New government stocks issued after ECB interest rate cut

This week the Treasury announced the issue of two new Malta Government Stocks for a total of €70m, subject to an over-allotment option of up to a further €25m. The 3.6% MGS 2013 (IV) will be issued at €100, while the 5% MGS 2021 (I) will be issued at €101.50 with a yield to maturity of 4.84%.

Subscriptions open tomorrow and close on Wednesday for applications not exceeding €100,000. Sealed bid applications close on Friday.

The European Central Bank (ECB) and the Bank of England (BoE) cut their main interest rates by half a percentage point on Thursday. The ECB rate is now 1.5%, the lowest since the euro's launch, while the BoE's rate of 0.5% is the lowest in the bank's 300-year history. The BoE also unveiled a programme to buy up to £150bn in government gilts and corporate bonds in an effort to kick-start demand.

On Friday, official figures showed US unemployment at 8.1%, or 12.5 million people. Notwithstanding this bad news, US markets closed in positive territory after a late rally led by energy stocks.

However, global equity markets continued to fall this week as leading indices fell between four and nearly eight per cent on the week.

The Malta Stock Exchange (MSE) index fell 1.52% during the week to close at 2,776 points. Twelve equities were traded, with nine closing lower, one higher and two stable. Lombard Bank Malta plc was the best performer while Medserv plc lost most ground.

During the week, 265 deals were registered on the MSE for a turnover of over €4.6m. In the equity market, 133 transactions were carried out for a total of €413,383. In the corporate bond market, 69 transactions for a total of €522,652 were executed, while in the government bond market 56 deals took place for a value of over €1.5m. Seven transactions were carried out in the Treasury Bills market for over €2.1m.

Bank of Valletta plc (BoV) had a good start to the week. On Monday, it was the most active equity with 60,667 shares traded across 30 deals, adding 0.09% to the share price. But on Tuesday, BoV fell 1.78% to €2.21 as 15 deals involving 19,710 shares were executed. It crept up 0.45% on Wednesday before slipping 0.05% and 0.86% on Thursday and Friday respectively. In total, 101,577 BoV shares were traded this week in 63 deals, and the equity lost 2.14% in value.

HSBC Bank Malta plc (HSBC) had a bad Monday as its share price dropped 1.79% to €2.20. But on Tuesday the bank was the day's only positive performer as its share price rose 1.82%. The equity lost 0.45% on both Wednesday and Thursday before increasing 0.45 per cent on Friday to close at €2.21. In total, HSBC lost 1.34% in value this week as 31,440 shares changed hands in 27 deals.

Lombard Bank Malta plc traded on Monday and Thursday, with its share price appreciating by 0.81% and 1.65% respectively. This week, the equity's shares increased 2.48% to close at €2.521 as 15,700 shares were exchanged in seven deals.

On Monday, Go plc's share price slipped 0.07% but it managed to retain the price of €1.50. The equity traded again on Tuesday, Thursday and Friday with a total of 34,325 shares changing hands in 18 deals this week.

A single deal of just 200 shares in Malta International Airport plc (MIA) on Monday led to a 2.04% drop in the share price - the largest fall among equities traded that day. MIA was the worst performer again on Tuesday when a single deal of 1,000 shares led to the price falling another 1.25% to close at €2.37. These two deals led to a total reduction of 3.27% in MIA's share price this week.

On Monday, a single deal of 300 shares led to a drop of 0.47% in the share price of Simonds Farsons Cisk plc, which closed at €1.89.

On Tuesday, a Middlesea Insurance plc (MSI) statement revealed that it had experienced "a material deterioration in the technical performance of a certain class of business" during 2008's last quarter. This and the current financial difficulties affecting the group's investments means results for last year are expected to be below expectations.

On Wednesday, MSI's share price plumetted 4.85% - the biggest loss of equities traded - to close at €2.45 as 5,000 shares changed hands across three deals.

Maltapost plc's share price dropped 1.19% on Wednesday to €0.75 as 6,595 shares were traded across five deals. On Thursday, it fell 0.67% to €0.745 on a single deal of 145 shares. On Friday, a single deal of 200 Maltapost shares left the price unchanged at €0.745.

Datatrak Holdings plc this week published its results for the second half of 2008. Group turnover was €1.5m, marginally higher than in the previous year. But a substantial exchange rate loss and the postponement of IT investments by the group's clients led to a pre-tax loss of €0.43m, compared to a €0.36m loss in 2007.

Two deals for just 100 shares this week led to International Hotel Investments plc's share price plumetting 2.47% to close at €0.829.

On Friday, a single deal of 1,300 shares left Plaza Centres plc's share price unchanged at €1.70.

RS2 Software plc's share price was also stable at €0.75 despite a deal of 1,500 shares on Friday.

A single trade of just 500 shares on Friday led to a precipitous 7.68% fall in Medserv plc's shares, which closed at €3.69.

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 or on Tel: 2122 4410 or e-mail jmizzi@jmfs.net.