Financial news

Trading for the first day of the week at the Malta Stock Exchange resulted in a drop of 0.54 per cent to a closing reading of 2,804 points. Activity was relatively wide spread in the equity market as six listings were active during the day with trading spread over a total of 42 deals. Only two components registered an increase in share price with the other listings dragging the Index lower.

Bank of Valletta continued to register an increase in its share price as it rose by a marginal one-fifth of a cent to terminate at €2.25. The equity was the most liquid and actively traded equity as 60,667 shares were exchanged over 30 deals carrying a market consideration €136,014.

Lombard Bank was the day's best performer as the equity rose by 2c to close at €2.48, although volume was relatively low with 4,500 shares that were transacted over a single deal and a market value of €11,160.

HSBC Bank Malta commenced trading without the right to receive a gross final dividend of 9c6, however, the market priced in just a 4c decline which equates to a drop of 1.79 per cent. The financial services company closed at €2.20 on the exchange of 3,120 shares over five deals.

Malta International Airport was the day's laggard as the equity depreciated by 5c or a loss of 2.04 per cent to terminate at €2.40. Trading activity for the airport operator was spread over a mere 200 shares on a single deal.

Both Go and Simonds Farsons Cisk performed negatively for the day albeit declining only marginally at 0c1 and 0c9 respectively. Trading in Go was spread over four deals and a value of €11,328, while activity in SFC resulted in 300 shares being transacted over one deal.

In the fixed interest sector of the market activity was also higher than usual and spread over five corporate bonds and nine government stocks. The 5.9% MGS 2015(II) was unrivalled in the government bond issues as the security rose by 400 ticks although volume were not supportive as only 2,330 nominal. In the corporate debt issues no security registered losses.

Weekly US economic review

New week but same old story, as the economic data emanating from the US was persistently weak. The further collapse in US consumer confidence illustrates the size of the task facing the Federal Reserve to get consumer's spending again. The Confidence Index dropped from 37.4 in January to a new record low of 25.0, dampening hopes that conditions were stabilising.

But the deadliest blow came from the downward revision in the fourth quarter real Gross Domestic Product that was revised down from -3.8 per cent to -6.2 per cent, largely on the back of lower consumption, inventories and net exports.

Meanwhile, the housing price slump gathered pace, as the Case-Shiller home price index declined by 2.5 per cent in December or 18.6 per cent over the past 12 months. The Index is now down 27.0 per cent from its July 2006 peak.

There were also new record lows for both existing and new home sales. Existing home sales retraced December increase, declining 5.3 per cent in January to 4.49 million units a new record low. New home sales dropped to a record low of 309,000 in January from December's 344,000. January's figure comes in at nearly 80 per cent below its peak.

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.