Financial news

Following a bland session on the Malta Stock Exchange on Wednesday, the MSE Index moved down by four points to read 4,159. This was achieved through 14 equity deals spread over 4 listings with a total turnover of just 10,470 shares carrying a consideration of €36,021.

Maltapost lost the 1c gained on the previous day when two investors swapped 2,000 shares at €0.80. At this price the market capitalisation of the local post operator stands at €22.4 million. At the end of the session 3,000 shares were best bid at the €0.80 level while 9,274 shares remained outstanding on the offer side at €0.812.

Having traded sideways during the previous session, HSBC Bank Malta registered a decrease of 0.26 per cent when 3,640 shares were swapped over 5 trades, with the equity closing 1c lower to €3.79, having traded earlier up to a daily high of €3.81. On the 25th July the company will announce its interim results for the period ending 30th June, 2008.

Bank of Valletta was the day's most liquid and actively traded equity with a total of 3,737 shares being exchanged across 7 transactions. The equity opened lower by the slightest of margins, recouping this later on and thereafter closing unchanged at €4.67.

A single trade in Lombard Bank failed to change the price which remained at €2.90 on a volume of 1,093 shares. The bank will make its interim results public in the last week of August.

In the fixed interest sector of the market activity was restricted to just one government stock. The 7.8% MGS 2013 attracted turnover of 4,659 nominal and registered an increase of 0.07 per cent.

Weekly UK Economic Review

Predictability is one of the main pillars of any central bank. Most if not all interest rate decisions taken by the respective authorities would be nearly or fully priced in by the time the decision is actually announced. This was also the case for last week's Bank of England (BOE) meeting, where the Monetary Policy Committee (MPC) left interest rates unchanged at 5 per cent, as expected.

The MPC is struggling to juggle between economic growth and inflationary pressures as signals coming out from the British economy are alarming on both counts.

British producer prices increased at a much larger pace during the month of June as manufacturers are passing the burden of record oil costs on consumers who are already feeling the burden of higher food costs and tighter credit. This is also exerting a pressure on consumer prices whereby Britain's inflation rate nearly doubled the Central Bank's 2.0 per cent target rate during the month of June. Consumer price inflation rose to 3.8 per cent from 3.3 per cent in May.

Certainly, the outlook for the economy is deteriorating. The darkened economic outlook featured also in the consumer confidence survey which fell for a sixth month running in June.

This week's bout of negative data culminated on Wednesday as the number of Britons out of work and claiming benefits rose for a fifth month running in June and by its largest amount since the slump of the early 1990s.

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.