A positive 2009 start for equities after a dismal 2008

Global equities got off to a good start in 2009 as most indices were up two to three per cent on the first day of trading on Friday. This followed a positive run in the last few days of trading in 2008. The year-end modest rally in the United States came about as the Federal Reserve pushed ahead with its plan to buy up to $500 billion worth of mortgage bonds by the middle of 2009.

2008 was a dismal year for global equities. In Europe, they had their worst annual fall in over 20 years, while on Wall Street their performance was the worst since the Great Depression. The Dow Jones Industrial Average lost 33.8% in 2008, its worst annual decline since the index fell 52.7% in 1931. Germany's Xetra Dax fell by 40.3%, the CAC 40 in Paris lost 42.1%, while the FTSE 100 lost 30.9% in 2008, its worst yearly performance since it was established in 1984.

In Malta, the Malta Stock Exchange index closed 2008 at 3,208.215 points, gaining 0.36% in the last week of trading but ending the year with a loss of 35.03%. In 2007 the MSE index had ended the year marginally up by 1.32%.

Once again, this week the MSE traded only on Monday and Tuesday. During the week, seven equities were negotiated, four of which traded in positive territory, one in negative territory and two unchanged on the previous week. Shares of Go plc lost most territory as its share price dropped by 4.26% while Fimbank plc gained 6.96%.

A total of 169 deals were registered on the stock exchange for a turnover of over €20.69m. In the equity market, 64 transactions were carried out for a total value of €293,696. In the corporate bond market, 45 transactions for a total value of €3.02m were executed, while in the government bond market 46 transactions were executed for a value of €5.15m. Fourteen transactions were carried out in the Treasury Bills market for a value of over €12.2m.

The best performer of the week was Fimbank plc, which traded on Monday and gained 6.96%, its top limit level, to close at $1.476 as 140,300 shares were negotiated across nine deals. Looking back at 2008, Fimbank's share price lost 15.37% as over 6.3m shares for a total value of over €7.8m were negotiated across 589 deals.

The share price of Bank of Valletta plc was up 1.05% this week, but ended the year with a loss of 48.8%. Seventeen transactions were executed this week as 17,488 shares changed hands. During the year, the bank's shares were the most negotiated equity by value as more than €11.9m were negotiated over 2.4m shares across 2,598 deals.

During the week, HSBC Bank Malta plc's share price remained stable at €2.70 as 16,602 shares were negotiated across 16 deals for a total value of €44,940. In 2008, the share price dropped by 42.05% as over 2.2m shares were negotiated across 2,089 deals for a total value of over €8.39m.

The share price of Lombard Bank Malta plc remained stable during this week at three euros, as 3,344 shares for a total value of €9,907 was negotiated across three deals. During 2008, the share price dropped by 16.96% as a total value of over €7.3m was negotiated with 802,124 shares changing hands across 234 deals.

RS2 Software plc regained its initial public offering (IPO) price on Monday as its share price appreciate by 6.67% to €0.80, as 21,100 shares changed hands across four deals. The equity therefore ended with no price movement in 2008.

On Tuesday, the share price of Maltapost plc increased by 0.99% to €0.818 as 9,909 shares were negotiated across eight deals. This increase further enhanced Maltapost's yearly gain to 63.6%, which was the best performer of 2008.

On Monday, Go plc lost most ground as its share price lost 4.37% to €1.75, as 1,900 shares were negotiated across four transactions. On Tuesday, the share price edged higher by 0.11% to €1.752 as 3,390 shares were negotiated across three deals. In 2008, the share price of Go plc fell by 44.29%.

Last year, a total of 13,674 deals were registered on the stock exchange for a turnover of over €488m. In the equity market, 8,663 transactions were carried out for a total value of over €48.76m. In the corporate bond market, 1,942 transactions for a total value of €25.52m were executed, while in the government bond market, 2,294 transactions were executed for a value of €265.8m. In the Treasury Bills market, 629 transactions were carried out for a value of over €146.94m. These figures exclude put-through transactions.

In all, four listed companies ended the year with a positive performance. Maltapost plc was up 63.6%, Grand Harbour Marina plc, up 13.34%, Plaza Centres plc, up 10.83%, and San Tumas Shareholding plc, up 6.46%.

All other equities lost in value in what was a very negative year in the global equity markets. This is how the share price of the rest of the equities quoted on the MSE performed in 2008.

The share price of Crimsonwing plc dropped marginally as it lost 0.60% to close at €0.497. Medserv plc lost 2.51% as the equity closed the year at €3.997. And 6pm Holdings plc fell by 4.11%, ending 2008 at £0.70.

International Hotel Investments plc saw its share price drop by 13.94% whereas that of Malta International Airport plc fell by 22.24%.

Other bad performances were by Simonds Farsons Cisk plc, which fell by 25.84%, Middlesea Insurance plc, which fell by 33.65%, and Datatrak Holdings plc, which lost 37.70% as its share price dropped from €0.305 to €0.19.

Global Capital plc was the worst performer this year as its share price dropped by 64.46%.

Let us hope that tomorrow the local market also starts the year on a positive note.

This article, which was compiled by 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, Tel: 2122 4410 or e-mail jmizzi@jmfs.net.