Financial news

The mid-week session at the Malta Stock Exchange was a relatively active one, with trading being registered in eight components and the total number of deals amounting to 58. The MSE Index continued its decline to close at 4,102 points when the only positive close registered in the oldest index component was not enough to balance declines elsewhere.

Bank of Valletta was by far the most active and liquid equity during the day when 35,387 shares were exchanged across 29 deals for a total market consideration of €172,448. Activity here was persistent throughout the session with deals being executed early in the session at the previous closing price of €4.85. Constant buying interest pushed the price up by 5c to close at an intra-day high of €4.90, leaving the best offers standing at the €5 level. International Hotel Investments started trading early in the day, with transactions being struck at a price lower than its previous price. The equity subsequently closed at €1.011 representing a 3.25 per cent decline. Turnover here consisted of 12,645 shares which changed hands over six transactions.

Crimsonwing's share price dropped by 1.85 per cent when two investors swapped 10,000 shares at €0.53. Activity in HSBC Bank Malta, which consisted of 19,900 shares dealt over 12 trades, caused the price to drop by 3c to read €3.55.

A sole trade with a volume of 1,000 shares in Lombard Bank depressed the price by the slightest of margins to close at €3.069.

Total turnover of 15,625 shares in Go left the price unchanged at €2.65. Similarly, Simonds Farsons Cisk and Maltapost remained unaltered with turnover of 788 and 2,000 shares respectively.

Weekly UK economic review

UK Consumer Price index (CPI) rose to 3.3 per cent in May, its highest level since 1992, largely due to food prices along with an acceleration in household energy and fuel price inflation. The surge in headline inflation prompted an open letter from the Bank of England (BOE) Governor, Mervyn King to the Chancellor, Alistair Darling. In the letter the BOE regards the rise in inflation as temporary and as a reflection of global conditions though Mr King believes that inflation could rise more sharply than expected to above four per cent before year end. The BOE letter was more dovish than expected, as it appears that the central bank is hoping it can avoid a tightening policy.

Meanwhile, headline UK wage inflation fell marginally in April to 3.8 per cent, just below the four per cent rate considered consistent with the BOE inflation target. Given the rising concerns over inflation, it was very encouraging that real economy data suggested resilience of consumer activity. Employment in the UK reached another record in April. However, unemployment edged upwards as well as claims for jobless benefits though this is still an issue of increasing supply rather than falling demand.

UK manufacturing production unexpectedly rose in April with a mere 0.1 per cent while producer prices increased in May by 1.6 per cent from April, representing the largest increase in the past two decades.

Elsewhere, the British Retail Consortium showed that annual growth in British retail sales rebounded to 4.6 per cent recovering from a much lower rate in April. In conclusion UK house prices saw to another decline 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.