Financial news

A wide ranging session on the Malta Stock Exchange yesterday saw the MSE Index lose ground to close lower at 4,251, a reduction of over half a percentage point from its previous reading. A total of 12 equities traded during the session which saw 32 deals being struck with the two largest banking sector components being the main drag on the Index.

Trading in International Hotel Investments commenced late in the day with deals being executed at a slightly lower price than previously traded, only to trade higher towards the end of the session and end the session nine-tenths of a cent higher at €1.073 with a turnover of 6,724 shares dealt across three transactions.

RS2 Software managed to post in some further gains as it inched marginally higher by 0.62 per cent with just 500 shares being swapped between two investors at €0.815.

A sole transaction for 2,450 shares executed early in the day on Simonds Farsons Cisk shares caused the price to edge higher by 1c to close at €2.76. After an absence from trading of over two weeks, Plaza Centres registered two deals carrying 5,300 shares, thereby pushing the price higher by 0.29 per cent over its previous trading levels to close at €1.73.

Grand Harbour Marina shares clinched a five-tenths of a cent gain during yesterday's session as the equity terminated the trading day at €2.05.

Early trading activity in Go saw the quadruple telecommunication player loose further ground as it shed 5c to see the day of at €2.55.

The major banks acted as the main catalysts to yesterday's downbeat session. Bank of Valletta dropped 3c to €4.95 while HSBC Bank Malta lost 5c to close off at €3.85.

Meanwhile, a sole trade in Malta International Airport of 800 shares towed the price lower by 1c or 0.32 per cent, pricing the company at €3.11 per share.

The highest turnover was registered in Crimsonwing, where 20,900 shares failed to alter the price of €0.53.

FIMBank and Maltapost were among the non-movers, leaving their respective previous market prices at $1.89 and €0.83.

Weekly eurozone economic review

This week's news certainly did nothing to alleviate concerns about the precarious inflation outlook. Worst still, the growth outlook within the eurozone continued to darken.

Inflation surged to a surprisingly record high of four per cent in June, representing a leap from May's 3.7 per cent moving further from the European Central Bank's (ECB) target of just below two per cent. Germany, which is the largest economy within the eurozone, saw inflation rise to 3.4 per cent in June while Spain's inflation reached 5.1 per cent representing a series high. The new inflation rate cements expectations of a European Central Bank interest rate hike in the next ECB meeting despite slower economic growth. The meeting is scheduled for tomorrow.

Meanwhile, the measure of sales activity in the euro region declined in June within contraction territory. Sales fell across Germany, France and Italy. A measure of employment also fell to 48.6 in June, staying below 50 for a third month.

Similarly, eurozone economic sentiment dropped more than economists forecast in June, led by weaker confidence in all sectors except services. Consumer confidence in France fell heavily to a new 20-year record low in June as fast inflation eroded household purchasing power. Italian business confidence slumped in June to the lowest in almost three years as slowing economic growth, rising energy cost and a stronger euro weighted on orders. Besides, the latest Purchasing Managers Indices (PMIs) moved into territory that signalled contraction for the first time in five years.

On a more positive note, eurozone industrial new orders turned out much stronger than expected in April, jumping by 2.5 per cent month on month for an 11.7 per cent year on year increase.

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.