Financial news

Trading activity for the first day of the week at the Malta Stock Exchange commenced on a marginally positive note as the Index edged up by less than 0.1 per cent to close practically unchanged from last Friday's session to close at 3037. Activity in the equity market was relatively subdued as investors swapped an aggregate four deals in three different listings.

Go was the session's most liquid equity as 4,000 shares were struck over two deals for a market consideration of €7,110. The quadruple play communications' company was also the day's only gainer as the equity rose by 3c which equates to a 1.7 per cent, for a closing price of €1.78. At the close of the session there were 3,100 shares on the best offers side at €1.80 against 1,000 shares best bid at €1.78.

Maltapost was the day's laggard as the equity declined by 4c9 or 6.9 per cent to terminate the session at €0.661 which is a new low for the company. Trading activity was nevertheless on the low side as two investors swapped a total of 1,000 shares.

GlobalCapital was the sessions' only non-mover as the equity terminated unchanged at €1.50. Volume was very low as 600 shares were transacted over a single deal for a market value of €900.

In the fixed interest sector of the market, activity was spread over four government stocks and 10 corporate bonds. The best performer among the government securities was the five per cent MGS 2021 which rose by 98 ticks over six deals to terminate at 101.86.

In the corporate debt sector the 5.6 per cent GlobalCapital 2014/16 and the 6.75 per cent United Finance 2014/16 were the sole gainers as they rose marginally by 50 ticks and a single tick to close at €85.0 and at par respectively.

The week ahead - Economic indicators for week starting June 22

Leading economic data for the week will this time shift from last week's focus in the United States towards the eurozone where analysts are expecting a level of improvement in various economic indicators, particularly in Germany, which is the largest economy in the 16-country member of the euro.

In the US data schedule for the coming week is set to be much quieter than last week's. Nevertheless, data releases in the housing market for today and tomorrow should demonstrate that activity continues to improve. In fact, the House Price Index's month on month reading for April is expected to increase by -0.3 per cent from a low of -1.1 per cent during the previous month.

The Federal Reserve meeting set for today is also attracting attention because this could shed light on specific information regarding how the Fed is contemplating withdrawing from its zero-interest rate policy and the quantitative easing measures. Recently, rumours have been circulating in the market that the Fed could again strengthen its commitment to keeping rates very low over a longer period in the statement accompanying the rate decision in order to rein in market expectations on early rate hikes and to push down yields in the fixed-income market.

On the other side of the Atlantic, interest during the week will focus on the German Ifo index and the Purchasing Manager's Index, with both readings expected to register an increase. The gains in last week's ZEW survey has prompted numerous analysts to bet for an improvement in the Ifo index. Meanwhile, the expected improvement in the Purchasing Manager's Index for manufacturing is higher than that for the services sector. In the former the expectation is an increase of 42.4 from a previous reading of 40.7 while in the latter the anticipation is a reading of 45.8 in June from the previous month's 44.8. Despite these minor improvements the indicators are still below the 50.0 level that separates contraction from expansion.

In the UK, the week will be characterised with data in the housing market where nationwide house prices during the month of June are expected to decrease. In fact, in the month on month reading for June analysts are anticipation that prices declined by 0.5 per cent from there previous 1.2 per cent. This could further support new home buyers in the country.

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.