Financial news

A late surge in HSBC Bank Malta helped the MSE Index close 0.9 per cent higher at 3,973 points during the first trading session of the week, as investors returned to the market with a buying appetite following the long weekend break.

HSBC Bank Malta gained deep into the session as the lack of supply forced the hand of buyers who upped their bids by 11c or 3.3 per cent to collect shares on offer at €3.39. At the end of the session, 3,000 shares remained outstanding on the bid side at the €3.33 level, while a further 51 shares remained unfilled on the offer side at the day's closing price of €3.39.

Similarly, Bank of Valletta commenced trading towards the end of the session when a single investor purchased 6,000 shares across three transactions, moving the price higher by the slimmest of margins to close the day at €4.70.

Elsewhere, FIMBank, the trade finance specialist, saw 800 shares changing hands across two transactions without altering its previous closing price of $1.909.

Maltapost was the day's top gainer as well as the most liquid and actively traded equity with 114,948 shares, carrying a market consideration of €91,944 being exchanged across six transactions. This buying activity helped the equity gain 3c or 3.9 per cent to reclaim the €0.80 level for the first time since mid-July.

International Hotel Investments was the only equity to terminate the session in negative territory following the sale of 19,850 shares which was spread across five transactions. The equity terminated the session at €1.05, a discount of 1c or 0.9 per cent relative to Friday's closing price.

Elsewhere in the market, buying activity in Go cleared a further 11,350 shares off the supply side. The equity tentatively moved higher by 0c5 but closed unchanged at the €2.30 level.

Weekly US economic review

The economic release this week was rather grim, confirming once again that the US economy is treading water.

Business across the US was slow during the month of August while almost all Federal Reserve districts reported pressures to raise prices. This pictures a troubling US economy as growth weakens and at the same time inflation pressures remain elevated despite the recent fall in energy prices.

US manufacturing shrank slightly in August, slipping to 49.9 from 50.0 in the prior month, being the dividing line between expansion and contraction. The gains in exports are keeping factories from stumbling as the broader economy slows. The fear is that the boost from exports, which kept the economy afloat amid the housing slump and fading impact of Federal tax rebates, may recede as economies in Europe and Japan are also weakening.

The August employment report continued a string of job losses that is unlikely to abate any time soon. August payrolls were down by 84,000, the eighth month in a row, besides 58,000 in downward revisions to the previous two months. Private payrolls were even weaker, down by 101,000. The tumbling payrolls led the unemployment rate to the highest level in almost five years, reaching 6.055 per cent last month. There exists little evidence suggesting that the labour market has hit a bottom as yet, which raises the likelihood the Federal Reserve will postpone any increase in interest rates until next year.

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.