Financial news

Trading activity for yesterday’s session on the Malta Stock Exchange extended the losses registered during Monday’s session as the Index dropped by a further one per cent to close at 3131.3 points.

The session’s worst performer was Go, as the equity shed 7c7, which equates to a decline of 4.9 per cent of it’s share price to close at €1.50. Volume consisted of 10,281 shares swapped across seven deals.

In the banking sector, HSBC Bank Malta was for the second consecutive day the session’s laggard as the equity dropped by a further 5c or 1.8 per cent to close at the level of €2.70. The bank had the highest number of deals as investors swapped 30,775 shares over 13 deals.

Bank of Valletta also ended in the red as its share price was knocked down by 2c or 0.6 per cent to terminate at €3.33. Trading activity in the financial services company was unusually muted as 750 shares were transacted over a single deal.

FIMBank was for the second consecutive day the only non-mover as the equity closed unchanged at $1.20. The trade finance specialist was nevertheless trading at an intra-day low of $1.19 when further deals pushed the price back to its current position. Activity was spread over 8,152 shares across five deals.

A single deal for 973 shares sufficed to position RS2 Software as the only gainer during the session, as its share price rose by 2c1 or 3.5 per cent to terminate at €0.62.

Weekly US economic review

In the US, the week’s highlight was the payroll report, where the job loss number came in higher than expected, with cyclical sectors such as manufacturing and construction continuing to lose jobs.

Conditions in the US labour market continue to weaken, as there was a further increase in the unemployment rate to 9.8 per cent in September from 9.7 per cent in August. The non-farm payrolls were however much worse than anticipated as the total payroll employment declined by 263,000 in September when economists were expecting a drop of 175,000. Moreover, it was the first time in three months that the pace of job cuts increased rather than reduced, suggesting stabilisation in the labour markets is still some way off. Even participation in the labour market dropped a very significant 0.3 per cent to 65.2 per cent indicating that the economy has very little capacity in creating new jobs. Meanwhile, there was more good news from the housing market, with home prices increasing 1.2 per cent for a third consecutive month in July, which was the biggest gain since October 2005. The Institute of Supply Management non-manufacturing index also expanded during September as it rose to a reading of 50.9 from its prior 48.4.

US consumer spending rose at its fastest rate in nearly eight years in August, rising by 1.3 per cent after a 0.3 per cent rise during the previous month. Spending was up for a fourth straight month and bet expectations for a 1.1 per cent increase. On a negative note, new orders received by US factories posted their first drop in five months in August, dropping by 0.8 per cent after rising 1.4 per cent in July.

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.