Financial news

An active session at the Malta Stock Exchange yesterday was restricted to trading in just four equities with a total of 58 deals being executed for an aggregate value of €169,488. The MSE Index closed down by a slight margin of 0.8 per cent to end the session at 4,145 points.

A high turnover in Maltapost to the tune of 22,091 shares saw the equity trade up to an intra-day high of €0.79. The equity however settled back to the day's opening price of €0.785, equivalent to a 0.64 per cent gain, the only increase registered during the session.

GlobalCapital traded at its lowest level since December 2005 when 2,720 shares were exchanged during mid-session down to €2.70. This represents a 1.82 per cent drop from its previous closing price with no bids present at the closing bell and 1,000 shares best offered at €2.849.

Selling pressures in HSBC Bank Malta caused the equity to trade lower moments after the opening bell. This supply caused the share price to continue its decline throughout the session, ending the day at 9c lower than its previous closing price. Turnover consisting of a total of 15,900 shares which changed hands across 19 transactions, with the price shedding 2.41 per cent to €3.65.

Activity in Bank of Valletta was persistent throughout the session with a total volume of 18,250 shares traded across 29 deals. The equity traded higher at the onset, reaching an intraday high of €4.74, only to lose this gain and close unchanged at €4.69.

Weekly eurozone economic review

The European Central Bank (ECB) kept rates on hold at four per cent as widely expected at a time when overall financial conditions tightened, and when growth is still slowing.

The ECB shocked markets by suggesting that it may raise rates by 25 basis points in July. Altough ECB president Jean Claude Trichet did not use the usual call for "vigilance" to pre-announce a rate hike one month in advance, the tenor of his remarks suggests that an increase in July is more likely than not. Instead it used the phrase "state of heightened alertness" and warned that it would "act in a firm and timely manner" to counter upside risks to inflation and keep inflation expectations well anchored.

On the data front, the Eurozone Services Purchasing Manager Index (PMI) slipped close to contraction in May, in line with expectations, as cost pressures mounted while growth contracted both in France and Germany though still in positive territory. Manufacturing seems to be stabilising just above 50 - only just in expansion territory.

Elsewhere, investor morale unexpectedly improved in June, with the Sentix Group's monthly index reaching 5.2 from 3.5 in May, as current economic conditions were viewed more favourably despite surging oil prices and the strength of the euro. Retail sales portrayed a different picture with a decline of 2.9 per cent in April, more than three times than economists' forecasts.

Finally, Gross Domestic Product (GDP) in the eurozone accelerated more than initially estimated in the first quarter as investment and construction spending in Germany helped the region weather record oil prices, euro's gain and market turmoil.

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.