Financial news

Trading activity for the mid-week session on the Malta Stock Exchange resulted in a negligible increase of the index which closed practically unchanged from the previous session at the 2,944.2 point. Activity in the equity market was unusually low as investors struck a total of six deals over three different listings with gains registered in just a single equity.

Bank of Valletta was the session's sole gainer as the equity edged up by a marginal 1c5, which equates to a 0.6 per cent increase to terminate the day at €2.65. Investors in the financial services company transacted just 1,500 shares over two deals.

On the contrary, Go was the day's laggard as its shares depreciated by 2c or 1.1 per cent to close the session at €1.78. Trading activity in the quadruple play communications' company was muted when two investors swapped a mere 500 shares.

HSBC Bank Malta was the session's only non-mover as the equity closed unchanged from Tuesday's session to close at €2.61. The bank was nevertheless trading at an intra-day high of €2.611 but selling pressure pushed the price slightly downwards to close at its present standing. The financial services company was in relative terms the day's most liquid and actively traded equity as investors exchanged just 2,950 shares over three deals.

In the fixed interest sector of the market, activity was higher than in the equity market and spread over seven government stocks and six corporate stocks. The highest turnover in the government securities was registered in the 5% MGS 2021(I) as €921,730 nominal were transacted over three deals for a closing price of €102.52. In the corporate debt issues, the best performance was registered in the euro trance of the seven per cent FIMBank 2012-2019 which increased by 149 ticks over a single deal to terminate at €102.

Weekly eurozone economic review

Economic news in the eurozone remained weak as unemployment continued to increase, retail sales fell further and signs of a recovery in the eurozone's dominant services sector took a backward step. The week featured the European Central Bank's meeting, which, as expected, saw the Frankfurt-based bank leave the main refinancing rate unchanged at one per cent.

ECB president Jean Claude Trichet was generally neutral in his comments over the economy, despite voicing concerns over the 2009 outlook. Nevertheless, his overall comments suggested that the bank is in a holding pattern to await further developments in the real economy.

Mr Trichet was keen to emphasise that the bank had prepared an exit strategy if there was any evidence of inflation risks. Meanwhile, the unemployment rate in the 16-nation eurozone rose to 9.5 per cent in May, hitting its highest level in ten years from April's 9.3 per cent. This figure was higher than the 9.4 per cent expected by economists.

The eurozone's services Purchasing Managers Index was revised upwards to a reading of 44.7 in June from its previous reading of 44.5, declining from its seven-month high in May when it stood at 44.8. This was the 13th consecutive month that the readings were in contraction territory, below the 50-mark that would signal a return to growth.

Eurozone retail sales fell further than expected in May, data showed on Friday, dampening hopes that an improvement in consumer spending might ease the recession. In fact, retail sales in the euro currency area fell 0.4 per cent month-on-month, which was worse than the 0.1 per cent drop expected.

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.