Financial news

Equities reversed trends during the mid-week session with buyers returning to the market and helping the MSE Index to gain 0.1 per cent to terminate at 2,943 points.

Malta International Airport was the day's best performer moving higher by 6c8 which equates to 3.3 per cent as two investors exchanged 700 shares at the €2.16 level. At the end of the session, a particularly large spread developed with 6,300 shares best bid at €2.092 while on the other side 2,000 shares were offered at the best price of €2.23.

Bank of Valetta was once again the day's most liquid and actively traded equity with 8,731 shares, carrying a market consideration of €22,651, being exchanged across 14 transactions. Initial selling activity saw the price dip to the €2.58 level before fresh buying activity recouped all the day's declines to help the equity close unchanged at €2.60.

The day's activity in HSBC Bank Malta consisted of 3,580 shares which were exchanged across five transactions. A similar pattern to that witnessed in Bank of Valletta shares occurred with the equity dropping to an intra-day low of €2.579, yet terminating the session unchanged at the €2.60 level.

Likewise, Go closed Tuesday's session unchanged at €1.81 following the transaction of 3,500 shares.

Separately, Simonds Farsons Cisk announced the creation of 4,285,714 bonus shares of a nominal value of €0.30 each, bringing the total number of ordinary shares in issue to 30 million, thereby giving the food and beverages company a current market capitalisation of €54 million.

In the fixed interest sector of the market, activity was spread across four corporate bonds and nine government stocks. The segment's largest activity was witnessed in the 3.60% MGS 2013 where 131,000 nominal were exchanged across five transactions at €100.15. Generally speaking, sovereign bond prices moved lower across the board, particularly the longer end of the curve where trading was most active.

In a notice to its members, the Malta Stock Exchange announced the admission to the Official List of €50 million 5.35% Bank of Valletta Subordinated Bonds 2019 which will commence trading today.

Weekly eurozone economic review

Economic data in the eurozone seems to be somewhat lagging the consumer confidence surveys as most assessments of the business and consumer sentiment have constantly risen over the recent months while economic data is still seen as rather opaque.

The flash PMI for the euro area for June showed a fractional improvement. The composite PMI, a good early indicator of activity, rose marginally to 44.4 this month, some way up from February's low of 36 but still stubbornly below the 50-mark that would signal a return to growth. The different pressures on the euro area mean the performance of countries within the single currency area is not identical. Germany is still reeling from the decline in external demand that has knocked the wind out of its export sector while countries like Ireland and Italy are adjusting after large property bubble bursts and recent sovereign credit rating downgrades.

Indeed, house prices in Ireland continued their downward spiral in May matching the kind of declines we have seen in the UK. Prices have dropped 21 per cent since their peak in February 2007 and now stand at the same level they were in mid-2004. Low levels of demand and a supply overhang suggest the market has some way to go before it reaches a bottom. As prices have risen four-fold since 1996, while incomes have not even doubled, affordability was stretched. With a deep recession underway income growth is unlikely, leaving prices to make most of the adjustment.

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.