Financial news

The Malta Stock Exchange registered yet another bland session at the start of a fresh week, with five equities active during the day. Downward pressures on four components suppressed the MSE Index reading by 0.47 per cent to close at 3,814 points.

Bank of Valletta traded in the dying minutes of the session when a single seller offloaded 5,955 shares clearing all the bids down to the €4.20 level, which equates to a decline of 2.6 per cent. At the close of the session unsatisfied supply at this price was countered against a bid of 400 shares at €4.192.

Simonds Farsons Cisk closed lower by 1.2 per cent as 3,117 shares, carrying a market consideration of just over €8,100 were sold across a sole trade at €2.60.

With a comparatively reduced traded volume of 6,500 shares, FIMBank shares closed two tenths of a US cent lower, equivalent to a decline of 0.1 per cent, to close at $1.89c6.

GO was the most actively traded component with 9 deals amounting to 5,625 shares being exchanged. Trading was executed down by the slightest of margins, which represents a 0.05 per cent discount, to the €2.20 level.

Crimsonwing was the only non-mover, with its share price remaining unchanged as 7,251 shares were traded over a single deal at the €0.50 level.

In the fixed interest sector of the market, activity was spread across four corporate bonds and four government stocks. The 6.7 per cent Mizzi Organisation Finance 2009/12 attracted the highest turnover, with 50,000 nominal while registering a price increase of 0.15 per cent to close at €101.40. An increase was also observed in the 6.25 per cent MGS 2011 (II) when a mere 4,659 nominal were swapped over a single transaction, pushing the price higher by 0.77 per cent to close at €104.05.

Weekly US economic review

The data on the real economy were almost as depressing as the financial markets. Real Gross Domestic Product (GDP) for the second quarter was revised downward to 2.8 per cent from 3.3 per cent reported previously. This was largely the result of weaker consumption, which was revised down by half of a per cent to 1.2 per cent. The downward revisions occurred in all three spending categories, that is, durable, non durables and services.

However, the biggest downward surprise came from the durable orders report, which fell more than expected, down 4.5 per cent in August after a downward revision to July to +0.8 per cent from 1.3 per cent previously.

Housing reports were the most worrisome.

August existing home sales were near expectations, falling 2.2 per cent to 4.91 million units, still above June and down only 10.7 per cent from August 2007, but new home sales plunged 11.5 per cent to a 17 year low, down 34.5 per cent from one year earlier.

Consumer sentiment slipped to 70.3 in September after a reading of 73.1 in early September. Nevertheless, the index remains up from an August low of 63.0, helped by lower energy prices. Meanwhile, initial jobless claims continued to increase, reinforcing concerns that consumer spending which accounts for 70 per cent in the US economy will falter.

Overall, data seems to be highlighting more downside risks in the coming quarters, presumably worst than the market had actually expected.

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.