Finanical news

The MSE Index registered its third gain on the trot with investors scrambling to purchase shares following 10 weeks of consecutive declines. This has brought equities down to their lowest level in more than three years.

HSBC Bank Malta was the day's top gainer as 11,950 shares were purchased across 16 transactions pushing the price higher by 7c or 1.9 per cent to reclaim the €3.70 level. Buying activity commenced immediately as the opening bell rung out and the price rose steadily throughout the session, leaving at the end outstanding demand at €3.631 against 1,500 shares best offered at €3.739.

Bank of Valletta was the day's most liquid and actively traded equity with 22,200 shares carrying a market consideration of €110,781, changing hands across 17 transactions. The equity reclaimed the €5.00 level for the first time in six weeks gaining 4c or another 0.8 per cent on the day. The price has climbed by 8.7 per cent in past two weeks after touching a multi-year low of €3.60 in the first week of June.

A single transaction in Grand Harbour Marina saw two investors swap 500 shares at the €2.05 level, which marks a slight premium to its previous closing price.

Go, still languishing in its lowest levels since January 2004, attracted a turnover of 7,700 shares which were swapped across two transactions without altering its previous closing price of €2.60. Similarly, two trades for an aggregate total of 2,400 shares of GlobalCapital were struck at €2.60 without altering the previous closing price.

Single deals in FIMBank and Maltapost saw investors exchange 2,000 shares and 2,033 shares respectively at their previous corresponding prices of $1.88 and €0.83, while Malta International Airport attracted 6,300 shares in turnover which were swapped across three transactions at €3.12.

Weekly eurozone economic review

Council members at the European Central Bank (ECB) continued to signal a hike in interest rates at the next meeting in July as inflation accelerated to a record high. Fears are mounting about the risk of stagflation in the euro zone, as growth cools quickly in the second quarter while oil prices continue to stoke inflationary pressures.

In terms of data, eurozone services and manufacturing activity both fell unexpectedly in contraction in June. The eurozone Purchasing Manager Index (PMI) for services companies slipped below the 50 mark from 50.6 in May to 49.5. Manufacturing also suffered a bruising month, as the eurozone PMI for the sector recorded a drop from 50.6 in May to 49.1 in June, its lowest level since May 2005, hit by weakening demand across the region.

Meanwhile, Germany the eurozone's biggest economy, followed suit as PMI data for this month for both the manufacturing and the services sectors fell. The finance ministry pointed out that German growth would likely slow sharply in the second quarter as firmer inflation weighs on private consumption.

Germany's business and investor confidence dropped this month on record oil prices and the prospect of higher interest rates dimmed the outlook for growth in Europe's largest economy. Producer Price Inflation (PPI) in Germany accelerated to the fastest pace in almost two years during May.

In conclusion, the eurozone unexpectedly swung to a trade surplus in April from a deficit in March, as the region's strong currency failed to subdue exports while imports expanded quickly. Exports and imports both rose 16 per cent, suggesting eurozone economic weakening might not be as deep as many analysts had feared, there again boosting the case for an interest rate hike in the next ECB meeting.

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.