Investors focus on corporate bonds

On Tuesday, within 45 minutes of the opening of subscriptions of the combined offer announced by Island Hotels Group Holdings plc earlier in the month, it was taken up and oversubscribed. The bond offer by Vassallo Builders Group and TMC Ltd was for €14 million at a coupon rate of 6.5 per cent per annum. The equity offer by Vassallo Builders Group Ltd to the general public was of 8,383,300 ordinary shares at €1 in Island Hotels Group Holdings plc.

On Thursday, Melita Capital plc completed the pre-placement agreements with financial inter-mediaries for their bond issue of €20 million bonds at a coupon rate of 7.15 per cent per annum maturing between 2014 and 2016, and subject to an over-allotment option of €5 million. Subscriptions for the public will open on Monday.

Despite these two new bond issues during this short trading week, corporate bonds traded on the Malta Stock Exchange exceeded government bonds both in volume and value traded. In fact, a total of 72 deals were registered in the corporate bond market for a value traded of over €1.26 million, while in the government bond market 41 transactions were registered for a value of €407,841. In the Treasury bills market a total of eight transactions were registered for a total value of over €2.56 million.

In the equity market, a gain of 0.583 per cent registered yesterday ended three weeks of consecutive losses for the Malta Stock Exchange Index, as the Index closed at 3,008.403 points, gaining 0.1 per cent on the week. This week the Index edged below the 3,000 level, with losses of 0.182 per cent and 0.355 per cent registered on Tuesday and Wednesday. Go plc's final trade yesterday helped the index to register gains this week, and therefore maintain the index above the 3,000 mark. Eleven equities were traded this week, with four closing in positive territory, four remaining unchanged and three closing in negative territory.

Trading on the MSE continues to be low, as a total of 195 deals were registered over the week with a turnover of over €4.49 million of which 74 transactions were executed in the equity market for a total value of €254,552.

The share price of Bank of Valletta plc continued to strengthen its year to date positive performance, as the equity registered an increase of €0.07 or 2.32 per cent on the week. The equity registered the most deals, with 38,749 shares changing hands on 25 deals, for a total value of €117,990. BOV registered increases of 1.33 per cent and 1.31 per cent on Thursday and yesterday respectively, although having retreated by 0.33 per cent on Tuesday. The share price's weekly high was of €3.09, at which it closed, having traded at a low of €3.01.

HSBC Bank Malta plc recovered some of last week's losses, registering a rise of €0.01, closing the week at €2.63. HSBC registered 16 deals of 10,638 shares, and thus registering an increase of 0.38 per cent.

FIMBank plc registered a further decline in its share price, closing the week at $1.195, a loss of 4.4 per cent. FIMBank decreased by almost seven per cent on Wednesday, although having recouped 2.75 per cent on Thursday, as 82,500 shares changed hands on four deals.

Three trades of 1,800 shares registered yesterday helped Malta International Airport plc (MIA) recover from last week's 3.47 per cent loss, gaining almost 5.2 per cent.

MIA closed the week at €2.23, appreciating by €0.11, as the equity was the best performer this week.

International Hotel Investments plc remained unchanged at €0.80, registering two transactions of 2,982 shares.

Simonds Farsons Cisk plc traded only on Tuesday, closing the week at €1.60, a marginal rise of €0.005, as 3,129 shares changed hands across two deals.

During the week, Simonds Farsons Cisk plc announced that the board of directors is scheduled to meet on Wednesday, September 30 in order to consider and approve the company's financial statements for the six-month period ending on July 31, 2009, and consider the distribution of an interim dividend on all ordinary shares held by shareholders on the register as on Friday, October 9.

MaltaPost plc traded only on Tuesday, remaining unchanged at €0.69 for the second consecutive week, as 2,056 shares changed hands over two deals.

Go plc continued its negative run, decreasing a further 6.51 per cent on the week. The closing share price was €1.58, depreciating by €0.11, with 9,675 shares changing hands on 12 deals. The equity decreased by 3.55 per cent and 4.91 per cent on Wednesday and Thursday respectively, having recovered some of the losses yesterday.

The share price of Crimsonwing plc declined by a marginal €0.001, closing the week at €0.389, having registered a single trade of only 500 shares on Thursday.

RS2 Software plc and Santumas Shareholdings plc were the other equities to close the week unchanged at €0.599 (14,027 shares on six deals) and €3.04 (2,500 shares on a single deal) respectively.

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.