Financial news

During the mid-week session of the market, the MSE Index closed lower by three tenths of a percentage as weakness in three equities, offset gains in a similar number of shares.

Simonds Farsons Cisk attracted buying activity for 12,010 shares as soon as the opening bell rung out, which cleared all the supply up to the €2.80 level, its highest price since the end of January 2000. The equity gained 2c or 0.7 per cent and is now only a whisker away from its equivalent all time high of €2.84.

Grand Harbour Marina was the day's top gainer with the equity rallying as much as 10c or 4.9 per cent to €2.15 during a relatively busy day for the equity. In fact the day's turnover consisted of 23,153 shares, carrying a market consideration of €49,565, which were exchanged across 4 transactions.

In the financial services sector, HSBC Bank Malta was the day's only positive mover. Initial selling activity brought the price down to an intra-day low of €3.81, however subsequent buying activity restored parity and even helped the equity close higher by 1c or 0.3 per cent at €3.85.

Bank of Valletta dropped sharply on low volume, shedding 8c4 or 1.7 per cent on a total turnover of 1,850 shares which were swapped across five deals. Lack of bids in the market forced the hand of investors wishing to exit their holdings, which caused the price to decline to the €4.78 level.

FIMBank was also negatively hit by low volume selling activity against a relatively thin bid side. Nevertheless, the trade finance specialist managed to close off its lowest level of the day, at $1.86.

GlobalCapital was the day's worst performer; shedding 10c or 3.8 per cent as 2,000 shares were exchanged across 2 transactions.

Ahead of an analyst meeting called by the company and scheduled for next week, GO traded steadily at €2.60 although outstanding supply on the board remained at the €2.65 level.

Weekly UK Economic Review

British industrial output fell much more than expected in May according to data issued during the week. Meanwhile, the Bank of England's (BOE) quarterly credit survey noted that the credit squeeze for British households and businesses looks set to intensify as lenders brace for rising defaults. The survey showed that default rates on secured lending to households rose by more than anticipated in the second quarter as lenders are expecting a further increase in the coming months.

UK services from banks to airlines contracted last month by the most since October 2001. An index based on replies from 700 service companies fell to 47.1 in June from 49.8 a month earlier according to the Chartered Institute of Purchasing and supply, a reading below 50 signals contraction.

Furthermore during the week under review the UK yield curve has registered a drop in yields, as market participants are pricing in a lowering of interest rates later on during 2008 or early 2009. Increased risk aversion and continued deterioration of economic data upped demand for gilts. According to a poll of 72 economists carried out by Reuters between July 1-3, economists are predicting that the BOEs Monetary Policy Committee will keep rates on hold at today's 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.