Financial news

Following a relatively active and positive start to the week at the Malta Stock Exchange, the MSE Index gained 0.43 per cent to close at 4,146 points over a total of 40 equity trades executed.

The oldest and second largest index component on the Index acted as the main catalyst for today's positive showing.

Bank of Valletta was seen trading positively throughout the session, starting off the session on a positive note. Subsequent buying interest continued intraday, with a total turnover of 14,604 shares dealt over 23 transactions, pushing the price up to €4.85, which represents an increase of 11c1 or 2.34 per cent.

Crimsonwing gained four percentage points when 17,500 shares were exchanged over two trades, pushing the price higher to close at €0.52. Grand Harbour Marina traded higher by the slightest of margins, ending the session at €2.05 with a total volume of 10,300 shares exchanged over 3 deals.

FIMBank dropped nine tenths of a cent on the largest volume of shares traded on the day. The dollar denominated equity closed at $1.88. A sole trade in Medserv consisting of 2,000 shares trimmed the price by 5c4 which equates to a loss of 1.34 per cent to close at €3.99.

A comparatively low volume of 2,620 shares in HSBC Bank Malta failed to alter the previous price level of €3.60. Malta International Airport was the other non-mover with just 300 shares being dealt across a transaction at the price of €3.12.

Weekly US economic review

The Federal Reserve commented that economic growth was 'generally weak' in April and May as consumer spending slowed, while manufacturers in several regions passed on higher raw material costs to the consumers. Seven of 12 regional Fed banks reported a softer, slower or modest expansion.

Concurrently, the Federal Reserve upped the inflation rhetoric by another notch. In his own words, the Federal Open Market Committee will strongly resist an erosion of longer term inflation expectation".

In terms of data, May retail sales were much better than expected, registering an increase of one per cent in the month. The strength in the numbers suggests that consumer spending is holding exceptionally well despite big headwinds.

It suggests also that the tax rebates appear to be bolstering household spending. However, the rebates will fade later this year exerting a squeeze on household cash flows given the higher gas and food prices. Meanwhile, inventories at US businesses increased less than sales in April, a sign that companies may be inclined to cut production.

The Consumer Price Index (CPI) for May rose by 0.6 per cent to 4.2 per cent year on year , slightly more than forecast on the back of record oil prices. Core prices which exclude food and energy increased 0.2 per cent in May from April matching economists' forecasts.

Consumer confidence among US consumers fell to the lowest level since 1980 in June, hurt by record gasoline prices and a rising unemployment rate.

Finally, the US trade deficit widened in April as the surge in oil prices propelled imports to a record, overshadowing the biggest gain in exports in four years.

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.