Financial news

Following the weekend break, the MSE Index traded practically flat to close the day at 4,500 points. Activity was struck in only six equities with a total of 28 trades being concluded.

The only positive trend was registered in Lombard Bank Malta, where a sole low volume trade helped the price jump by 20c or 1.5 per cent to close at the €13.20 level. At the end of the session, 10,784 shares remained outstanding on the offer side at this level against demand of just 120 shares at the best price of €13.

FIMBank, the US dollar quoted trade finance specialist, shed 1c as 7,850 shares changed hands across four deals pushing the price back down to the $1.91 level.

Activity in HSBC Bank Malta caused the price to drop by 1c or 0.2 per cent to €4.19 across a total turnover of 6,950 shares traded across seven deals.

Bank of Valletta, which is due to report its interim results following today's trading session, traded flat at €5.19 with investors adopting a wait-and-see approach before committing large funds.

The day's activity consisted in 7,824 shares which were dealt across 12 transactions. At the end of the day, 1,000 shares remained outstanding on both the bid and offer side at €5.18 and €5.19 respectively.

A sole trade of 1,000 shares in International Hotel Investments left the price unchanged at €1.06. On the other hand, three trades totalling 1,715 shares in Malta International Airport also failed to alter the previous closing price of €3.38.

US weekly review

Economic data last week saw another sharp decline in new home sales in March adding to doubts that domestic demand will improve in the near term. The Census Bureau reported that new home sales fell to 8.5 per cent, well below analyst forecasts. The release indicates that the demand has not yet bottomed. The continued weak home sales market poses risk to housing, consumer spending and financial markets, thus delaying any pick-up in domestic consumption.

Elsewhere, initial jobless claims figures indicate that while the jobless claims net report is better than expected, the broader trends point to continued weakening of the labour market. Meanwhile, President Bush announced that the tax rebate stimulus package will start going out this week, earlier than previously announced, and should help Americans cope with gasoline and food prices, as well as aid a slumping economy by boosting overall consumer spending.

At this week's two-day Federal Open Market Committee (FOMC) meeting, market participants are pricing in a modest 25 basis points cut, following financial market cues indicating a need for monetary policy patience.

While economic releases remain weak, increasing concerns on the inflation front, along with worries that further steep dollar declines are not helpful to the United States or world economies, will induce the Fed to slow or even halt its easing pace.

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.