Global equities continue to rally

US equities continued to rally this week as Federal Reserve chairman Ben Bernanke urged the US Congress to bring down long-term budget deficits. Investors were encouraged on Friday by the news that US employers last month had shed far fewer jobs than anticipated - 345,000. This is the lowest monthly job loss since September 2008, raising hopes that the world's biggest economy could be past the worst of the recession.

The Dow Jones Industrial Average ended the week up 3.09%, the Standard and Poor's 500 rose 2.29% and the Nasdaq Composite closed 4.21% higher and has now registered a whopping 17% increase, year to date.

The European equity markets also rose for this week as the European Central Bank and the Bank of England left interest rates unchanged at 1% and 0.5% respectively. In Paris, the CAC 40 ended the week up 1.87%, in London, the FTSE 100 index rose 0.48%, while the Xetra Dax in Frankfurt closed 2.76% up despite the Bundesbank's report that Germany's economy will contract by over six per cent this year.

The Malta Stock Exchange index fell 0.58 per cent this week, closing at 3,041 points. The index is once again experiencing a year-to-date loss of over five per cent. Eight equities were negotiated this week with five closing in negative territory, one ending positive and two remaining unchanged.

This was a quiet week all round as investors focused their attention on the Bank of Valletta Bond issue. In fact, a total of 93 deals were registered over the week with a turnover of just over €4m, compared to €11m last week.

In the equity market, 93 transactions were executed for a total of €251,531, with the index experiencing only one positive day this week.

The share price of Bank of Valletta plc (BoV) closed the week at €2.449, up 2.47% as 41,198 shares changed hands in 32 transactions. BoV was once again the most traded equity this week both in terms of volume of shares exchanged and the number of deals executed, and gained ground every day this week.

Indeed, this was BoV's week. On Thursday, the bank informed financial intermediaries that the pre-placement of the bond issue was heavily oversubscribed. Likewise, it seems BoV's shareholders responded well to the preferred offering, as no official figures were announced by Friday evening due to the large volume of applications received by the bank.

The offer opens to the public tomorrow but it is sure to close shortly after given the massive demand for the bond. Clearly, a vote of confidence for BoV.

HSBC Bank Malta plc (HSBC) lost ground again this week as the share price fell 0.69% to close at €2.58. A total of 38,422 shares were traded, spread across 23 deals, which was more than last week. The equity traded at a low of €2.55 and a high of €2.584.

Fimbank plc also had another quiet week. Just 5,200 shares changed hands in four transactions causing the share price to fall 0.78% to close at $1.28.

The week's worst performer was Middlesea Insurance plc, which lost 11.50% after a mere 200 shares were traded in two deals. The share price closed at €2, a level last seen in February 1999.

The share price of Malta International Airport plc ended the week down 5.66%, having gained nearly seven per cent the previous week. The equity was also the victim of low trading when just 838 shares traded in two deals pulled the price down to €2.20.

International Hotel Investments plc fell one per cent this week on one deal of 131 shares as the equity closed €0.99.

Medserv plc also traded once when 500 shares changed hands at €3.55.

Go plc's share price remained unchanged at €1.72 despite 25,761 shares changing hands across 28 deals. The share price traded at a high of €1.74 and a low of €1.72.

In the government bond market, 40 transactions were registered across 12 bonds for a value of €447,356. The price of seven bonds fell while three traded in positive territory.

There were 58 transactions in the corporate bond market for a value of €670,415 as 14 bonds traded this week.

In the Treasury bills market there were 19 deals for a value of just under €2.68m. Four bonds traded at lower prices while three bonds traded higher.

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 or on Tel: 2122 4410 or e-mail jmizzi@jmfs.net.