Financial news

Following two positive sessions, the MSE Index registered its first negative close for the New Year, weighted down by declines in three of the larger capitalised companies. In fact the Index shed 1.2 percentage points to terminate the mid-week session at 3,189 points.

HSBC Bank Malta was the day's worst performer, with the equity dropping 9c9 or 3.7 per cent to close at €2.60. The day's trades consisted of 17,300 shares, carrying a market consideration of €45,257, which were exchanged across nine transactions. At the end of the session 3,150 shares remained unfilled on the bid side at €2.60 while 248 shares were best offered at €2.699. HSBC Bank Malta will be publishing its full year results and final dividend payment in a few weeks' time.

Bank of Valletta was the day's most actively traded equity as 10,658 shares were swapped across 17 transactions. The third largest listed company suffered a 1c retreat in its price on profit taking activity following its recent gains, to close yesterday's session at the €3.59 level.

Next week, Bank of Valletta will capitalise a total of €60 million from reserves by increasing the nominal value of its shares from €0.75 to €1 and additionally issuing existing shareholders with a bonus share for every five shares held.

Once again, Go closed lower by the slimmest of margins on soft selling activity. The quadruple play telecommunications provider which last year accumulated an indirect stake in the Greek telecom provider, Forthnet SA, closed at €1.75 on the negotiation of 1,097 shares.

In the fixed interest sector of the market, activity was spread across a single corporate issue, the 5.75 per cent Mariner Finance 2008/10 which continued to trade at par, and nine government stocks, which all moved lower in price as investors demanded a higher yield for their funds.

Weekly UK economic review

This year kicked off on the same negative note as the closure of last year. Among the first pieces of data issued for the year was the Purchasing Manager's Index (PMI) for the manufacturing sector that stood at 34.9. The figure came in above the expected 33.6 and the prior month's figure of 34.4, but still way below the 50 level-mark, which separates expansion from contraction.

No respite was given by the Services PMI that also came in at 40.2. The PMI Construction was the only economic data issued from PMI that fell below the levels expected from Bloomberg surveys. The actual figure fell to 29.3 from 31.8 in the prior month, while according to Bloomberg, the figure expected by market participants stood at 30.5.

The UK housing market fell into further disarray with lower mortgage approvals. The HBOS house prices fell to 16.2 per cent on a year on year basis.

Christmas came early for UK shoppers, but not early enough for many retailers.

Consumers appear to have been waiting for the sales to begin before reaching down their wallets, wherever possible. Retailers have been less patient as according to PriceWaterhouseCoopers, 82 per cent of high street stores offered discounts or promotions before Christmas in an attempt to support sales volumes.

Meanwhile, the Bank of England will be the first major central bank to meet this year as it meets today. The BOE is expected to lower rates by a further 50 basis points to 1.5 per cent.

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.