Financial news

Yesterday's trading session on the Malta Stock Exchange saw an increase of 2.7 per cent in the index which terminated at the 3,140.4 level sustained by buying activity in the shares of the two largest local banks. In the equity market, activity rose as investors transacted an aggregate of 30 deals in four different listings.

Bank of Valletta shares continued to gain further ground, as the banking equity rose by 15c or 4.7 per cent to terminate at €3.35. Thus during the past two days the price of the Bank's shares increased by a total of 26c. Volume in the financial services company consisted of 25,773 shares spread across 12 deals for a market consideration of €85,054.

Following two consecutive days of unaltered closings, HSBC Bank Malta shares moved out of their stalemate as they registered an increase of 13c or 4.9 per cent to close at €2.80. Bids of 1,000 shares at €2.75 and offers of 3,000 shares at €2.80 were the best unsatisfied deals at the close of the session. Investors swapped an aggregate of 24,400 shares over 13 deals.

Outside of the banking sector, Simonds Farsons Cisk was the session's best performer as the equity rose by 9c9 or 6.2 per cent to end the session at €1.699. Volume was however muted as 840 shares were transacted over a single deal.

Go shares were the only laggard during the session as the equity registered a negligible one-tenth of a cent decline to close at €1.579. Trading activity in the quadruple play communications company resulted when a total of 4,500 shares were exchanged over four deals.

Weekly US economic review

The economic highlights in the US over the past week featured the Federal Reserve's interest rate decision following the Federal Open Markets Committee (FOMC) meeting. The period under review contained other significant indicators both in the labour market and in the housing sector.

The Federal Reserve held interest rates in the 0-0.25 per cent range following the latest FOMC meeting. During the meeting, the Federal Reserve stated that the "economy had picked up following a severe downturn" but the economy is still liable to remain weak.

The Fed confirmed that it will buy the entire amount of agency debt and mortgage backed securities it had originally planned. Meanwhile, in the labour market, initial jobless claims data was slightly better than expected as they declined to 530,000 in the week ending September 19, from a revised figure of 551,000. This was the lowest level that had been registered since July.

Elsewhere, new orders for long-lasting US manufactured goods fell in August, declining by 2.4 per cent, which was the largest percentage decline since January, after rising 4.8 per cent in July.

In the housing market, existing home sales unexpectedly dropped to 2.7 per cent in August, which was the first decline in a period of four months, indicating a less vigorous pace of economic recovery. In fact, economists had anticipated a monthly increase of 2.1 per cent. This has not dampened US consumer confidence, which rose in late September to the highest level since January 2008 as expectations of an economic rebound gathered momentum.

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.