Financial news

After a period in which shares of financials came under significant pressure on the Malta Stock Exchange, attention turned to other sectors yesterday as shares of Go and Malta International Airport tumbled by around five per cent each.

At the end of the session, the Malta Stock Exchange Index was down 0.64 per cent to the same level of 3,366 point last registered in June 2005.

Trades in Malta International Airport shares were all executed at €2.55, equating to a drop of 5.49 per cent over its previous trading level. Total turnover consisted of 5,900 shares exchanged over four transactions. Further selling pressure was evident at the end of the session when the sole remaining bid was for 1,000 shares at €2.32,9 against a supply of 7,800 shares at the closing price.

Go's share price also closed lower when 4,135 shares were traded across three deals executed in the range of €1.95 to €1.901 and closing at the latter level which translates in a 9c9 or 4.95 per cent drop.

Bank of Valletta was the most active equity, with 11,051 shares being exchanged over 16 trades. This resulted in the equity trading down to an intraday low of €3.44, only to recoup some of this decline, with the last trade of the day filled at €3.49, thereby closing at a discount of 0c9.

HSBC Bank Malta traded at an intraday high of €2.90, only to end the session unchanged at €2.85 over a turnover of 12,100 shares in nine transactions. Meanwhile, activity in Middlesea Insurance of a mere 400 shares also failed to steer any moves.

In the fixed interest sector of the market, activity was spread across three corporate bonds and five government stocks. The five per cent MGS 2021 attracted the highest turnover with 155,647 nominal and closing lower by 138 ticks to €101.38. Comparably large volumes of 30,000 and 65,000 nominal respectively were registered in the August and October fungible issues of the 5.1 % MGS 2014 (III) with both tranches closing higher at €104.25.

UK economic review - weekly round-up

In line with most global economies, eurozone economies continued on a downward trajectory. The Composite Purchasing Managers' index (PMIs), the best leading indicator of activity, fell to its lowest level since the survey began in 1998.

At 44.6 it is well below the 50 level mark, which is the mid-point between expansion and contraction. The slowdown was particularly acute in the industrial sector, with German manufacturing recording the largest fall in the series' history.

The service sector is also struggling, falling to a level not seen since the 2001 downturn. The survey is now consistent with a contraction in the third quarter which would push the region as a whole into a recession.

This gloomy economic outlook has upped market participants' expectations of further rate cuts, expectations which were eventually confirmed by European Central Bank Governor Jean Claude Trichet.

In a speech at a banking conference Mr Trichet stated he considers possible that the Governing Council will decrease interest rates once again at its next meeting on November 6.

Further evidence of a deteriorating economic outlook was highlighted by the issue of eurozone industrial new orders for the month of August. Orders in the 15-country currency area fell 1.2 per cent month on month and 6.6 per cent year on year according to the European Union Statistics office, Eurostat.

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.