Financial news

The Malta Stock Exchange Index lost a hefty 2.3 per cent to close at 4,059 points yesterday, as the market reacted to HSBC Bank Malta's mid-year results issued last Friday. The day's activity on the equity market reached a spread of 43,826 shares with 33 deals executed across five listed equities.

HSBC Bank Malta succumbed to selling pressures as 16 investors reduced their exposures to the largest equity by market capitalisation on the local exchange. Last Friday's set of results poured further negativity into the market as the equity shed 6.79 per cent or 25c8 on an aggregate volume of 14,720 shares, to close at a yearly low of €3.54c2.

Bank of Valletta suffered a 0.45 per cent decline as 4,935 shares were sold over six deals down to the €4.599, after trading at an intra-day low of €4.55, which also equates to a yearly low.

Trading in Go consisted of a total of 8,100 shares changing hands across five transactions at the previous going price of €2.51, only to later move marginally lower by 1c. This was enough for the equity to close 0.4 per cent down leaving 800 shares best bid at €2.50 against a supply of 62,960 shares at €2.55.

On the positive side of things, FIMBank's share price closed higher by 0.27 per cent at $1.88 as 11,600 shares were swapped over four transactions, while International Hotel Investments registered an increase by the slightest of margins, ending the day at €1.061.

In the fixed interest sector of the market, activity was spread across four corporate bonds and five government stocks. Both the 4.8 per cent MGS 2016 (II) and the 7.8 per cent MGS 2018 attracted a turnover of one million nominal each, registering a decrease of 0.24 and 0.28 per cent respectively, while the 5.1 per cent MGS 2022 decreased by 1.54 per cent to close at €96.49.

Weekly US economic review

Consumer sentiment improved to 61.2 per cent in July from 56.4 per cent in June. Although sentiment has improved, it is still below the low of the past two recessions. This increase in sentiment was likely triggered by the recent drop in energy prices and delivery of the tax rebate. However, the weakening labour market, falling home prices and turbulent financial markets continued to weigh on consumer moods.

About 60 per cent of consumers expect unemployment to rise and about half anticipate that overall living standards will decline in the year ahead. Consumers expect inflation of 5.1 per cent over the next year, likely reflecting still high food and energy prices. In fact, the short term treasuries dropped in prices as near term fears of rising interest rates loomed again over the US markets. Over the next five to 10 years, consumers expect annual inflation of 3.2 per cent down from 3.4 per cent in the previous two months.

New home sales fell 0.6 per cent to 530,000 in June while the previous two months were revised up a net 50,000 homes, slightly above expectations. On a more encouraging note, inventories of homes for sale fell 5.2 per cent to 426,000.

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.