Midi issue bond for €30m at 7% per annum

This week the Malta Stock Exchange index gained 0.16%, closing at at 3,313.336 points. Most major international markets also had a positive week with European markets recovering some five to seven per cent on the week.

On Friday, the local index registered a gain of 0.335%, recouping the losses made on Tuesday and Thursday. On the week, HSBC Bank Malta plc was the worst performer, losing 1.69%, while Malta International Airport plc was the best performer as it gained 11.61%.

A total of 152 deals were registered on the stock exchange for a turnover of over €5.2m. In the equity market, 62 transactions were carried out for a total value of €217,101. In the corporate bond market, 31 transactions for a total value of €212,630 were executed, while in the government bond market 34 transactions were carried out for a value of €650,708. 24 transactions took place in the Treasury Bills market for a value of over €4.1m.

In the corporate bond market, 6.70% Tumas Investments 2010/12 was the most traded, with a turnover of 91,242, as its price increased by 1.45%, closing at €101.50. The 4.60% HSBC Bank Malta 2017 increased by 1.01% to par on a turnover of 40,000.

The best performance was registered in the 6.20%-6.80% International Hotel Investments 2013 bond which registered an increase of 1.49% and ended the week at €102.00.

The only corporate bond that registered a loss was the 7% Big Bon Finance 2010/12, as one transaction for 3,262 was executed and closing at par.

Notwithstanding last week's rate cut announcement by the European Central Bank, most Malta Government Stocks traded at lower prices than the previous week. Of the nine stocks traded, seven lost ground, one did not register any change in price and another stock registered an increase of 1.33%.

The biggest loser was the 5.5% stock maturing in 2023, which registered a loss of 1.91% to €112.09. With a turnover of 327,699, the most traded stock this week was the 5% MGS 2021(I). The only stock that registered a gain was the 5.75% MGS 2010(II); however, the turnover in this stock was the lowest at 4,659.

Bank of Valletta plc dropped by 0.83% on the week and closed at €3.59 as 17,837 shares changed hands across 29 deals. On Tuesday, the share price dropped by 0.58% to €3.599. On Wednesday, the price remained stable on a single deal of 830 shares. On Thursday, the equity lost another 0.22%, closing at €3.591. On Friday, the share price dropped by 0.03% to close the week at €3.59.

HSBC Bank Malta plc closed the week at €2.85 as 44,136 shares changed hands across 23 deals. On Tuesday, the equity lost 0.66% to €2.88. Another drop of 0.69% in price occurred on Wednesday. On Thursday, a minimal 2,950 shares were negotiated across four deals as the share price dropped 0.35% to €2.85. On Friday, the bank's shares retained their previous day's price despite 26,866 shares changing hands across 12 deals.

Fimbank plc managed to recover most of last week's losses with a gain of 6.92% as its share price closed at $1.39 when 8,209 shares were negotiated across three deals.

Lombard Bank Malta plc was a positive performer during this week with a gain of 1.69% to €3.00 as 1,000 shares were negotiated on a single deal.

On Thursday, the share price of Grand Harbour Marina plc appreciated by 7.03% to €1.98 as 1,251 shares were negotiated on a single deal.

On Friday, the share price of Go plc lost 0.26% as 3,650 shares changed hands across two deals, closing the week at €1.895.

Malta International Airport plc was the best performer this week with an increase of 11.61%, closing the week at €2.50 as three deals for a total volume of 2,580 shares were executed. On Tuesday, the share price rose by 6.96% to €2.396 as 2,200 shares were negotiated across two deals. On Wednesday, the equity saw its share price increase by another 4.34% to €2.50 on a single deal of just 380 shares.

On Friday, Midi plc announced that it is issuing the equivalent of €30m in bonds due 2016-2018, in either or each of two issues denominated in euro and pound sterling respectively, depending on the value of applications received for the bonds. Both bonds will be each issued at a nominal value of €100 and GBP100 respectively. They will be issued at par and bear interest at 7% per annum.

In case the value of applications received exceeds the equivalent of €30m, Midi may increase the bond issue by the equivalent of an additional €10m in either the euro or GBP bonds or a combination of both. Unless previously purchased and cancelled, the bonds will be redeemed on December 15, 2018, subject to Midi's option to redeem, at not less than 60 days' notice, all or any of the bonds on any date between December 15, 2016, and December 14, 2018.

The bonds will be unsecured and unsubordinated obligations of Midi, and will rank pari passu without any priority or preference with all other current and future unsecured and unsubordinated obligations of Midi.

Midi's principal business is the development project on emphyteutical land comprising Tigné Point and Manoel Island. The proceeds from the bonds, net of commissions and expenses are expected to amount to €29.1m, and will mainly be used to finalise the construction of Tigné Point.

This report, which was compiled by Jesmond Mizzi, managing director of Jesmond Mizzi Financial Services Limited (JMFS), 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.