Financial news

Continuing on the previous day's gain, the MSE Index registered an increase of just under one per cent during yesterday's session to close at 3,523 points. The equity market's daily activity was restricted to four listings with an aggregate value of €205,370 spread over 41 deals.

HSBC Bank Malta recorded the highest percentage gain when sustained buying activity throughout the session saw it trade up by 10c from its previous closing price of €2.90. Turnover consisted of 25,050 shares dealt across 13 transactions with the equity closing at €3, which equates to a 3.45 per cent gain, leaving unsatisfied supply of 3,700 shares at this price, countered by a bid of 800 shares at €2.93.

Bank of Valletta was the day's most liquid and actively traded equity with a grand total of 29,692 shares changing hands across 21 trades. The bank's shares were active right through the session with buying interest raising the trading price by 0.81 per cent to close at €3.75 with a high percentage of the deals being executed at this level.

Selling pressure in Malta International Airport saw the share price tumble 5.17 per cent to close at €2.75 over a volume of 4,600 shares, transacted over four deals. This is the lowest level reached since the end of May 2005.

MaltaPost's share price closed unchanged when 8,770 shares were swapped over three trades at €0.80.

In the fixed interest sector of the market, activity was spread across seven corporate bonds and two government stocks. The 5.4 per cent MGS 2010 (IV) attracted the highest turnover, with 900,000 nominal and closing lower by seven cents to €102.05.

The highest increase in price was registered in the 5.9 per cent HSBC Bank Malta 2018 where 10,900 nominal were swapped over five transactions, pushing the price up to close at €102.50.

Weekly UK economic review

Consumer Price Inflation rose to 5.2 per cent in September, its highest since March 1992. Core inflation picked up to 2.2 per cent after having spent much of the past decade below two per cent. It is highly likely that this figure coincides with a peak for the data. Inflation concerns have clearly taken a back-seat on the back of escalating financial markets problems, falling commodity prices and deteriorating global economies. The focus of the UK central bank has clearly shifted towards the outlook for growth and thus inflationary concerns are now less decisive for the interest rate outlook.

After last week's interest rate cuts from a concert of central banks, the Monetary Policy Committee (MPC) issued a statement where it held that interest rate cuts "could not be expected to resolve the current problems in the financial markets", but this move is clearly designed to at least partially offset the impact of tighter credit conditions on the real economy. Given the swathe of weaker economic evidence published over the past month, combined with financial market fragility, increased the probability of further rate cuts by the Bank of England.

Meanwhile, housing data surveys continued to point to the downside although the figures issued were slightly above expectations.

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.