Financial news

Trading for the mid-week session at the Malta Stock Exchange resulted in yet another marginal decline in the Index as it fell by 0.17 per cent to terminate just above 2,800 points. Activity during the day was relatively muted as trading was spread over 21 deals with four equities active for the session.

Bank of Valletta was the day's only gainer in the equity market as the component rose by 1c or a 0.45 per cent to end the day at €2.22. Activity for the financial services company was spread over five deals and a market consideration €21,180.

HSBC Bank Malta was the most liquid and actively traded listing as a total of 14,570 shares were exchanged over eight deals with a total value of €32,307. The equity incurred a loss in share price following Tuesday's positive outing as it shed 1c to terminate at €2.21.

Middlesea was the session's worst performer as the equity depreciated by a further 12c5 to close at €2.45, which is a new low for the insurance company. Following the close of Tuesday's session, the company issued an announcement whereby it stated that the "unprecedented volatility in the international and local capital markets presented challenges to the Group. It was expected that the positive technical performance would be outweighed by the negative investment result for the current financial year."

Maltapost also registered a new low for the year as the postal operator declined by almost 1c to close at €0.75. Trading was spread over 6,595 shares spread over five deals.

In the fixed interest sector of the market activity was spread over five government stocks and nine corporate bonds. The 5.5 per cent MGS 2023(I) was the day's main laggard as the security declined by 206 ticks over six deals. Turnover was highest in the 5.9 per cent MGS 2009(II) as 750,000 nominal were swapped over two investors and a value of €761,625.

As we approach another monetary policy meeting, the economic data issued in the United Kingdom pointed to further signs of deterioration. Tentative signs that the worst for the manufacturing downturn was behind were soon snuffed out, while housing data remains very much in negative territory.

The Purchasing Manager Index (PMI) for manufacturing dropped to 34.7 in February from 35.8 in January (a figure below 50 implies contraction). February's contraction reversed the modest rises of the last two months and provided further confirmation that the manufacturing sector is one of the worst affected areas of the economy.

Meanwhile, the housing market is still struggling to find a bottom, as the Nationwide House prices dropped 1.8 per cent month-on-month equating to an annual rate of -17.6 per cent. Mortgage approvals for house purchase remained at 31,000 in January.

Meanwhile, the spotlight today will turn to the rate setting meeting by the Bank of England in today's meeting. Unlike most of the previous meetings, there is some uncertainty looming over this meeting.

Market participants seem to be split between a 25 and 50 basis points cut, and there are a number of economists going for status quo. The probability of a no move in rates is very much latched to a possible announcement on quantitative easing, where the Bank of England would actually print money to purchase financial assets.

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.