Financial news

Trading for the first day of the week at the Malta Stock Exchange resulted in a positive outcome as the index rose by 0.4 per cent to terminate the session at the 2,961 level. Activity was relatively muted with investors swapping shares across a total of 23 deals, trading in three active components which all ended the day in positive territory.

Go was the day's best performer on strong buying activity which pushed the price higher by 3c1 or 1.8 per cent to reclaim the €1.73 level. The quadruple play communications' company was also the most liquid and actively traded listing with investors swapping an aggregate 15,686 shares across 11 deals for a market consideration of €26,827. At the end of the session, 1,000 shares were best bid at €1.73 while 3,000 shares were best supplied at €1.74.

Bank of Valletta moved higher by 2c5 or 1.1 per cent notwithstanding the fact that the equity commenced trading without the attached rights to receive a gross interim dividend of 3c5 per share. The day's activity consisted in 7,291 shares, carrying a market consideration of €17,270, which were exchanged across 10 transactions with the price moving gradually higher to terminate at the day's best level of €2.38.

HSBC Bank Malta too closed in positive territory during yesterday's session, gaining 1c which equates to a 0.4 per cent increase to end the session at €2.51. Activity was relatively soft with just 2,000 shares being exchanged across two transactions.

In the fixed interest sector of the market, activity was spread over three government stocks and seven corporate bonds. The best performance in the corporate stocks was the 7.50 per cent Hotel San Antonio 2012 which rose by 100 ticks over 2,047 shares struck over two deals to terminate at €101.00. Among sovereign debt issues, the 6.35 per cent MGS 2013 climbed 28 ticks as two investors swapped 3,495 nominal at €111.63.

Weekly US economic review

Economic indicators emanating from the United States suggest that the intensity of the recession which is now in its 17th month was starting to fade. The rate of contraction in the manufacturing and services sector as well as in the housing market have slowed down, signalling some level of stabilisation despite being still in recessionary territory.

The Institute for Supply Management reported that the US non-manufacturing sector rose to 43.7 from 40.8 in March, outperforming the expectation of analysts who forecasted a smaller increase. The services sector (non-manufacturing) in the US includes businesses like banks, airlines and hotels representing about 80 per cent of the country's economic activity. Despite being the seventh consecutive month of contraction for the ISM non-manufacturing index, the results suggest a positive trend that the economic downturn is bottoming out. Meanwhile, data in the housing market was also encouraging as there was an increase in signed contracts for home purchases to first-time buyers who took advantage of the low prices and mortgage rates, as well as an $8,000 tax credit. Other data showed that the pace of decline in sales of new and previously owned homes was moderating while construction spending edged higher.

Government data reflected that despite the rise in the unemployment rate which soared to 8.9 per cent, the highest level since 1983, the number of layoffs has declined to the lowest level since October 2008.

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.