Financial news

The MSE Index was kept in balance at 3,866 points with sparse trading activity noted on the local market, mainly present in the comparatively smaller components by market capitalisation. This slow activity was reflected in 11 equity deals struck throughout the whole session, with the total transacted consideration barely eclipsing €26,800.

The largest and second largest equities did not trade during the session. The best supply in HSBC Bank Malta, which closed Tuesday's session at the €3.20, was for 400 shares at €3.39 while demand stood for 947 shares at €3.20.

The bid-offer spread in Bank of Valletta, which traded last at the €4.60 level, saw demand for 1,200 shares priced at €4.21 against supply of 5,000 shares asking €4.307. No trade ranges will be applicable for today's trading session. Lombard Bank Malta gained 0.1 per cent as 2,106 shares, carrying a market consideration of €6,472 were purchased across three transactions, thereby pushing the price higher by 0.1 per cent to €3.074. A single trade in Grand Harbour Marina for 3,000 shares was filled at €2.10, which equates to a decrease in price of 5c or 2.33 per cent, following a previous trading price of €2.15 achieved last week. Maltapost traded lower to €0.79 with 2,022 swapping hands between two investors, trading at a discount of 1.25 per cent over its previous price level. Crimsonwing dealt in unchanged territory, with the price trading at the €0.50 level, as 1,970 shares changed hands over a single deal. Interest in Go for 1,300 shares failed to change the closing price of €2.31, a fate similar to that of International Hotel Investments which also closed unchanged when 2,022 shares were exchanged in a sole transaction at €1.01.

Weekly UK economic review

The Federal Reserve held the benchmark interest rates at two per cent, and kept its policy directive more or less balanced. Policymakers cited "Strains in financial markets have increased significantly and labour markets have weakened further." The statement went on to indicate that the committee expects inflation to moderate later this year and next year, though reinstating that the inflation outlook remains highly uncertain. Federal Reserve chairman Ben S. Bernanke is betting he can use targeted emergency loans rather than another interest-rate cut to pull Wall Street through the credit crisis.

Meanwhile, August Consumer Price Index (CPI) posted the first headline decline since October 2006, mainly due to falling energy prices. The August decline suggests that the peak in headline inflation is behind us and in turn the headline should decelerate considerably by year end.

US retail sales growth fell to just 1.6 per cent year on year in August as the stimulus from tax rebates wanes. Elsewhere, the trade balance deteriorated noticeably in July, though digging deeper suggests that all is not lost. The trade gap widened only because of surging fuel imports. Capital and consumer goods were strong again, reiterating that protection form a competitive dollar has given to the manufacturing sector. It is still early days, and with the dollar appreciating significantly over the past few months, things could get tougher in 2009.

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.