MSE index turns positive

The Malta Stock Exchange index last week climbed 3.80% to close at 3,242.532 points, a level not reached since January, and is now registering an improvement of just over 1% so far this year.

Bank of Valletta plc's encouraging results were the main catalyst for the sharp increase, with the index soaring in the week's first two sessions. Trading was characterised by high volume and extreme volatility. A hefty 315 deals were executed for a total of nearly €1 million, with most shares shedding some of their large gains in the latter part of the week.

Twelve equities were negotiated during the week, with seven closing in positive territory, four losing ground and one remaining unchanged. The larger capitalised listed companies were among the week's gainers, hence positively influencing the overall index.

As expected, the spotlight last week shone on BoV. A total of 107,490 shares changed hands in 131 deals, boosting the share price by 9.02% to close at €3.76. The bank's shares traded with a low of €3.605 and a high of €3.95. The equity has now risen just over 30% this year, outperforming all other equities, most of which have fallen in value.

The next best performer so far this year is HSBC Bank Malta plc clearly enjoyed a spillover effect from its main competitor, with a heavy volume of 104,582 shares exchanged in 80 deals. The share price initially soared from €2.749 to €2.95 but ended the week €0.10 lower at €2.85, a rise of 3.67% on the week, and 5.56% year-to-date. Notwithstanding this increase, the HSBC share price is still lower than its yearly high of €2.98 that it had reached towards the end of July.

Lombard Bank plc was also positively influenced by the overall market sentiment, with 19,776 shares traded in 15 transactions helping the price to climb 6% to close at €2.65. Notwithstanding this increase, the equity's share price is still nearly 12% lower than at the start of the year.

Fimbank plc on the other hand, was immune to the upbeat mood, ending the week unchanged following 12 deals of 64,901 shares. The price remained put at $1.14, close to its lowest level this year.

As is often the case, heavy trading in the larger capitalised equities led to higher-than-normal trading in Go plc shares. Given the market's euphoria the equity was also among the week's gainers with Go shares rising 1.84% from €1.63 to €1.66, thereby sustaining the slow but sure upward trend that began at the beginning of October. A total of 33,850 shares changed hands in 20 deals.

Malta International Airport plc shares are proving to be the most volatile shares on the MSE, maintaining a zigzag pattern since March. In contrast with the previous weeks' sudden falls, MIA's share price last week jumped up nearly €0.10 to close at €2.20, a 4.7%. rise. This move occurred on Monday sustained by decent volume and was followed-up by trading throughout the week.

International Hotels Investment plc's share price increased suddenly by 3.66% to €0.85 after a fair amount of shares were traded on Friday. The equity has lost just over 5% over the course of the year.

In the same sector, Island Hotels Group plc rose by €0.01, or 1%, on a single deal of a mere 500 shares, to close the week at €1.01.

The equities that lost value this week were Middlesea Insurance plc (MSI), Crimsonwing plc, Maltapost plc and Medserv plc. However, the volume of trading in most of these stocks was very light and therefore difficult to interpret. Crimsonwing lost a hefty 26% and MSI shed nearly 22%. The company's downward spiral has intensified over the past weeks. Since January, MSI's share price has plummeted nearly 51% to reach €1.25, its lowest level this year.

In fact, last week MSI announced it will hold an extraordinary general meeting to propose several legal changes to the group's capital structure in view of an unprecedented strain the group is experiencing on its capital resources due to its Italian subsidiary.

As equities abroad gradually improved over the past week, so did benchmark government yields, particularly the longer-term yields. These yields are often a reflection of investors' medium- to long-term economic expectations. Higher yields indicate that they expect higher interest rates in the medium- to long-term, possibly due to inflation brought about by improved economic conditions worldwide.

However, such increases in yield signify falls in government stock prices, as was the case locally last week. A significant number of stocks traded last week lost value, with the longer-term stocks losing the most.

Just over €6 million worth of Malta Government Stocks were traded during the week, mostly concentrated in the 5% MGS 2021 issue, which experienced the largest decline, a fall of 0.677%.

This article, which was compiled by Jesmond Mizzi, managing director of Jesmond Mizzi Financial Services Ltd (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.