Financial news

Trading for yesterday's session at the Malta Stock Exchange resulted in a negative outcome with the Index shedding 0.75 per cent to close slightly above the 2,800 level. Activity was subdued in the equity market with just two listings in the banking sector attracting trade. The two major banks were both losers during the session, thereby dragging the Index lower.

HSBC Bank Malta was the most liquid and actively traded equity with investors exchanging an aggregate 6,341 shares over five deals for a market consideration of €14,906. Activity was mainly driven by sellers forcing the closing price down to €2.35, which represents a 3c1 or 1.3 per cent discount to its previous closing level.

Bank of Valletta was the worst performer during the session as the equity lost 5c or almost two per cent to end the day at €2.50. Trading for the financial services company was lower than usual with activity spread over an aggregate three deals for a market value of €5,020. Bank of Valletta will be reporting its interim results following a board meeting tomorrow.

Prior to the commencement of trading Middlesea Insurance issued its preliminary statement of annual results for the financial year ended December 31, 2008. The overall Group results were adversely affected by the performance of both local and foreign equity markets, with losses after tax for the financial year attributable to shareholders amounting to €18.7 million.

Elsewhere International Hotel Investments announced that the bank funding for the Corinthia Hotel & Residences London had been secured by way of a €135 million loan raised from a syndication of banks led and arranged by Barclays. The other members of the syndicate include the Libyan Foreign Bank, the Arab Banking Corporation and Bank of Valletta.

In the fixed interest sector of the market, activity was spread over eight government stocks and three corporate bonds. The best performer in the government securities was the 5.10 per cent MGS 2014 which rose by 82 ticks when investors transacted 475,000 nominal over three deals to close at €107.15.

Weekly eurozone economic review

The Economic sentiment for the eurozone over the past week was relatively positive, with crucial economic indicators across various countries improving considerably.

The Purchasing Manager Index, a leading economic indicator, (PMI) topped the week's list as the eurozone's services and manufacturing sector experienced a positive performance during the month of April, hinting that the recession may have tempered at the start of the second quarter. Despite being the highest reading since October, at just 40.5, it remains far below the 50 level mark that separates contraction from expansion.

The German ZEW survey of financial analysts continued to support this positive trend as economic sentiment in the region climbed for the sixth consecutive month, returning to positive territory for the first time in two years (July 2007). Meanwhile, consumer confidence in Europe's largest economy, unexpectedly held steady for a third consecutive month despite news from German economic institutes who envisage that the country's economy will shrink by six per cent this year. Business and investor confidence was boosted on hopes that interest rate cuts from the European Central Bank and government stimulus plans will weather the full impact of the financial storm. Unemployment, in the region remains a concern however, with the average number of unemployed rising to a five-year high of 10.8 per cent.

The final positive dose of optimism was injected through the Industrial New Orders, as a decline in the pace of deterioration was registered, as monthly fall orders dropped by 0.6 per cent in February following January's fall of 3.4 per cent. Nonetheless, the yearly rate still stands at a significant -34.5 per cent, signalling that we are still far off from any real growth.

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.