Financial news

Trading for the mid-week session at the Malta Stock Exchange resulted in a negative outcome as the index was pushed down by 0.8 per cent to terminate the session at the 3,056.58 level. Activity in the equity market was spread over an aggregate 23 deals in five different listings.

Crimsonwing headed the list of gainers during the session as the equity gained 14c which equates to 56 per cent to close the day at €0.39. Activity in the software developer was spread over four deals for a market consideration of €3,771.

HSBC Bank Malta shares edged up further during the session as the equity gained 2c or 0.7 per cent to terminate at €2.72. Investors in the financial services company transacted a total of 5,585 shares over four deals.

Bank of Valletta was the session's most actively traded equity as investors struck 10 deals for a market value of €24,274. The bank was also a gainer during the day albeit registering only a marginal one-tenth of a cent gain to end the session at €2.70.

Likewise, Lombard Bank Malta shares also increased during the session by a mere 0c1 to close at €2.55. The bank saw a volume of 4,792 shares exchanged by two investors.

International Hotel Investments defied the day's positive trend and was the sole equity to close the session in red as it declined by 5c1 or 5.4 per cent to terminate at €0.899. Trading activity in the hotel property and management group was spread over four deals for a monetary value of €9,005.

Meanwhile, Malta International Airport announced that it has taken a commitment for the construction of a building within the airport complex. The building shall consist of nine levels, two of which shall be used for underground parking and shall have a total rentable area of approximately 14,000 square meters. This project will entail a total investment of €16 million and completion of the building is scheduled for the third quarter of 2011.

In the fixed interest sector of the market, activity was spread over five government stocks and 12 corporate bonds. The highest turnover in the government stocks was registered in the 4.8 per cent MGS 2016(II) as investors exchanged €177,953 nominal over three deals to close at €104.05.

Weekly eurozone economic review

The economic headlines emanating from the 16-country member states of the eurozone were largely dominated by inflation figures during the reported period. The week also contained noteworthy data regarding producer prices in Germany and industrial new orders.

A steep drop in both fuel and food costs caused the eurozone's inflation to fall year-on-year for the first time in June, declining by 0.1 per cent. There was an expectation that inflation would delve into negative territory given the weakness in consumer demand. A deeper decline in inflation is also expected for this month with added pressure from summer sales combined with energy related base effects. Meanwhile, in the manufacturing sector, production data was disappointing albeit registering a modest gain in monthly terms of 0.5 per cent buoyed by positive results in France, The Netherlands and Germany. The eurozone's manufacturing sector has contracted by a hefty 17 per cent when compared to a year earlier with weak data in both Italy and Spain. The eurozone's new industrial orders plunged to -0.2 per cent during the month of May from its previous -0.7 per cent. Despite registering an improvement, it defied positive expectations of a rebound.

In Germany - the eurozone's largest economy - producer prices posted their biggest annual decline in more than 40 years during June driven by a large drop in energy costs. In fact, producer prices declined by 4.6 per cent year-on-year in June, this is the steepest decline registered since 1968 and more than the predicted 4.1 per cent drop by analysts. This drop in producer's prices should point to further downward pressure in consumer prices in the coming months.

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.