Financial news

During a relatively uneventful mid-week session at the Malta Stock Exchange, the MSE Index inched marginally higher by 0.06 per cent to close at 3,823 points. Six equities were active throughout the session with an aggregate value of just €63,440 spread over 23 deals.

Interest in Grand Harbour Marina mopped up all supply entering the market up to the €2.15 level with a turnover of 1,500 shares across two deals, thereby pushing the price up by 2.38 per cent over its previous level. Unsatisfied outstanding bids amounting to 2,200 stood at this closing price, countered by a best offer of 2,000 shares at €2.90.

All transactions in HSBC Bank Malta were exchanged at €3.26, which equates to an increase of nine-tenths of a cent or 0.28 per cent. Turnover here consisted of 6,867 shares across four trades.

Go increased by the slightest of margins when 1,412 shares were traded over 3 deals, which equates to a 0.05 per cent rise, to close at €2.202. Bank of Valletta was the most liquidly traded component with 7,085 shares dealt over 12 transactions.

Trading was executed down to the €4.25 level, only to recoup most of this decline when buying interest entered the market towards the end of the session, to close at €4.30, equivalent to a 0.21 per cent discount over its previous closing price.

Crimsonwing's share price closed unchanged when 3,249 shares were traded over a single deal at €0.50. Similarly, interest in Middlesea Insurance to the tune of 1,000 shares failed to change the closing price of €2.95.

In the fixed interest sector of the market, activity was spread across three corporate bonds and seven government stocks. The 6.75 per cent Corinthia Finance 2012 attracted the highest turnover, with 27,000 nominal being struck at par. Meanwhile, the 6.6 per cent MGS 2014 and 5.5 per cent MGS 2023 registered declines of 1.83 and 1.62 per cent respectively.

Weekly UK economic review

The minutes of the September 4, Monetary Policy Committee led by Governor Mervyn King revealed that policy makers voted 8-1 to keep the interest rate unchanged. The minutes showed that a case could be made for both a reduction as well as an increase in interest rates. However, the committee had concluded that there was little evidence that medium-term inflation expectations had been dislodged.

Meanwhile, data releases last week shed further light on the current state of play. In keeping with the downbeat mood, UK house prices fell for a fourth month in September as the global credit crisis intensified, locking out homebuyers.

The housing market is on its knees and will likely remain so until financial institutions address the disastrous state of the mortgage funding markets. The property market may face further weaknesses in the coming months provoking a painful adjustment for many families.

Claims for jobless benefits rose 32,500, higher than the forecast consensus which predicted an increase of 23,000.

The unemployment rate rose to a two-year high of 5.5 per cent, reflecting a fall in the number of jobs and an increase in the number of people wanting a job.

The current market conditions and greater risk of a recession in the UK will cause jobless claims to keep rising along with a squeeze on consumer spending.

More encouragingly, retail sales were surprisingly buoyant in August rising by 1.2 per cent after rising 0.9 per cent in July. On the year, sales increased 3.3 per cent.

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.