.663, however by the end of the session the price settled down to close at €0.661.

UK economic review - weekly round-up

As it was widely expected the Bank of England (BOE) cut rates by 25 basis points to 5.25 per cent last week. The BOE's accompanying statement was notably balanced in tone.

The statement was mainly split in three parts. The first talked of tightening credit conditions, slowing growth and an eventual downside risk to inflation. The second went on to highlight the upside risks to inflation in the short term due to energy prices, sterling depreciation and higher inflation expectations.

In the concluding paragraph, the bank argued that a slowing growth rate was necessary for inflation to slow down, and for the BOE to meet its medium term inflation target.

The Consumer Price Index rose by less than the market expected, from 2.1 per cent to 2.2 per cent; the market was expecting a figure of 2.3 per cent. The services Purchasing Manager Index (PMI) stood at 52.5 in January, well below the 56 average reading for 2007, but higher than the November and December outturns.

Manufacturing production was flat on a year on year terms in December, after posting a trivial 0.1 per cent gain the previous month. The fact that the pound has weakened significantly against the euro and the dollar in recent months is providing a boost to UK firms' competitiveness at home and abroad.

This may however be of limited comfort, with demand apparently slowing domestically and in key export markets.

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.