Global equity indices erase all this year's losses

Global equity markets continued to rally to reach four-month highs, wipe away all this year's losses and revert to positive territory for the first time this year.

European bourses continued to rally with the CAC 40 in Paris up 4.84% on the week, and Frankfurt's Xetra Dax up 3.04% as investors reacted positively to the European Central Bank (ECB)'s expected reduction of interest rates to one per cent as well as its plans to buy €60bn of covered bonds. These are a form of long-term debt issued by banks that are usually secured against mortgages and the banks themselves.

London's FTSE 100 index was also up a whopping 5.16% as the Bank of England announced it would pump £50bn into the UK economy in a substantial expansion of its programme of government bond purchases.

In the US, equity markets ended another positive week despite US regulators ordering 10 of the nation's largest banks to add a total of $74.6bn in equity following the completion of stress tests. By Friday the banks had already attracted $11.5bn, a clear indication that they would rapidly raise the cash.

The Dow Jones Industrial Average ended up 4.41% but is still negative year to date, the Standard and Poor's 500 was up 5.93 %, while the Nasdaq Composite managed to gain 1.16% this week and is now 10% up year to date.

The positive trend continued on Friday despite news that US unemployment climbed to 8.9%, its highest level since 1983, but better than economists' predictions. In all, 13.7m people are now unemployed, with 5.7m jobs culled since the recession began in December 2007.

The Malta Stock Exchange (MSE) index continued its recent recovery this week, advancing by a very healthy 4.19%, ending the week at 2,948.154. The index gained on every trading day except Wednesday. Most equities on the MSE were traded this week, with six closing in positive territory, four closing negative and two remaining unchanged.

There were 308 deals worth a total of over €3.6m registered on the MSE this week.

There were 205 transactions for a total of €638,103 in the equity market, 55 deals for a total of €456,766 in the corporate bond market, 39 transactions for a total of €1.2m in the government bond market, and eight deals for a total of just over €1.3m in the Treasury bills market.

After their interim results were announced, Bank of Valletta plc fell 1.83% this week to close at €2.355. The bulk of this moderate loss occurred on Monday when the equity shed 4.13% to reach €2.30. The subsequent trading sessions saw the share price recover tepidly as it fluctuated mostly upwards having traded at a low of €2.299 and a high of €2.36. A total of 67,119 shares traded across 62 deals.

Similarly, HSBC Bank Malta plc had a fairly mixed week, with healthy gains in the initial trading days being slightly eroded mid-week but still ending the week substantially higher at €2.50, a 4.17% gain. There was steady volume throughout the week as 85,663 shares changed hands in 54 deals.

Go plc's share price soared five per cent on Monday, with some further gains on Thursday based on moderate volume. The share price gained 6.19% on the week after 13,600 shares were traded in 10 deals.

One of the best performers this week was International Hotel Investments plc, backed by decent volume. The share price soared steadily throughout the week to reach €0.92 by Friday, up a healthy 15%, after a total of 22 deals involving 56,654 shares spread evenly throughout almost every trading session.

Medserv plc closed the week at €3.55, a loss of nearly 3.80%, after a significant 40,000 shares were traded in 13 deals. The equity fell on Monday on heavy volume, rebounding slightly the following day.

Notwithstanding a decent volume of 22,944 Maltapost plc shares changing hands in 14 deals, the equity's share price remained static this week. The gains reported on Tuesday when the bulk of trading took place were fully reversed the following trading session on much lighter volume.

Lombard plc shares enjoyed a positive week, strengthening 1.89% on the back of seven trades involving 6,510 shares, with their price closing at €2.70 on the last trading day.

There was heavy volatility in MIA plc's share price this week as minimal volume on Wednesday caused it to lose nearly four per cent. The opposite and nullifying effect occurred on the last trading day, once again on very light volume, when the price soared back to its previous week's level to close unchanged at €2.10.

Fimbank plc and Middlesea plc shares both lost ground on Wednesday on light volume. Subsequent trading throughout the week failed to boost their share prices with the former shedding 4.69% and the latter tumbling nearly 7.8%.

The share price of Plaza Centres plc rose 1.18% this week, after 1,000 shares were traded on two deals, closing the week at €1.72.

On Thursday, Global Capital plc's share price advanced by a massive 50% to close at €1.50 after five trades of a meager 834 shares, reversing some of the losses experienced on similar low volume in mid-April.

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 call 2122 4410 or e-mail jmizzi@jmfs.net.