Financial news

In yesterday's session at the Malta Stock Exchange, the MSE Index closed in positive territory, primarily due to gains registered in the two major heavyweight banking components and Malta International Airport, which cancelled out declines in two other equities. The Index closed 0.2 per cent up to read 4,233 points. The day's trading consisted of 41 deals spread over six different equities, with an aggregate value of €190,728.

Trading in HSBC Bank Malta started right at the opening bell, with trades executed at the previous closing price of €3.80. Trading continued at this price and at €3.801 up to the last moments of trading when a low volume transaction was executed at €3.82, thereby closing higher by 0.53 per cent. Turnover here consisted of 10,206 shares and was spread over 14 deals.

Two trades amounting to 1,460 shares executed towards the end of the session in Malta International Airport pushed the price higher by 0c5 or 0.16 per cent to close at €3.12.

Bank of Valletta was the most liquid and actively traded equity of the session with turnover consisting of 24,564 shares which changed hands over 18 transactions. The equity started trading at €4.71, reaching an intra-day low of €4.70, only to recoup this decline and close slightly higher at €4.75.

Interest in International Hotel Investments to the tune of 4,000 shares failed to move the equity's price, therefore closing unchanged at €1.073.

Lombard Bank and Go both had a negative session, going down to close at €3.05 and €2.739 respectively.

Weekly US economic review

US data this week signalled a stabilisation in the manufacturing sector, with an upward revision in the first quarter Gross Domestic Product (GDP), along with improved durable good orders, excluding transportation related items that tends to be very volatile. Business fixed investment spending has followed an uncommon route in the current economic cycle, being flat rather than down.

Despite this, the first glimpse of corporate profits in the first quarter was worrying. Operating profits were up in the quarter, but domestic profits were essentially flat and are down significantly from a year ago. Profits earned overseas remained robust though the momentum is slowing. The strength in overseas growth is keeping the economy from shrinking as American manufacturers struggle with the slowest economic growth seen in the past seven years, along with the doubling-up in oil costs in the past 12 months.

Consumer confidence has stayed depressed, with the Conference Board's May Consumer Confidence at its lowest reading since 1991. The collapse in consumer confidence suggests that the effects of the fiscal stimulus in terms of tax rebates will be temporary. Besides, the Jobs Plentiful Index slumped, while the Jobs Hard to Get component rose slightly.

New home sales rose unexpectedly in April, despite the month's supply of unsold homes declined slightly though at elevated levels. Meanwhile, the increase in foreclosures, possibly reaching 1.5 million this year, will put an increasing pressure on supply availability. This is causing a continuation of large declines in national price trends.

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.