Global markets resume bull run

Upward momentum in foreign stock market indices, particularly the major European, UK and American ones, was reignited last week. The UK FTSE-100 index surpassed the psychological 5,000 mark, a level not reached since the latter part of September 2008.

Similarly, the bullish sentiment in equity markets in general remained intact, helping indices to close at yearly highs. The American Standard and Poor 500 index logged in an encouraging weekly gain following positive comments by major institutions regarding a possible end to the current recession.

By contrast to most major foreign indices, the Malta Stock Exchange (MSE) index fell 0.71%, ending the short trading week at 3,032.468 points, despite gains on Thursday and Friday. Since the start of 2009, the MSE index has lost nearly 5.5%, underperforming global indices.

Last week, eight equities were traded, with five closing lower, two unchanged and only a single equity registering gains. HSBC Bank Malta plc (HSBC) was the best performer, yet gains were a minimal 0.75%. Middlesea Insurance plc performed worst, falling 6.20% to close at €1.65.

Nearly €8.4m worth of transactions spread over 203 deals took place on the MSE last week, but only 58 deals for €145,059 were in the equity market.

HSBC was the most traded equity as 22,273 shares changed hands in 27 deals. The week started positively with fair volume, leading the share price to climb 1.85% on Monday, increasing to €2.699. The following trading sessions saw the price oscillate between €2.66 and €2.67, at which it closed. Overall, the equity gained €0.02, clearly outperforming most equities traded on the MSE this week.

Bank of Valletta plc (BoV) had a fairly mixed week, trading lower on Monday and Wednesday, only to recover all losses in the following two sessions. Volume was generally spread out across all trading days with a total of 12,155 shares exchanged in 15 transactions. The price of the equity fluctuated between a weekly low of €2.949 and a high of €3, closing unchanged for the week at €2.99.

On a year-to-date basis BoV has maintained its top position when compared to the other listed equities, generously outperforming the index and yielding a positive performance of 3.40%.

A total of 12,550 shares were traded over six deals in Go plc last week. The bulk of trading in this stock occurred on Monday, hammering the equity price down by 5.03%. Some trading on Friday failed to recoup any of the losses, with the share price closing at €1.70, clearly below the average at which the equity had been trading over the past several weeks.

Last week's move has plunged Go into negative territory on a year-to-date basis. Notwithstanding this negative performance, the equity is still among the top performers.

A single trade of 1,260 shares in International Hotels Investments plc on Monday led to a €0.02 (-2.44%) reduction in the price. Four further trades during the week did not change the price , which closed at €0.80.

Two deals involving 4,000 Lombard Bank Malta plc shares took place last week, shaving a minimal 0.04% off the share price, which closed at €2.549.

Santumas Shareholdings plc maintained its share price at €3.04 despite a single trade of 1,250 shares on Wednesday.

On the other hand, a single trade of 2,198 shares in Maltapost plc shares on Friday lowered the price by 1.43%.

The share price of Middlesea Insurance plc (MSI) fell a further 6.20% last week, closing at €1.65. However, this significant drop was a result of a single deal of an irrelevant 194 shares on Wednesday. Nevertheless, the total year-to-date capital erosion of MSI now stands at -35.29%, making it the worst performing equity on the MSE's official list.

A total value of nearly €4.8 million was dealt in the Malta Government Stock market last week, with the bulk of trading concentrated in a single issue, the 5.7% MGS 2012.

From an international point of view, last week saw an improvement in most benchmark yields following previous weeks' hefty downward moves. Local MGSs had mixed results, yet most long-term issues suffered some losses.

A total of €1.1 million worth of local corporate bonds were traded last week, with the best performing bond being the 6.7% Mizzi Organisation Finance plc 2009-2012. This bond climbed 2% over the previous week, closing at €102.

Trading in the Treasury Bills market amounted to nearly €2.3 million.

Last week, Melita Capital plc announced an offering to the public of €25 million 7.15% bonds due 2014-2016 issued at par (€100). In the event of over-subscription, the amount may be increased by an additional €5 million. An application has been made for the bonds to be listed on the MSE's alternative companies list.

This article, which was compiled by Jesmond Mizzi, managing director of Jesmond Mizzi Financial Services Limited (JMFS), 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, Tel: 2122 4410 or e-mail jmizzi@jmfs.net.