Financial news

During the mid-week session at the Malta Stock Exchange, the Index broke a three-day losing streak, eking higher by 0.9 per cent to terminate at the 4,644-level mark.

Bank of Valletta provided the steam to the MSE's engine as the equity bounced back strongly from two sessions of sharp declines coupled with low volume. The equity immediately commenced trading higher at the €5.50 level and by the end of the session, the equity had recovered a full 25c or 4.7 per cent to close at €5.60. Once again, volume activity was soft with just 2,390 shares struck across 10 deals.

Maltapost gave up some ground as the equity shed 4c8 or five percentage points, after a few investors booked their profits and sold shares to translate the recent exceptional gains into cash. The day's activity consisted of 6,000 shares which were swapped across six transactions with the equity closing the session at the €0.92 level, which nevertheless, still equates to an 84 per cent rise over its January IPO price.

Once again, Go swung back into negative territory losing its previous session's gain to trade at the €3.00 level. The day's activity saw 4,640 shares being exchanged across four transactions.

Malta International Airport was the day's most liquid equity with a grand total of 9,800 shares changing hands across six transactions forcing the price higher by 2c3 or 0.7 per cent to close at the €3.32 level. Nevertheless, at the end of the session 200 shares were best offered at €3.299, while the best bid for an almost similar amount of shares stood at €3.15,1.

Elsewhere in the market, HSBC Bank Malta moved higher by the slimmest of margins to trade at the €4.406, while FIMBank shares recouped 0.6 per cent to close yesterday's session at $1.71. A single deal in 6pm Holdings was struck without altering its previous closing price of £0.70.

Weekly UK economic review

Late last week the Bank of England (BOE) issued the minutes in relation to the last Monetary Policy Committee (MPC). Unexpectedly, two policy members voted in favour of a quarter-point rate cut at this month's meeting, dissenting from the view held by the other seven to keep rates on hold.

There was some concern expressed by the Committee about how back-to-back cuts might be interpreted.

The last thing the BOE would want at the moment is to give the impression that it is moving away from its mandatory inflationary target and focus more on growth.

Moreover, Consumer Price inflation rose to a nine-month high of 2.5 per cent in February (from 2.2 per cent year on year in January). The increase was attributed to sharp increases in the price of food and energy. Both factors are excluded when calculating the core inflation, which is more representative of domestic inflationary pressures and a much preferred tool for policy setters.

Indeed the core inflation rate dropped to 1.2 per cent, the lowest reading since August 2006, which suggests more room for manoeuvre if the MPC opts for any rate cuts.

However, reducing inflationary pressures will have to be accompanied by some easing in activity, which thus far looks to be holding on resiliently.

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.