Big banks lift MSE index to 2009 high

The Malta Stock Exchange index last Friday climbed to its highest point this year, surpassing 2009's previous high which had been reached last January. The MSE had a positive week overall, improving 2.3% to reach 3,315.857, a level not surpassed for nearly a year.

In mid-January, the MSE index had reached a peak of 3,249.673. It then nose-dived till the end of March mainly due to heavy falls in the price of the large banking equities. The MSE then started to recover gradually and haphazardly, again mostly due to these same banking stocks' upward trend.

The index's gains over the past two weeks may be attributed almost completely to positive vibes brought about by indications of recovery in the local banking sector following the positive results of Bank of Valletta plc this year.

However, it is worth noting that while the two larger banks are now reporting attractive gains, the vast majority of equities on the local market are still heavily in the red. The divergence between winners and losers on the MSE this year has therefore widened considerably.

Although total value and volume traded in local equities was halved this week, the amounts traded were nevertheless much higher than the norm, with most concentrated in banking equities and Go plc. Twelve equities were traded last week, with nine improving, two remaining unchanged and only one losing value.

Bank of Valletta plc accounted for nearly half the value traded last week. A total of 68,483 BoV shares changed hands in 69 deals, boosting the share price by a further 1.06%. The equity closed at a new yearly high of €3.80, following some slight fluctuations during the week. At one point it traded at €3.825. A large amount of trading took place on Monday continuing the upward move from last week's €3.76.

It is fair to note that such gains occurred notwithstanding the share price being traded ex-div last week. The equity's performance so far this year stands at a whopping 31.4%.

The second-most traded equity last week was, unsurprisingly, HSBC Bank Malta plc, with nearly 30,000 shares exchanged in 24 deals. Contrary to BoV, most of this trading occurred on Friday. The share price jumped up to a new high for the year, closing the week at €2.99, a gain of nearly 5%.

Go plc's share price last week continued to edge slowly upwards, with a slight gain in nearly every trading session on the back of average volume. The price closed at €1.72 on Friday a gain of just over 3.6%.

Go's share price has risen consistently over the past four weeks retracing a sizeable part of the downturn experienced towards the end of the summer. Notwithstanding this improve-ment, this equity is still in negative territory this year, being 1.8% below its level at the end of December 2008.

A total of 33,000 Fimbank plc shares were traded in 10 deals. A small number of these trades on Friday pushed the share price up by $0.005, or 0.44% higher, to $1.145, at which it closed.

Medserv plc climbed 0.05% to reach €4 last week. So far this year this equity has gained a slight 0.08%.

Lombard Bank plc was the third-best performer last week, climbing nearly 3.8% and sustaining the strong upward move following the previous week's gain of 6%. However, trading volume was low and occurred only in the week's first two sessions.

Following these past two weeks, the equity's loss to date loss has been sharply reduced to 8.3%. However, this banking equity is still significantly underperforming compared to the two large banks.

International Hotels Invest-ments plc and Middlesea Insur-ance plc's share prices both remained unchanged following minor sporadic trading during the week.

A single trade in Simonds Farsons Cisk plc on Thursday boosted this equity's price by an encouraging 3.12%, with the price closing at €1.65.

Crimsonwing plc and Malta-post plc shares recovered last week, the former being the best-performing equity of the week with a 6.9% increase, while the latter crept up 0.33%. However, volume was minimal for both equities. Minor trading also occurred in Plaza Centres plc shares, with the share price edging lower to €1.60, a drop of 1.8%. This was the only equity to lose value last week.

Short-term benchmark Ger-man Government Bond (bunds) yields last week edged lower while longer-term bund yields improved. On the local market most government bonds that were traded last week gained value, although the 5.2% MGS 2020 lost just over 1%. Slightly more than €500,000 worth of trading took place.

The value of trading in local corporate bonds totalled €628,000, with prices remaining generally unchanged while trading in the Treasury Bills market amounted to €10.6 million.

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.