Financial news

Following two positive sessions at the Malta Stock Exchange, the MSE Index closed half a percentage point lower at 4,209 points. Turnover consisted of 22 trades being executed over eight different equities. Out of the eight equities, a total of five components traded in negative territory.

Lombard Bank registered the biggest decline, losing 1.64 per cent on a sole trade of 3,000 shares. The equity closed at the €3 level.

Go was also under pressure when two deals for a total volume of 750 shares were struck at the beginning of the session. This activity dragged the price down by 3c9 which is equivalent to a 1.42 per cent drop. The equity closed at €2.70.

Selling pressure caused Bank of Valletta to shed just over one per cent, with six deals totalling 4,950 shares being executed in the first 15 minutes of trading, thereafter closing at €4.70.

Early trading in Middlesea Insurance to the tune of 14,806 shares brought about a drop of 2c in the price to close at €3.41.

HSBC Bank Malta suffered a similar fate, also losing 2c and closing at the €3.80 level. Turnover here consisted of 1,500 shares exchanged over three transactions.

FIMBank started trading lower by 0c4 at the beginning of the session, only to recoup this loss and close unchanged at $1.889.

Interest in Malta International Airport and Simonds Farsons Cisk failed to see the respective closing prices of €3.12 and €2.71 being changed.

Weekly eurozone economic review

In the European continent, all eyes were fixed on inflation, given record high oil and other commodity prices. Across the eurozone, inflation moved back up to 3.5 per cent in May from 3.3 per cent in April. Germany, the region's largest economy, also saw a jump in inflation at three per cent in May. Prices were also marginally higher in Italy at 3.7 per cent. Increasing inflation is impacting consumer confidence and is eating into retail sales. In fact, consumer confidence dipped to its lowest level in almost three years across the euro area.

A 'north-south' divide is emerging in the eurozone with continued signs of resilience in Germany relative to Italy and Spain. In May the ZEW survey recovered to its highest level since January while the IFO survey remains close to historic highs. In Germany retail sales fell for the second month running in April, though the decline slowed to -1 per cent year on year from -6.8 per cent in March. On the negative side and to the market's disbelief, German unemployment unexpectedly increased in May for the first time in more than two years with oil prices and strong euro weighing on the country's exports.

The Purchasing Manager Index for the manufacturing sector eased, though still above the median number forecast by economists. This index points towards slower growth in the euro area. Despite this, the first quarter Gross Domestic Product (GDP) beat economist expectations.

In conclusion, on the corporate site, European data remained more positive with a fast May business sentiment according to the European's Commission survey. The survey highlighted that confidence in manufacturing was unchanged but edged up in the service, construction and retail sectors.

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.