Financial news

The Malta Stock Exchange started the week in the red at 3,797 points, a reduction of 0.25 per cent from its previous reading, with relatively low volumes across seven trading equities.

Crimsonwing stole most of the limelight when early trading to the tune of 13,054 shares caused a decline of 1.89 per cent, thereby closing at €0.52.

Trading activity in HSBC Bank Malta consisted of six deals amounting to 3,000 shares, with the price trading down at €3.12, equating to a 3c or 0.95 per cent reduction on previous trading levels.

A sole trade in Malta International Airport consisting of 1,000 shares depressed the price by a mere 0c1, the smallest possible decline to close at €3.039, still placing as the sixth largest component on the local equity market with a market capitalisation of €205.5 million.

With a comparatively reduced traded volume of 1,410 shares, Bank of Valletta shares closed 1c higher, equivalent to a gain of 0.24 per cent, to close at €4.16.

Lombard Bank Malta registered a marginal positive close, with the price moving higher by 0.03 per cent, when two investors swapped a mere 345 shares to close at the €2.90 level.

Slight interest in FIMBank for 600 shares failed to change the closing price of $1.886, a fate similar to that of Maltapost which also closed unchanged when 2,000 shares were exchanged in a single transaction at €0.75.

In the fixed interest sector of the market, activity was spread across one corporate bond and nine government stocks with the five per cent MGS 2021 attracting the highest turnover of 664,687 nominal, while the Fungible Issue of the said MGS registered the biggest percentage gain of 1.72 per cent, moving higher to close at €98.87.

Weekly US economic review

The Consumer Price Inflation (CPI) figures stole most of the limelight during the past week as July CPI came in worse than expected in both the headline figures at +0.8 per cent and core (excluding food and energy prices) at +0.3 per cent, thereby pushing the headline inflation to 5.5 per cent year on year. This equates to the fastest pace since January 1991. Food prices were surprisingly high, surging 0.9 per cent on the month. The culprit in the inflation core figures for this month was a broad-based increase in goods prices.

On a more positive note, a number of economists are holding that inflation should be very much near its peak and expect it to slow in the coming months. This should give the Federal Reserve more leeway to address economic growth prospects. Nonetheless, recent data suggests that the second quarter real (excluding inflation) Gross Domestic Product (GDP) growth may be revised up. Exports have been the main pillar supporting the US economy in the last couple of quarters, but after the strengthening of the greenback further export-oriented support has come into question.

In fact one of the biggest changes in the past few weeks has been the dollar's appreciation. The dollar has moved out of the 1.53 - 1.60 range versus the euro occupied since March 2008 and is now trading in the range of $1.47 for every euro.

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.