Financial news

During yesterday's trading session at the Malta Stock Exchange the Index traded practically flat with weakness in two equities offsetting slight gains registered in the largest and third largest listed equities.

Demand for the heavyweight banking sector equities remained healthy with investors purchasing back into HSBC Bank Malta and Bank of Valletta which have registered large double digit percentage declines during the year.

HSBC Bank Malta was the most active equity on the exchange as 27,420 shares were exchanged across 15 transactions. The equity immediately commenced trading higher and by the end of the session, closed on the upside by 0.5 per cent at €2.923, its highest level in two weeks.

Bank of Valletta shares gained in value for their fifth consecutive session with investors purchasing a further 4,800 shares across nine transactions picking up shares up to the €3.599 level. At the end of the session, best demand stood for 1,201 shares bidding at €3.58 against supply of a further 3,225 shares best offered at €3.599.

FIMBank shares dropped to their lowest level in two years during a session which saw the equity register the highest turnover of shares. In fact FIMBank was the day's most liquid equity with a grand total of 165,240 shares changing hands across 12 transactions. This activity was mainly driven by sellers who dropped their offer prices by 4.5 per cent with the equity closing the session at the $1.385 level.

Elsewhere, Maltapost continued to weaken as 22,500 shares were sold across four transactions squeezing the price lower by 2c5 or 3.4 per cent to close at €0.71, its lowest level since early April.

In the fixed interest sector of the market, activity was spread across seven corporate bonds and four government stocks. Following Monday's lacklustre interim director's report, the 5.60 per cent GlobalCapital 2014/16 shed €4.76 as a mere 1,100 nominal was transacted at 79.99 per cent of par, making it the highest yielding security in the segment. Both HSBC Bank Malta issues gained 100 ticks on single transactions while all sovereign issues in action during the session traded higher than their previous closing levels.

UK economic review - weekly round-up

As it was widely expected the European Central Bank delivered a 50 basis point cut, bringing rates down to 3.25 per cent. The decision was a unanimous decision although other options were discussed. The possibility or reducing rates by 75 basis points was also put forward for discussion. The ECB left the door wide open for further rate cuts in the upcoming meeting in December.

As the financial crisis intensified, the European Services sector had its worst month on record, according to October's Purchasing Manager's Index (PMI). Manufacturing did no better, recording its largest ever monthly fall on its way to a record low. The PMI composite was down to 43.6 from 44.6 in the previous month, well below the 50-level mark which distinguishes between growth and contraction.

Industrial production for the month of September declined for a fifth straight month in Spain, while Dutch and German Industrial Production declined for the first time in five years.

Meanwhile, eurozone retail sales fell for the fourth straight month in annual terms in September, pointing to growing weakness in consumer demand. Retail sales in the 15-country currency area fell 0.2 per cent on the month and 1.6 per cent in annual terms.

Economists polled by Reuters had expected an even deeper decline of 0.4 per cent month on month. Retail sales are an indication of household demand, and a drop in private consumption was one of the main reasons for shrinkage in the economy.

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.