Financial news

Yesterday's session at the Malta Stock Exchange resulted in a positive outcome as the Index rose by 0.6 per cent to close at 2,653 points. Trading during the session occurred when investors struck an aggregate 36 deals over the three active listings, all of which were in the banking sector. The two largest financial service providers in terms of market capitalisation registered gains during the day, further supporting the Index.

Bank of Valletta was the day's most liquid and actively traded equity, when 7,645 shares were swapped over nine deals for a market consideration of €15,863. The bank rose by 3c or 1.5 per cent on the day's trades to terminate at €2.08. HSBC Bank Malta was also a gainer for the session when it climbed by 3c or 1.4 per cent to close at €2.16. Trading activity for the company was spread over a total of seven deals and a market value of €12,246.

FIMBank Malta was the only non-mover for the session as the equity closed unchanged at $1.30. Investors for the trade finance specialist exchanged 1,946 shares over just two deals. For the second consecutive session, International Hotel Investments failed to trade following the issue of its preliminary statement of annual results for the year ending 2008. The hotel proprietary and management group registered a pre-tax profit of €22.3 million of which €13.6 million are attributable net of tax to equity holders of the company.

In the fixed interest sector of the market activity was spread over 8 government stocks and just two corporate bonds. In the government securities the latest fungible tranche of the five per cent MGS 2021(I) was the worst performer as it shed 111 ticks when two investors transacted 9,000 nominal. The highest turnover was registered in the 5.70 per cent MGS 2012(III) when 115,282 shares were exchanged over two deals for a total market value of €124,954.

Weekly eurozone economic review

The US economic data has continued to detach itself from the recent positive run in equity markets, as the data issued over the past week was not so optimistic.

In fact, US consumer borrowing fell more steeply than expected in February as credit and charge card use dropped by most on record according to a Federal Reserve report. Another negative record was pencilled in for the budget deficit covering the first half of the fiscal year 2009.

The United States posted a record $956.8 billion budget deficit more than three times the year-ago shortfall, as spending on financial and economic rescue programmes ramped up.

For the month of March, the government recorded a deficit of $192.27 billion, a record for the month and nearly four times the year-ago gap. March receipts fell sharply as a rapidly deteriorating economy dried up tax revenue from individuals and businesses. The nearly $1 trillion deficit in the first half of the fiscal year is consistent with some private forecasts that fiscal 2009 shortfall will be in the $1.6 to $2.0 trillion range.

Nonetheless, the Fed will keep on pouring further cash in the markets as highlighted in last week's Federal Open Market Committee minutes where policy makers announced that they will be buying a "substantial" amount of US Treasury and mortgage debt to halt the slide in the economy. Staff economists for the FOMC lowered projections for US real gross domestic product in the second half of 2009 and 2010, indicating a more gradual recovery.

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.