Financial news

During the mid-week session at the Malta Stock Exchange, trades were executed in five equities and nine fixed interest securities. Dragged lower by its second largest component, the MSE Index lost 0.4 per cent to close at 4,192 points.

Bank of Valletta was the only equity to close in negative territory with sellers dumping 12,796 shares on the best available bids in the market, which supported the price at the €4.60 level, its lowest level in three years. Based on one year trailing figures, Bank of Valletta now has a gross dividend yield of 8.6 per cent, the highest in the banking sector and on the contrary, the lowest price earnings ratio of 13.11 times. At the end of the session, 2,639 shares remained outstanding on the bid side at €4.60 while 9,845 shares were best offered at €4.75. HSBC Bank Malta, the largest locally listed equity, attracted 7 trades which saw 7,850 shares change ownership. The day's turnover amounted to €29,823 with the price wobbling slightly before closing the session unchanged at €3.80.

Three trades for a total of 13,260 shares were struck in FIMBank with all deals being executed at its previous closing price of $1.889.

Middlesea Insurance was the day's most liquid equity with 20,000 shares, carrying a market consideration of €68,200, changing hands across 4 transactions. The equity closed the day at €3.41 leaving outstanding bids at the €3.34 level and offers at €3.51.

Elsewhere in the market, Malta International Airport attracted interest to the tune of 10,400 shares which were exchanged across 7 transactions. Here, buyers and sellers agreed to transfer shares to each other at its previous closing price of €3.12.

Weekly UK economic review

On the surface there was mixed news from the UK housing market this week. The Nationwide House Prices dominated the headlines, reporting the sharpest fall in British house prices, down by 2.5 per cent in April. As for Nationwide, prices have now fallen for seven months in a row producing a total fall of 7 per cent from its peak. On the other hand, mortgage approvals rose according to the British Bankers Association.

Given the rapidly correcting UK housing market along with rising energy and food prices, it was little surprise that the outlook of consumers declined again in May. UK consumer confidence dropped to the lowest level since the 1990s recession, according to the Gfk Consumer Confidence Survey. Economists commented that most people are very gloomy on the economy and about the future. The key question is whether this decline in confidence will feed through to underlying activity.

The CBI's distributive Trades Survey suggests that while retailers remain pessimistic, May was not quite as bad as April. The survey reported a decline in sales by -14 per cent in May from a much worse -26 per cent in April. Despite these figures, retailers are optimistic that sales will recover in June.

In conclusion, Britain's manufacturing sector failed to grow last month for the first time in almost three years while British construction activity dropped last month at its sharpest pace in at least a decade.

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.