Financial news

During yesterday's trading session at the Malta Stock Exchange activity was spread across just three equities with only one company moving higher while the rest dragged the Index lower by 0.5 per cent to 3,388 points.

Bank of Valletta was the day's most liquid and actively traded equity with 15,830 shares, carrying a market consideration of €55,376, being swapped across eight transactions. This activity was mainly driven by buyers who upped their bids by 0c9 or 0.3 per cent, helping the price close at €3.499. At the end of the session, 1,000 shares remained outstanding on the bid side at €3.45, while 8,407 shares were best offered at the €3.50 level. The Bank will be reporting its full year results following the close of this Friday's trading session.

HSBC Bank Malta dropped 5c or 1.7 per cent on low volume activity. The day's aggregate number of shares transacted amounted to 1,967, with the price initially holding steadily at the €2.90 level. The final trade of the day was then executed at €2.85 which single-handedly wiped off in excess of €14.5 million worth of market capitalisation.

Otherwise, Middlesea Insurance dropped to its lowest level since November 2004 when 453 shares were exchanged across two transactions at €2.70, which represents a 5c or 1.8 per cent discount to its previous traded price.

In the fixed interest sector of the market, activity was spread across a single corporate bond, the eight per cent Bank of Valletta 2010 which gained 25 ticks to trade at 106.5 per cent, and eight government stocks. Volume activity in this segment indicated the presence of only retail investors, with small clips of trades going through.

The 6.10% MGS 2015 was the biggest mover, gaining €1.37 to reclaim the €109.78 level, while on the contrary the 6.65 % MGS 2016 shed 32 ticks to move down to €113.63. The biggest activity was conducted in the 6.35% MGS 2013 where 13,511 nominal changed hands across two transactions, which moved the price higher by 0.6% to €109.17.

UK economic review - weekly round-up

It is official: the UK economy is shrinking. Having been flat in the second quarter, the UK economy contracted by 0.5 per cent quarter on quarter in the third quarter, considerably larger than the 0.2 per cent decline investors had expected. All three key segments of the private sector, manufacturing, construction and services saw output decline, the latter at its fastest pace in 18 years.

The first serious downturn in the UK economy since the early 1990s is now underway. Markets have reacted to the current economic situation as the sterling fell to a six-year low against the dollar.

UK consumers took a step back in September as sales growth fell to 2.3 per cent year on year, less than half the pace seen in the first half of the year. The underlying trend points to a continued moderation in demand rather than outright collapse. But with unemployment on the rise and confidence at all-time lows, the era of consumer-led growth is coming to an end.

On the interest rate front, the direction seems ever clear as markets are pointing to more rate cuts. The minutes from September's Monetary Policy Committee (MPC) showed that there was little debate about participating in the coordinated rate reduction, the 50 basis point cut was voted for unanimously. References to ongoing deterioration in the wider economy were dominating, with inflation concerns relegated to second place.

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.