Financial news

On a comparatively muted Monday session at the Malta Stock Exchange, the MSE Index registered a decline of half a percentage point, thereby cancelling any gain registered during the last session of the preceding week, and bringing the reading to 3,968 points as on last Thursday. Trading was registered in six components with 37 equity deals for a total aggregate value of €110,633.

Crimsonwing was the day's most liquid equity with a grand total of 45,407 shares changing hands across seven transactions, with the majority of deals being executed at €0.50 and thereafter closing at this price. This represents a 3.4 per cent decline on its previous closing price, leaving 2,721 shares offered at €0.50 and no bids present in the market.

Selling activity in Bank of Valletta to the tune of 7,010 shares over 6 transactions caused the price to trade at a discount of 1.92 per cent, equivalent to a reduction of nine cents with trading taking place in the €4.689 to the €4.60 range, thereby closing at the lower level.

International Hotel Investments suffered a similar fate, though the negative price change stood at 0.94 per cent to close at €1.05. Turnover here consisted in 9,030 shares dealt over three trades. HSBC Bank Malta saw 5,400 shares swap hands across 12 deals, ending the session lower by the slightest of margins at €3.399, after having traded at an intraday low of €3.389.

On the other hand, Lombard Bank and GO both traded higher, closing at €3.075 and €2.31 respectively.

In the fixed interest sector of the market, activity was spread across six corporate bonds and five government stocks. The five per cent MGS 2021 attracted the highest turnover, with 177,118 nominal while registering a price increase of 0.51 per cent, to close at €99.18. Meanwhile the 6.7 per cent Mizzi Organisation Finance saw 50,000 nominal being exchanged at €101.

Weekly eurozone economic review

The euro-area outlook continues to deteriorate, as the July industrial output figures issued late last week brought further evidence. After ending the second quarter on a weak note, industrial production fell further 0.3 per cent (month on month) in July.

The weakness has been broad based across the main areas economies. Production dropped sharply in Germany, Italy and The Netherlands, while it rebounded in France and Spain after having dropped markedly in the previous months.

Meanwhile, inflation was once again topping this weekend's agenda in Nice, France where European Central Bank officials met the respective finance ministers.

Members expressed some optimism during the meeting, that eurozone inflation would continue to retreat from a four per cent peak seen in June and July given that oil prices have dropped nearly $50 per barrel in the last two months.

Nonetheless, commentators at the meeting re-emphasised the importance of avoiding a damaging upward spiral in wages. European Central Bank President, Jean-Claude Trichet stated that "To go for wage increases in these circumstances would be catastrophic."

Most officials statements were probably connected with the next big wage deal in Germany, between IG-Metall and the employers of 3.6 million engineering workers, by October 31.

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.