Financial news

The equity market sprung to life during Thursday's trading session at the Malta Stock Exchange with a flurry of companies attracting trades in their shares, nonetheless volumes were relatively limited. Four equities registered a decline in price, as opposed to two that registered gains, but the MSE Index still managed to close higher by a single point at the 2,944 mark.

Bank of Valletta was once again the day's most actively traded equity with 5,046 shares changing hands across six transactions. Buying activity helped the bank recoup almost its previous session's entire decline, this time gaining 4c9 or 1.9 per cent to reclaim the €2.649 level. HSBC Bank Malta closed the day unchanged at €2.60 following the transaction of 7,500 shares which were swapped across five transactions. Similarly, Lombard Bank Malta and FIMBank remained stagnant at Wednesday's closing levels following the transaction of single deals.

Go inched higher by one cent or 0.6 per cent as 2,313 shares were purchased across four transactions. The local telecom incumbent closed the session at €1.82, its highest reading since early February 2009.

Crimsonwing was the day's biggest loser as a single investor in the IT specialists sold 14,200 shares at the €0.25 level. This level represents a 35.9 per cent discount to its previously traded price and values the company at half what it was worth following its November 2007 initial public offer. In the same sector, RS2 Software dropped 1c1 or 1.6 per cent as two investors struck 5,000 shares across a single deal.

Medserv, logistical managers and suppliers to the oil industry in the Mediterranean shed 5c or the equivalent of 1.4 per cent as fresh buying activity at the €3.5 level was immediately met by supply.

Middlesea Insurance tumbled to its lowest level since 1998 on the sale of 3,000 shares across two transactions. Both deals were struck at the €1.86 level, which equates to a seven per cent decline over its previous closing level.

Elsewhere in the market, single deals in Malta International Airport and GlobalCapital did not alter their previous closing prices of €2.16 and €1.50 respectively.

Weekly UK economic review

There was a modest improvement in economic data last week. But activity indicators remain at extremely weak levels and are still consistent with an economic contraction across the developed world. In the UK, the process of households paying down debt is getting into gear, however, this will have a long way to go.

Data released last week showed that households have shaved 11 per cent off their personal loan balances since February 2008, taking balances below £60 billion for the first time since 2004. Mortgage debt has also fallen, but by just 0.15 per cent since its peak of £1.26 trillion in November. Since mortgages account for more than 80p in every £1 of household debt, reducing the near £1.5 trillion of household debt outstanding is not going to be a quick process.

Meanwhile, the Nationwide Building society stated that British house prices rose for the second month running in June, leaving them less than 10 per cent down compared to a year ago. Another boost that the British economy is emerging from recession came from the Purchasing Manufacturing Index that rose to 47 from 45.4 in May, the highest reading since May 2008 and just ahead of analysts' forecasts.

Gross Domestic Product figures issued earlier on during the week, did steal some of the limelight as it was evidenced that the British economy shrank at its fastest pace in more than 50 years in the first three months of 2009. Nonetheless, most economists are relatively optimistic that the economy is slowly turning around and moving closer to the end of the tunnel.

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.