Financial news

Trading activity for yesterday's session on the Malta Stock Exchange ended on a negative note as the index dropped by 1.3 per cent to terminate at 3,053.23. In the equity market activity was spread over four different listings as investors struck an aggregate of 26 deals.

International Hotel Investments shed 6c, which equates to a 6.8 per cent decline in its share price to close at €0.82. The hotel property and management group was however the day's most liquid equity as investors transacted a total of 20,368 shares over eight deals for a market consideration of €17,073.

In the banking sector, HSBC Bank Malta was the only non-mover during the session as the listing ended unchanged at €2.65. The bank was nevertheless the day's most actively traded equity as investors struck a total of nine deals.

Bank of Valletta succeeded in regaining its €3 level which it lost during Wednesday's session. This happened when buying activity resulted in a 0c1 increase, despite previously trading at an intra-day low of €2.99. Activity in the financial services company was spread over 8,665 shares struck over eight deals.

FIMBank's trading session was characterised by low volume as two investors exchanged a mere 105 shares. The trade finance specialist was a gainer as its shares appreciated by a marginal 0.4 per cent to end at $1.295.

Weekly UK economic review

The economic indicators emanating from the United Kingdom over the past week brought further conflicting data, as government spending continued to fuel the uptrend in economic data. Gross Domestic Product results were better than expected, but manufacturing activity has surprisingly declined.

The UK's economic performance was marginally better than previously anticipated as revised data showed that the economy contracted by 0.7 per cent in the second quarter, rather than 0.8 per cent. Government spending has provided more of a boost to economic output than expected. In fact, government spending increased by 0.8 per cent in the second quarter compared to the 0.2 per cent in the first three months of the year, while analysts were anticipating an increase of 0.6 per cent. Contrary to this, private consumption remained at a negative 0.7 per cent in the second quarter, which is still better than the negative 1.3 per cent registered in the first quarter. Meanwhile, a surprise drop in British manufacturing activity has cast doubts on the strength of a quick economic recovery.

The headline's Purchasing Managers' Index for manufacturing dropped for the first time since February, declining to a reading of 49.7 in August from a downwardly revised 50.2 in July, much less than the 51.5 mark expected by economists.

In the housing market, the number of mortgages approved in the UK rose again in July, providing further evidence that buyers are returning to the market, albeit tentatively. Mortgage approvals rose by 2,000 to 50,000, increasing by an annual 53 per cent as low interest rates has boosted affordability and reduced the cost of mortgage interest. Purchase approvals however, remain low, close to half their 10-year average.

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.