Financial news

Trading for the yesterday's session at the Malta Stock Exchange resulted in a minor decline of the Index which shed 0.2 per cent to close at 3,046 points. Activity in the equity market was relatively subdued with the lion's share of the day's deals swapped in a single equity. The session was also characterised by non-movers as three out of five listings registered no change in price.

Bank of Valletta was the day's most liquid and actively traded equity as 15,438 shares were struck over 13 deals for a total market consideration of €37,061. The financial services company was also the session's sole gainer albeit increasing by a negligible one-tenth of a cent or 0.04 per cent to close at €2.401.

HSBC Bank Malta was a non-mover for the day as the price remained static from its previous reading at €2.58 despite trading at an intra-day low of €2.57 when buying activity supported the price to its present reading. Trading activity for the bank was spread over six deals and a market value of €37,900.

International Hotel Investments was the only equity to register a decline in the value yesterday, as a mere 131 shares were transacted over a single transaction with both parties to the deal agreeing the €0.99 level as the appropriate price to transact. This equates to a one per cent discount over its previous closing price.

Similarly, low volume characterised the trading activity of Medserv when two investors struck 500 shares without altering its previous price of €3.55.

Go also terminated the session unmoved following Monday's positive showing to close at €1.74 following the exchange of 2,300 shares across four deals.

In the fixed interest sector of the market activity was spread over five government stocks and six corporate bonds. The worst performer among government securities was the 5.00% MGS 2021 fungible issue which lost 196 ticks over two deals to close at €100.60.

Weekly US economic review

Economic data issued by the federal government stated that the US economy shrank slightly less in the first quarter than initially estimated as it contracted by 5.7 per cent from the initial 6.1 per cent. This positive data was further supported by improved consumer confidence.

The recovery in the US manufacturing remained intact during May, despite the struggling auto industry which culminated in the bankruptcy of General Motors. In fact, the Institute for Supply Management said its national factory activity rose to 42.8 from a reading of 40.1 in April. This is nevertheless a reading below 50, which still indicates contraction in the manufacturing sector. Meanwhile, in the housing market, sales of new US single-family homes rose slightly in April as prices have been falling at two per cent a month since February. The Commerce department supported this positive data on a report that shows that new home sales have also increased by 0.3 per cent in April from March. Furthermore, US construction spending unexpectedly posted its biggest increase in eight months in April advancing for the second straight month as the private sector put money into both residential and non-residential projects.

Positive data was also posted by a report from the Labour Department which showed that initial claims for state unemployment insurance benefits dropped in May for a second consecutive week. The reports placed collectively suggest that the intensity of the recession which was characterised by severe job losses was losing momentum.

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.