Financial news

Trading during yesterday's session at the Malta Stock Exchange resulted in yet another negative outcome for the index which declined by 2.9 per cent to terminate at 3,060.92 points. Activity in the equity market was spread over a total of six different listings, with a negative performance being registered in the three largest listings in terms of market capitalisation.

HSBC Bank Malta headed for the second consecutive day the list of losers as the equity decreased by a further 15c or 5.4 per cent to terminate at €2.65. The Bank was nevertheless the day's most liquid and actively traded equity as investors swapped an aggregate 17,341 shares over 13 deals.

Bank of Valletta was also a loser during the session as its share price lost 7c or 2.4 per cent to close at €2.90. Investors in the financial services company transacted a total of 4,910 shares in 5 deals for a market consideration of €14,339.

The shares of International Hotel Investments also depreciated during the session as selling pressure forced the price down by three cents or 3.4 per cent to terminate at €0.845. The hotel property and management company transacted a single deal for a market value of €5,652. Meanwhile, the board of directors of the company approved the half yearly financial report for the period ended June 30. The company registered a loss before tax of €1.4 million during this period.

Go shares also ended in the red as the equity shed 2c which equates to a 1.1 per cent decline to terminate at €1.78. Trading activity in the quadruple play communications' company consisted of two investors swapping 5,000 shares.

Both Middlesea Insurance and Simonds Farsons Cisk were non-movers during the session as the equities closed unchanged at €1.759 and €1.68 respectively. Activity in the former was made up of 1,500 shares being transacted over a single deal whilst in the latter investors exchanged 1,126 shares over three deals.

In the fixed interest sector of the market, activity was spread over 5 government stocks and eight corporate bonds. The highest turnover in the sovereign debt market was registered in the 5.7 per cent MGS 2012(III) as €400,000 nominal were transacted over a single deal to close at €107.72. The sole gainer in the corporate debt issues was the 6.25 per cent International Hotel Investment 2015-2019 which rose by 25 ticks over a single deal to end at €100.75.

Weekly UK economic review

The economic indicators emanating from the United Kingdom during the week were focused primarily on the Bank of England's Thursday meeting, in which it extended its quantitative easing measures. The week also contained other significant data particularly from the manufacturing sector, as activity grew for the first time since March 2008.

Bank of England policymakers decided to increase the £125 billion asset-buying scheme by a further £50 billion, which would raise the size of its bond purchase scheme to an unexpectedly large £175 billion. The decision enables the central bank to continue its programme of asset purchases with newly created money, which it started in March to boost Britain's ailing economy. Moreover, as expected the central bank left interest rates unchanged at their all time low of 0.5 per cent. Meanwhile, British manufacturing activity benefited from the fastest flow of new orders since November 2007. In fact, the manufacturing Purchaser's Managers Index rose above the 50.0 mark that divides contraction from growth at 50.8 from an upwardly revised reading of 47.4 in June. This was also well above economists' expectations of an increase to a reading of 47.7.

British consumer confidence also edged up in July as the Nationwide headline consumer confidence index rose to a reading of 60 from an upwardly revised 59 in June. This increase was in part supported by higher house prices and greater optimism about the economy. In fact, house prices rose for the third consecutive month in July as they increased by 1.3 per cent month-on-month to £159k.

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.