Financial news

Trading activity on the Malta Stock Exchange was relatively subdued yesterday given a mere five equity transactions were registered on the day.

The MSE Index ended the day unchanged at 3,305 points when above normal gains in two components were cancelled out by a marginal drop in the largest listing by market capitalisation, leaving the Index reading in balance.

Malta International Airport was seen trading on a low volume of 380 shares transacted on a sole trade at €2.50 thereby rising by 4.34 per cent. At the closing bell, 500 shares were best bid at €2.38 while 9,460 remained outstanding on the offer side at €2.50.

Similarly, a single trade in Lombard Bank Malta consisting of 1,000 pushed the price higher by 1.69 per cent, still placing as the seventh largest component on the local equity market with a market capitalisation of €105.1 million.

HSBC Bank Malta was the most active and liquid equity as selling pressure to the tune of 10,000 shares saw shares changing hands at €2.86 which represents a decline of 0c2 or 0.69 per cent.

Bank of Valletta continued to consolidate at the €3.599 level with 830 shares traded across a sole deal.

In the fixed interest sector of the market, activity was spread across three corporate bonds and three government stocks with government stock trading in red. The 5% MGS 2021 attracted the highest turnover, with 240,256 nominal, pushing the price lower by 1.1 per cent to €106.03. The highest percentage increase in the local bond market was registered in the 6.7% Mizzi Organisation Finance 2009/12 as 19,992 nominal were swapped at a price of €101.50 therefore trading higher by 0.5 per cent.

Weekly UK economic review

The Monetary Policy Committee (MPC) in the United Kingdom lowered interest rates by another 100 basis points last week as widely expected.

This takes the total easing in monetary policy to some 300 basis points in the space of less than two calendar months.

During this period of crisis management we have also seen the announcement of a fiscal package worth one per cent of Gross Domestic Product, significant additions to banking sector liquidity, bank bailouts and recapitalisations.

In terms of the statement published alongside the Bank of England rate decision, the Bank mentioned the potential for weaker sterling to help alleviate the impact of slowing global demand. Together with lower expectations of market rates, the sterling's depreciation was said to raise the profile of inflation relative to the bank's November forecast.

That said, the Committee still saw a "substantial risk of undershooting the two per cent Consumer Price Inflation target set in the medium term".

Subsequent figures issued during the week confirmed the deteriorating inflationary outlook as Producers Price Inflation fell further. Meanwhile, industrial production dropped well above expectations during the month of October, as the monthly figure declined by 1.7 per cent from -0.2 per cent in September.

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.