Financial news

Activity was muted at the Malta Stock Exchange yesterday, with the MSE Index losing the 0.4 per cent gain made during the start of the week to close at 4,129 points. Crimsonwing was the only gainer on the day as losses in the largest index component dragged the index lower.

Crimsonwing gained 2c or 3.8 per cent to €0.54 following a broker's meeting during which management shed light on the company's recent acquisition of VDA Informatie beheersing BV, a Dutch IT software and services business for €1.9 million. VDA enjoys a strong presence in the Dutch broadcasting and media sectors, and should contribute for substantial proportion of Crimsonwing's euro denominated revenues going forward.

The first trade in HSBC Bank Malta was executed at the opening bell at an unchanged price of €3.60, subsequent trading in the equity trimmed 2c from the previous closing price to settle at €3.58 at the end of the session. A sole trade in International Hotel Investments of 1,500 shares saw the price trade lower by 1.42 per cent to read €1.045.

Buying interest in Bank of Valletta was met by the supply side of the market at a price of €4.85, with the equity trading momentarily 1c higher, only to close unchanged over a total volume of 8,035.

Low volume trades in Malta International Airport and Maltapost failed to alter the previous closing price of €3.12 and €0.80 respectively. FIMBank failed to trade following Monday's backdated announcement that Menafactors Ltd, a company authorised and regulated by the Dubai Financial Services Authority had become, with effect from May 29, an indirect fully owned subsidiary of the trade finance specialist FIMBank.

Weekly eurozone economic review

European Central Bank President Jean-Claude Trichet has been pretty vocal about his concerns over a de-anchoring of inflation expectations.

"Medium term stability is essential, not only because it protects the income of all our fellow citizens, especially the most vulnerable and the poorest, but also because it is a condition required for growth and job creation," according to Mr Trichet.

Real economy data flow in the eurozone was relatively mixed. Industrial production unexpectedly rose by 0.9 per cent in April, to 3.9 per cent year on year as gains in France and Italy countered weakness in the region's largest economy, Germany.

Meanwhile, in Germany, exports soared more than expected in April led by demand from countries outside the European Union while wholesale prices soared by 8.1 per cent from a year earlier, the highest level in the past 26 years.

Investor morale in the eurozone unexpectedly improved in June as current economic conditions were viewed more favourably despite surging oil prices and the strength of the euro. However, German investor confidence dropped to the lowest in more than 15 years in June.

Labour cost rose 3.3 per cent in the first quarter compared with a 2.9 per cent increase in the previous three months on the back of faster inflation. The acceleration in labour cost growth suggests that inflation is feeding through the economy.

In conclusion, surging food and energy prices drove eurozone inflation to a new record high of 3.7 per cent year on year in May.

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.