Financial news

The Malta Stock Exchange moved back in positive territory after Thursday's muted session, with the local equity index gaining over half a per cent to terminate the session at 3,990 points, within reach of the 4,000 point psychological level. All equities which attracted trades during Friday's session registered a change in price.

Uncharacteristic heavy trading activity was registered in Plaza Centres as 95,200 shares traded over five deals, heaving the price higher by 2c or 1.2 per cent to terminate the session at €1.75.

FIMBank and Go both dropped one-tenth of a cent to close at $1.908 and €2.309 respectively, with FIMBank's volumes nearly 11 times higher at 33,000 shares.

On the other hand, Bank of Valletta gained 0c1 with all the nine trades executed during the session struck at the €4.69 level. HSBC Bank Malta, the largest locally listed, equity moved higher by 1c on low volume to reclaim the €3.40 level.

Meanwhile, Maltapost shares clinched the top spot as the equity gained 2.56 per cent on the execution of 33,933 shares to close the session at €0.80. International Hotel Investments registered the second best performance on the day with a 1.9 percentage gain, for a closing price of €1.06.

The two information technology-related companies also managed to post in gains during the last trading session of the week, as Crimsonwing moved by eight-tenths of a cent higher to €0.518 while RS2 Software gained 0.5 per cent to close the week at €0.829.

Renewed buying activity in Malta International Airport helped the monopoly operator gain 5c or 1.7 per cent to reclaim the €3.00 level. The day's activity consisted of 1,300 shares which were purchased in rapid succession across three trades.

Weekly UK economic review

The outlook for growth in the United Kingdom continues to deteriorate markedly. However, the Bank of England was not ready as yet to concede that growth is replacing inflation as the biggest worry, a view that has been gaining traction in financial markets.

According to the Office for National Statistics, UK inflation accelerated to the fastest pace in at least 11 years last month, putting pressure on the Bank of England to refrain from cutting interest rates as the economy slides toward a recession. Consumer prices rose 4.7 per cent in August from a year earlier. The rate exceeded the government's three per cent limit for a fourth month, which triggered another letter of explanation by Bank of England Governor Mervyn King to the Chancellor of the Exchequer Alistair Darling. In today's letter Mr King wrote that inflation is likely to remain above the target until well into 2009.

Meanwhile, the British housing market declined further during August as the squeeze on mortgage lending pushed down sales to a record low with a consequential drop in house price. While willing to continue to supply the banking sector with liquidity, Bank of England Governor warned against significant fiscal support for the housing market. In his view, the slowdown in mortgage lending reflects a necessary financial restructuring. Forecast from the European Commission and the OECD, suggest the UK could do with a fiscal boost of some sort. Both the European Commission and the OECD expect a technical recession in the second half of this 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.