MSE index turns positive, banks shares surge

The Malta Stock Exchange index returned to positive territory this week as it gained 3.93 per cent, closing at 3,235.154 points. The index which is now up 0.84 per cent only registered losses on Thursday as bank shares surged during the week.

Trading in the equity market continued to increase this week, as shares traded increased by 66 per cent. A total of 236 deals were registered, as 346,226 shares changed hands, for a total value of €832,657. Over sixty per cent of the volume traded took place in HSBC Bank Malta plc and Bank of Valletta plc shares with each trading over 109,000 shares.

As the equity market strengthened the Treasury announced that it will be issuing €100 million (subject to an over-allocation of €20 million) worth of the two Government Stocks, namely, 3.6% MGS 2013 (IV) F.I. at €100.25 with a yield to maturity of 3.53 per cent and 5% MGS 2021 (I) F.I. at €101.75 with a yield to maturity of 4.81 per cent. Applications will open next Wednesday, August 5.

This week a total of 386 deals were registered with a turnover of over €12.17 million. In the corporate bond market 88 transactions were registered for a value traded of over €1.23 million, while a total of 47 transactions were registered in the government bond market for a value of over €3.8 million. In the Treasury bills market a total of 11 transactions were registered for a total value of €6.27 million.

For the second consecutive week, all banking equities registered gains on the week. Bank of Valletta plc was the best performing equity this week, as it registered a staggering increase of 11.03 per cent after the interim directors' statement was issued on Monday. BOV closed the week at €2.999, an increase of €0.298. The equity traded at a high of €3 and a low of €2.75.

The directors reported that during the three months from April to June, there were no material events that had an impact on the financial position of the bank or the group. They added that, after the financial turmoil prevailing in the first six months of BOV's financial year, there is a sense of cautious optimism emerging in the international markets. As a result of improved capital market conditions, the third quarter saw a write-back of a proportion of the markdowns incurred on the financial markets and investments book during the first six months. This effected BOV's profitability, which was significantly higher than that reported for the half year. The directors also reported a sustained and encouraging growth in deposits of the bank despite the issuance of new bond.

FIMBank plc continued its upward trend from last week, as it increased by $0.09. The closing price for the week was $1.29, a rise of 7.5 per cent, as 29,071 shares changed hands across 13 transactions.

The share price of HSBC Bank Malta plc was up again week-on-week for the fourth consecutive week. HSBC registered a rise of €0.13, closing at €2.98, thus registering an increase of 4.56 per cent. HSBC traded at a high of €3 and a low of €2.85.

Yesterday afternoon HSBC Bank Malta plc announced the results for the six months ended June 30 this year. Profit before tax for the period declined by €11.8 million to €34.8million a drop of 25.3 per cent. The board declared an interim dividend of 7.7 euro cents per share (five euro cents net of tax).

Lombard Bank plc registered an increase of 1.96 per cent, after last week's marginal rise of €0.001. Lombard closed the week at €2.60, a rise of €0.05, as 16,000 shares changed hands on 11 deals.

Malta International Airport plc also registered an increase in its share price as it appreciated by €0.12 yesterday, having traded 9,335 shares on eight deals. The closing share price for the week was €2.35, a rise of almost 5.4 per cent.

MIA issued its half yearly results yesterday reporting a drop in profit before tax from €5.1 million for the six months to June 2008 to €4.7 million for the six months to June this year. In a statement accompanying the financial results the company explained that the drop in profits reflects the loss of revenues due to a downturn in passenger numbers and an increase in operating costs and depreciation charges. The company declared a net interim dividend of €0.06 per share.

Maltapost plc was the other equity to register a rise in its share price as it gained a marginal 0.14 per cent on the week, closing the week at €0.70, after trading 8,500 shares on seven transactions.

Crimsonwing plc, International Hotel Investments and Medserv plc closed the week unchanged at €0.39 (15,000 shares), €0.899 (6,000 shares) and €3.50 (12,000 shares) respectively.

In their annual financial statements for year ended March 31 this year issued this week, Crimsonwing plc reported that revenue increased by 26.44 per cent during the year, from €9.55 million to €12.07 million. However, the company made a net loss after tax of €499,932, compared to a profit after tax of €823,752 in 2008. The earnings per share decreased from €0.04 to a negative €0.02. The board of directors did not recommend the payment of a final dividend.

RS2 Software plc, Go plc and Middlesea Insurance plc all registered declines during the week. RS2 fell by 4.27 per cent to €0.65, Go fell a minimal 0.06 per cent to €1.75 and MSI declined by 4.86 per cent to close the week at €1.76.

During the week, Plaza Centres plc announced their financial results for the six months ending June 30. The company registered a profit before tax of €654,024, compared to €596,459 in 2008, a rise of 9.65 per cent. Revenue rose from €874,849 in 2008, €979,378 this year, an increase of almost 12 per cent mainly due to the new extension that was completed last year. The board of directors did not recommend the payment of an interim dividend.

This article which was compiled by Jesmond Mizzi Financial Services Ltd does not intend to give investment advice and the contents therein should not be construed as such.

JMFS is licensed to conduct investment services by the MFSA.

The directors or related parties, including the company, and their clients are likely to have an interest in securities mentioned in this article.

For further information contact JMFS at 67/3, South Street, Valletta or on telephone 2122 4410 or e-mail jmizzi@jmfs.net.