Financial news

Yesterday's trading session at the Malta Stock Exchange was characterised by sustained activity in the two largest local market components, which pushed the index higher by just under one per cent to close at 3,831 points. Trading was restricted to 18 equity trades for a total consideration of €72,305.

Bank of Valletta continued positively from where it left off last week, with investors' demand pushing the price higher as trading was struck in the range of €4.25 to €4.31c1. In fact, a total turnover of 13,757 shares dealt over 12 transactions, saw the price higher to close at the intraday high of €4.31c1, representing a 3.11 per cent increase over its previous closing. At the end of the session 475 shares were best bid at €4.321 against a supply of 1,000 shares at €4.65.

Demand for HSBC Bank Malta amounted to 2,940 shares which were purchased across three transactions, pushing the price up to the €3.25 level, registering a five cents or 1.56 per cent premium to its earlier closing price.

With the trade range temporarily removed, GlobalCapital fell to a yearly low of €1.95, when a relatively low volume of 1,000 shares were traded over 2 deals with the equity subsequently closing at €2.20, equating to a 9.98 per cent drop.

The share price of MaltaPost closed unchanged when 2,011 shares were swapped over a sole trade at €0.79.

In the fixed interest sector of the market, activity was spread across four corporate bonds and five government stocks. The 7.8 per cent MGS 2018 attracted the highest turnover, with 2.25 million nominal whilst registering a price decrease of 0.50 per cent, to close at $121.20. Meanwhile, the 6.6 per cent MGS 2019 saw 550,000 nominal being exchanged at €112.75, down by 0.47 per cent.

Weekly US economic review

The US economy still faces stiff headwinds as consumers rein in spending and the employment situation deteriorates. However, business outlook seems to contain a string of optimism.

In fact, the September Philadelphia Fed manufacturing survey showed significant improvements in several components. The headline rose to +3.8 from -12.7 previously, much better than consensus expectations, which looked for a reading of -10. The improved overall sentiment six-month outlook improved as a result of better orders and shipments as well as some positive news on the inflation front.

Meanwhile, the index of leading indicators, a measure that seeks to estimate the future economic activity, dropped again in August. If economic conditions weaken further, as the index of leading indicators suggests, then the rebound in the Philadelphia Fed index will almost certainly prove to be a false start.

Initial jobless claims rose to 455,000 in the survey week for September nonfarm payrolls. While the layoffs accelerated in September, the biggest concern is that if the current distressed financial market conditions persist, the economic outlook which is already grim will deteriorate further.

Housing data ended a string of positive surprises, as housing starts plunged 6.2 per cent to a 16-year low in August. In conclusion, building permits dropped even more than starts, falling 8.9 per cent to a 23-year low.

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.