Financial news

Trading on the Malta Stock Exchange yesterday was restricted to two equities, with trading being focused in the oldest listed company. The MSE Index closed unchanged at 3,229 points with a total of 12 deals for a total market turnover of €34,050.

During the session, the Bank of Valletta equity adjusted itself for the 1-for-5 bonus issued, announced at the time of the publication of the full year results for the year ended September 31, 2008. The share price declined by 60c or 16.67 per cent to €3.00, reflecting the fact that the equity was now trading with the right for the bonus shares. For all intents and purposes the market capitalisation of Bank of Valletta remained unchanged due to the eventual increase through the issue of the bonus shares. This is also reflected in the MSE Index which remained muted notwithstanding the fall in price.

Interest in International Hotel Investments consisted of a single trade of 5,017 shares which were transacted at the previous closing level of €0.87.

In the fixed interest sector of the market, activity was also subdued and spread across just four corporate bonds and just one government stock. The highest turnover for the session was registered in the 4.8 per cent MGS 2016 (II) as a volume of 46,588 nominal were swapped at €105.86 between two investors. The seven per cent GAP Developments 2011/13 registered the highest decrease among the corporate debt issues trading lower by 0.59 per cent to close at €84.50 for an aggregate volume of 8,000 nominal.

Weekly eurozone economic review

Eurozone economic data had yet another week of dull economic releases, with rising unemployment and plunging business and consumers' confidence.

On a more positive note inflation continued to contract while retail sales unexpectedly increased in monthly terms for the month of November.

Inflationary figures started off the economic data schedule for the week under review, as Consumer Price Inflation (CPI) plunged more than expected to a 26-month low in December. According to Eurostat inflation in the 15 countries using the euro dropped to 1.6 per cent year on year from 2.1 per cent in November.

December's inflation figure comes in well below the two per cent target rate set by the European Central Bank. This fuelled further expectations of a rate cut in tomorrow's ECB meeting. Market participants are currently pricing in a 50 basis points cut for tomorrow's meeting even though ECB President Jean-Claude Trichet looked somewhat hesitant to lower rates again in January, in his comments during the last press conference in December.

The European Commission also said that December's economic sentiment in the euro-area plunged to its lowest level since records began in 1990. Meanwhile, unemployment rate reached its highest level in two years at 7.8 per cent in November.

This situation appears more acute in Ireland and Spain although even Germany saw its first increase in unemployment in three years.

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.