Financial news

During the mid-week session at the Malta Stock Exchange, investors continued to show interest in the two most capitalised companies on the exchange, namely HSBC Bank Malta and Bank of Valletta, which continued to recoup in value following months of selling activity. As a result the MSE Index gained 0.8 per cent to terminate at 3,877 points.

Bank of Valletta was the day's best performing equity with 18,625 shares being purchased across 16 transactions. The equity gained 16c or the equivalent of 3.6 per cent clearing all supply up to the €4.58 level and leaving, at the end of the session, 5,000 shares best bid at €4.50 against supply of 902 shares offered at €4.61.

HSBC Bank Malta was the day's most actively traded equity with 37,800 shares being struck across 17 transactions. The equity wobbled slightly as initial supply was met by a constant flow of demand which helped the equity close higher by 1c5 of 0.5 per cent at €3.20.

A single trade in FIMBank saw two investors swap 122,000 shares at the $1.91 level, which represents a 2.4 per cent discount to its previous trading price. During the session, the equity commenced trading without the right to receive an extraordinary net dividend of approximately $0.033 per share; investors can also opt to receive as a scrip dividend at the price of $1.60 per share.

Lombard Bank Malta continued its streak of consecutive trading sessions as a further 5,822 shares were exchanged across three transactions without altering its previous closing price of €2.97.

A single trade in Go helped the equity price of the quadruple play telecommunications provider increase by 3c or 1.4 per cent as 1,100 shares were exchanged at the €2.23 level. At the end of the session, a further 3,000 shares remained unsatisfied at this price on the bid side while supply of at least 5,000 shares was best offered at €2.30.

RS2 Software decreased by the slimmest of margins, as 2,400 shares were purchased across two transactions from shares offered on the market at the €0.829 level, while Malta International Airport terminated the day unchanged at €2.95 on the negotiation of 3,200 shares.

Weekly UK economic review

The housing market in the UK continues to weaken, as mortgage approvals hit a new cycle low suggesting house prices will remain under pressure. In fact, according to Nationwide, British house prices fell for the tenth month in August, down almost two per cent since July. The annual rate of decline accelerated to 10.5 per cent, the only double digit decline since Nationwide started collecting data in 1991.

In an effort to revive the UK economic slump, Prime Minister Gordon Brown is implementing a rescue plan aimed particularly at reviving the housing market. Residential property costing less than £175,000 will be exempt from stamp duty. Also the government brought forward one billion pounds of spending to assist people struggling to meet mortgage payment and first time buyers.

The comments put forward by the Chancellor of the Exchequer Alistair Darling over the weekend whereby he admitted that the UK is going through its worst economic downturn post-war adjustment, threaten to overshadow the measures to revive the housing market aimed at assisting poor households to cope with rising energy bills.

The manufacturing sector in Britain continues its declining trend as the sector shrank for the fourth month in a row in August on the back of lower local and foreign demand. The figures, although better than expected, still point to a marked slowdown and will strengthen the predictions that the economy may be heading for a recession.

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.