US markets recover but job losses reach 1.91m

The international markets were once again shattered on Friday as the United States announced that 533,000 jobs were lost in November and that unemployment had reached 6.7%. This is the largest monthly loss in more than three decades as cumulative job losses reach 1.91 million people this year.

Major European markets fell by some five to eight per cent on the week, while the US markets fell by some two per cent after recovering on Friday. In fact, the market rallied in Friday's afternoon trading after Hartford Financial Services Group Inc. forecast an increase in profit. The Standard and Poor 500 index gained 3.65% and the Dow Jones Industrial Average gained three per cent.

During the week, central banks continued to slash borrowing costs as they anticipate growing economic weakness and sluggish demand. The European Central Bank cut interest rates by a record 75 basis points to 2.5%, while the Bank of England slashed borrowing costs by a full percentage point to shore up Britain's deteriorating economy and stave off the threat of deflation.

Locally, the Malta Stock Exchange index closed at 3,307.94 points, again falling a minimal 0.28% on the week. Year to date the index has now lost 33.01%.

Of the seven equities that were traded during the week, Fimbank plc closed in negative territory, HSBC Bank Malta plc and Maltapost plc closed in positive territory while the four other equities remained stable.

The index had three consecutive positive days on Wednesday, Thursday and Friday, although the increases were minimal.

The only drop was experienced on Monday as the index closed flat on Tuesday.

A total of 190 deals were registered on the stock exchange for a turnover of over €18.3 million. In the equity market, 58 transactions were carried out for a total value of €179,340.

In the corporate bond market, 44 transactions for a total value of €806,569 were executed. While in the government bond market, 69 transactions were executed for a value over €13.8 million. Eighteen transactions were carried out in the Treasury Bills market for a value of over €3.4 million. Activity in the bond and treasury bills market continue to dominate the local stock exchange. Activity was particularly high in the MGS 5.7% 2012(III), MGS 6.1% 2015, MGS 5.1% 2022(I) and MGS 5.5% 2023(I).

During this week, Bank of Valletta plc remained stable as it closed Friday's session at €3.62. Twenty-three deals were executed during which 22,780 shares were negotiated for a total value of €82,318.

On Monday, the share price fell by 0.55% as it closed at €3.60 when 13 deals were executed for a total volume of 10,715 shares. On Tuesday, the share price remained stable at €3.60 as 2,738 shares were negotiated.

On Wednesday, the price appreciated by 0.50% to €3.618 on a single deal of 2,727 shares.

On Thursday, the equity increased by 0.03% to €3.619 as 2,600 shares changed hands across two deals.

On Friday, another increase of 0.03% was registered as 4,000 shares were negotiated across three deals.

The share price of HSBC Bank Malta plc increased by 0.31% to €2.899 as 9,729 shares changed hands across 17 deals for a total value of €28,210. On Monday, four deals for a total volume of 4,000 shares led to an increase in the price from €2.89 to €2.90. On Wednesday, the bank saw its share price drop by 0.07% as 5,604 shares changed hands across ten deals.

On Thursday, the equity experienced an increase of 0.03% to €2.899 on a single deal of just 25 shares. On Friday, the share price remained stable at €2.899 as 100 shares were negotiated across two deals.

This week, Fimbank plc was the worst performer as the share price fell by 6.74% as 16,200 shares changed hands across six deals for a total value of €16,695. On Monday, the share price fell from $1.394 to $1.30 as 2,200 shares changed hands across four transactions.

On Thursday, two deals for a total volume of 14,000 shares left the share price stable at $1.30.

During the week, Go plc was active only on Monday when its share price remained stable at €1.90 on a single deal of 5,000 shares.

Maltapost plc was the best performer this week as its share price appreciated by 5.26% as 39,602 shares were negotiated across eight deals.

On Monday, the share price appreciated by 1.32% to €0.77 on a single deal of 2,089 shares.

On Thursday, the equity closed at €0.80, an increase of 3.90%, as 37,513 shares changed hands across seven deals.

The share price of Malta International Airport plc remained stable at €2.24 when just 770 shares were negotiated on Tuesday across two deals. On Friday, MIA published the traffic results for November 2008.

It said there was a decline of 7.9% from 101,559 passengers in November 2007 to 93,549 last month.

During the first 11 months of this year, passenger departures rose by 5.32%, that is, an increase of 75,076 passengers.

The share price of Santumas shareholdings plc remained stable at €3.10 as 3,000 shares were negotiated in a single deal.

This report which was compiled by Jesmond Mizzi, managing director of Jesmond Mizzi Financial Services Limited (JMFS). The report does not intend to give investment advice and the contents therein should not be construed as such. JMFS is licensed to conduct investment services by the MFSA. The directors or related parties, including the company, and their clients are likely to have an interest in securities mentioned in this article. For further information contact JMFS at 67/3, South Street, Valletta, or on Tel: 2122 4410 or e-mail: jmizzi@jmfs.net.