Financial news

It was a muted mid-week session at the Malta Stock Exchange with just four equities registering trades. The MSE Index registered a decline of 0.68 per cent to close at 4,222 points which was brought about by further reductions in the two major banks' shares and declines in International Hotel Investments. Activity consisted of just thirteen trades having an aggregate value of €63,377.

Trading in HSBC Bank Malta started late in the session and was made up of 1,605 shares swapped over only two deals, both executed at €3.80. This represents the day's biggest decline of 1.3 per cent from the company's previous trading price of €3.85.

Bank of Valletta suffered a similar fate, though on a higher turnover of 11,077 shares dealt across eight deals which were all executed in the first five minutes of trading. This equates to a 5c decline from its previous trading level, thereby closing at €4.90. All transactions in International Hotel Investments were executed early in the session, with the price ending the day at €1.07. This represents a 0.28 per cent drop on a turnover of 1,800 shares.

A sole trade in Crimsonwing failed to change the price which remained at €0.53 on a volume of 1,888 shares. On Tuesday the company announced that a board meeting will be held on July 15 to approve its annual financial statements for the year ended March 31.

In the fixed interest sector of the market, activity was spread across two corporate bonds and four government stocks with the eight per cent Bank of Valletta 2010 attracting the highest turnover with 64,000 nominal being swapped over one transaction to close at €107.17, while the 5.5 per cent MGS 2023 saw an increase of 0.25 per cent over a volume of 50,000 nominal.

Weekly England economic review

The UK economy wasn't as sprightly as first thought at the start of the year. The British economy grew by 2.3 per cent year on year in the first quarter rather than 2.5 per cent as expected. The report also provided further evidence that household budgets are coming under pressure.

After adjusting for inflation, household disposable income rose by 0.9 per cent year on year while the savings ratio slid to its lowest level for half a century.

Besides the squeeze on income, wealth is also taking a hit as the housing market softens. According to Nationwide Building Society British, house prices fell in June by 6.3 per cent from a year earlier, the biggest drop since November 1992. This is partly attributed to banks which are starving the property market of loans. This was also confirmed by the level of mortgage approvals which fell by 28 per cent on the month, being the lowest in at least nine years during May.

In terms of business activity, June UK manufacturing contracted by the most since 2001, a sign higher credit costs and soaring commodity prices are bringing the economy closer to a recession. On a more positive note, British service sector output expanded in April at its fastest pace since January.

In conclusion, consumer confidence deteriorated to the lowest level in 18 years last month. With rising inflation, gloomy forecasts for interest rates, and soaring fuel, utility and food prices dominating the front page headlines, it is no surprise that Britons consumer confidence in the general economy is almost in freefall.

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.