Financial news

During yesterday's session, the MSE Index saw a slight decline, falling by 0.03 per cent to close at 4,156 points. The day's trading consisted of 21 deals spread over five different equities. Fixed income trading made up for a lacklustre session on the equity market as heavy trading was registered in government stocks.

All transactions in Malta International Airport were transacted in the dying minutes of the session with the share price rising 1.93 per cent over a volume of 3,587 shares at €3.12. Directors of the local airport operator have approved a net interim dividend of €0.06 being paid to registered shareholders as at July 31.

Bank of Valletta also closed higher, having opened at its previous closing price, with the rest of the deals being executed at €4.68 which represents a slight increase of 0.21 per cent, ending the day at the €4.68 level.

Continuing on Friday's gain, FIMBank traded up by the slightest of margins to close at €1.87 over a volume of 8,300 shares exchanged over two transactions. The company will be announcing its interim results for the period ending June 30 in a month's time.

International Hotel Investments was the only laggard for the day, when 6,044 shares dealt across six deals caused the price to drop 0.86 per cent thereby closing at €1.04.

Lombard Bank was the only non-mover for the session, closing at €2.90. After recouping initial losses the equity managed to close unchanged on the exchange of 8,500 shares which were swapped over four deals.

Weekly US economic review

Federal Reserve chairman Ben Bernanke told Congress last week that policymakers are ill at ease with the current rate of inflation despite being also worried that financial market strains are too great to allow them to safely remove accommodation.

The surge in the June Consumer Price Index (CPI) to the highest level for the past 17 years further raises the level of discomfort on the committee.

Meanwhile, the June Producer Price Index (PPI) rose significantly above expectations, largely due to large increases in food and especially energy prices. Even worse, inflation rose at both the crude and intermediate stages, which indicates that there are tremendous price pressures in the inflation pipeline.

The economic backdrop is still showing little signs of recovery in the manufacturing sector as the July Philadelphia Fed survey pointed to contraction in the region's manufacturing for the eighth consecutive month. The details of the report highlight that all of the sub-categories are in negative territory including new orders, shipments employments and unfilled orders.

On the consumption side, retail sales barely rose in June following downward revision to both May and April.

This decline is an indication that the consumer spending is beginning to crack and is likely to pull back sharply later in the quarter.

Housing starts and permits rose sharply in the month of June, however, attributed to a special factor which has distorted the data. Total starts rose 9.1 per cent and permits rose 9.3 per cent.

In conclusion, the July employment survey revealed that employment is still sluggish with an 18,000 increase in jobless claims.

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.