Financial news

Trading activity for the mid-week session on the Malta Stock Exchange resulted in a negative outcome as the index shed a further 0.7 per cent, edging closer to the 3,000 level at 3,020.9 points.

Middlesea Insurance was the day's laggard as the equity slipped by 10c9 or 6.2 per cent to terminate at €1.65, which signals a new low for the current year. Activity in the insurance company was muted as two investors swapped a total of 194 shares.

In the banking sector, HSBC Bank Malta shares were the day's under performers as the equity declined by 1.4 per cent to terminate at €2.66.

Bank of Valletta also ended the day in the red as the equity lost 2c1, which equates to a 0.7 per cent decline and a closing price of €2.949. Volume in the Bank's shares was unusually low as investors exchanged just a mere 550 shares over two deals.

The decline registered in Lombard Bank Malta shares was minimal as the price shed a negligible one-tenth of a cent to terminate at €2.549. The day's activity resulted when 1,000 shares were swapped over a single deal.

International Hotel Investments and San Tumas Shareholdings were both non-movers during the session as the equities closed unchanged at €0.80 and €3.04 respectively. IHI was nevertheless the most liquid equity as investors transacted 14,000 shares over four deals.

Weekly eurozone economic review

The economic data in the eurozone throughout the past week was firmly focused on the European Central Bank's meeting. The week also contained other important economic indicators such as the Purchasing Managers' Index (PMI) and retail sales.

The ECB kept interest rates unchanged at a record low of one per cent. The bank's choice of words during the meeting underlined its "wait and see" stance.

In fact, ECB President, Jean-Claude Trichet, stressed that the central bank was capable of winding up parts of its expansive monetary policy, but the time was not yet right for this. ECB staff also raised estimates for the eurozone's economic output this year and next.

Elsewhere, the European Union statistics office Eurostat confirmed its earlier estimate that the GDP of the 16 countries using the euro fell 0.1 per cent quarter-on-quarter after a 2.5 per cent drop in the first three months of 2009, signalling that recovery has indeed set in.

Meanwhile, the eurozone services economy jumped back almost to recovery during August, as the PMI index of 2,000 companies rose to a reading of 49.9 last month from its prior 45.7 in July. In fact, investor and analyst sentiment rose this month to its highest level since July 2008.

On a negative note, retail sales defied expectations of a rebound and fell in July, declining by 0.2 per cent, largely as a result of lower sales of food, drinks and tobacco. Finally, prices at eurozone factory gates, which signal inflationary pressures earlier in the pipeline, declined 0.8 per cent in July for an 8.5 per cent annual drop.

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.