Financial news

The MSE Index closed slightly in positive territory yesterday, with gainers outnumbering losers on a three to two basis. Activity was relatively subdued, with the day's total turnover in equities just under €208,000.

Continued buying activity in MaltaPost helped the latest listed equity on the Exchange to soar by a further 5c or 6.7 per cent to reach a new all time high of €0.80c. Listed in January, the equity has now gained an impressive 60 per cent since its €0.50c initial public offer, on strong and persistent buying activity.

Simonds Farsons Cisk jumped 6c or 2.4 per cent to reclaim the €2.56c level for the first time since the end of November 2007 as 7,725 shares were purchased across 5 transactions.

At the end of the session, 675 shares remained outstanding with a bid price of €2.56 against 9,480 shares offered at €2.79,5. HSBC Bank Malta, the Index heavyweight, gained 2c or 0.5 per cent to terminate the session at €4.41, while Bank of Valletta, the most liquid and actively traded equity of the day, closed unchanged at €5.70 with buyers and sellers swapping 25,620 shares across nine transactions.

Middlesea Insurance shareholders had a disappointing day as €2.5 million worth of shareholder's wealth was lost on the mere execution of 2,006 shares which were sold down to the €3.50 level. The equity is languishing in its lowest level since April 2005.

Elsewhere in the market, two investors swapped 700 shares of International Hotel Investments at €1.03c4 level which represents a slight discount of 0.48 per cent to Monday's close.

Meanwhile, 4,658 shares of Crimsonwing were exchanged in a single transaction without altering its previous closing price of €0.55c.

Weekly eurozone economic review

Economic data emanating from the euro area remained relatively resilient, notwithstanding the bout of negative economic data stemming out from the United States. The question asked by many market participants is not if the European economy will manage to decouple itself from the US financial turmoil, but when will the European economy bear the brunt. Eurozone employment growth slowed in the last quarter of last year to 0.2 per cent against the previous three months. Quarterly employment growth was 0.3 per cent in the third quarter.

The European Central Bank (ECB) has reiterated once again that its primary objective is inflation at the last committee meeting. Data following the meeting has shown that February Harmonised Index of Consumer Prices was revised up to 3.3 per cent, a new high in the regime of the ECB. The ECB cannot address the upside risks to inflation and use an expansionary monetary policy to weaken a sturdy euro at the same time.

In the question and answer session following the last ECB meeting the President of the ECB, Jean-Claude Trichet hinted that the current foreign exchange situation relates more to a dollar depreciation rather than a euro appreciation. In other words it is up to the Federal Reserve to intervene rather than the ECB.

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.