Financial news

During yesterday's session, the MSE Index continued its decline, falling by 0.68 per cent to close at 4,229 points. The day's trading consisted of 27 deals spread over seven different equities, with an aggregate value of €87,874 of euro-denominated equities and $6,129 in FIMBank, the only US dollar-denominated share on the local exchange.

FIMBank gained just over half a percentage point when 3,243 shares were exchanged over two trades at $1.89, one cent higher than its previous closing price.

MaltaPost was the other equity that closed the day in positive territory, moving higher by 1c, which equates to a 1.3 per cent increase. Turnover here was made up of 5,306 shares which were traded at €0.77. Trading in HSBC Bank Malta started at €3.76 thereby opening 4c lower than the previous close. Continued selling activity pushed the price lower to close at €3.72, which translates into a drop of 2.1 per cent. Activity consisted of 6,621 shares traded over nine deals, having a total market consideration of €24,758.

Go dropped 0.2 per cent to close at €2.79c5 on 1,060 shares spread over three trades. Malta International Airport slid by the lowest of margins, causing the equity to close at €3.11 on a sole transaction of 2,900 shares.

Bank of Valletta was the most liquid component, though this activity failed to move the price of €4.85c1.

Simonds Farsons Cisk's share price closed unchanged when 5,000 shares were exchanged over two deals at €2.71.

Weekly US economic review

The Fed minutes for the April Federal Open Market Committee (FOMC) meeting indicated that in terms of growth, policymakers painted a fairly bleak outlook for the housing sector and noted evidence that tight credit conditions were leaking into other sectors of the economy. The minutes also noted general discomfort toward the inflation outlook. Policymakers commented that in order for inflation to moderate, food and energy prices had to level out, and also that it was critically important that inflation expectations remained reasonably well anchored. The minutes also suggested that the Federal Reserve is firmly on hold.

Meanwhile, in terms of data releases, leading economic indicators continue to suggest further economic deceleration in the US notwithstanding a slight increase in both March and April following five consecutive months of decline. This will inevitably increase economic slack and in turn impact such index components as jobless claims, manufacturing workweek, new orders for capital and consumer goods and consumer expectations.

The April Producer Price Index (PPI) posted an increase in headline inflation though the core rose more aggressively. The stages of production data showed evidence of increasing pipeline inflation pressures. It appears that price pressures are not being passed to consumers. Though this is positive for inflation, it will hurt profit margins.

The May employment survey revealed that initial jobless claims fell, while the inventory overhang seems to be one of the biggest problems weighing on the housing market in the US.

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.