Financial news

The Malta Stock Exchange advanced on good volume yesterday as 76 deals were transacted registering a gain to the index of over 29 points, or 0.84 per cent, to close at 3508.246. The financial sector was the primary contributor of this advance, with Middlesea Insurance plc leading the pack. Middlesea Insurance gained another 4c4 to close at €0.875 registering a 5.29 per cent gain for the day as 56,858 shares were traded.

Bank of Valletta plc advanced 3c2, or 0.82 per cent, to close at €3.93. A total of 28,995 shares were traded over 25 deals.

Similarly HSBC Bank Malta plc also gained, registering a 5c advance, to close up 1.54 per cent to €3.30. Twenty deals were concluded in which 22,129 shares were exchanged.

Island Hotels Group Holdings plc made marginal gains where 500 shares were traded to see the hotelier advance 0c9, or 0.89 per cent, to €1.019.

Other companies which traded throughout the day included non-movers Go plc closing at €2.10 with 9,540 shares traded across nine deals, Plaza Centres plc closing at €1.63 with 10,355 shares trading hands in two deals, and Simonds Farsons Cisk plc with 2620 shares traded in two deals which saw the shares close at €1.70.

The fixed interest market saw many issues traded with €365,775 nominal spread over thirteen corporate bonds and five government stocks. The Bank of Valletta plc 6.15 per cent 2010 bond was the day's biggest gainer closing up 125 basis points, or 1.25 per cent to close at €101.40 while the GAP Developments seven per cent 2011-2013 bond was the biggest loser falling by 2.13 per cent, to close at €92.

Weekly eurozone economic review

The latest economic data emanating from the eurozone did little to change the consensus view that inflation will remain low for the medium term and that the European Central Bank is in no hurry to start raising official interest rates.

The rise in headline Consumer Price Index (CPI) inflation for the month of December, from 0.5 per cent to 0.9 per cent, was in line with the consensus forecast and left the rate at a ten-month high. No breakdown is available yet, but developments in the oil price pointed to a pick-up in annual energy inflation that could have caused the entire 0.4 percentage point rise in the headline rate.

Further evidence of low inflationary pressures in the region came in the form of a fall in the growth rate in M3 money for November. The year-on-year figure fell by 0.2 per cent compared to an increase of 0.3 per cent registered in October and expectations of a slight acceleration to 0.4 per cent year-on-year based on a Bloomberg survey. Elsewhere, German unemployment declined by 3,000 in December. This was another encouraging sign for the consumer sector, particularly when combined with this year's income tax cuts and the recent increase in consumer confidence. Unemployment in the eurozone's biggest economy has now fallen for three consecutive months and survey measures of hiring intentions point to a renewed improvement to come.

Meanwhile, the Manufacturing Purchasing Manager Index (PMI) in the euro area for December was confirmed at 51.6 in the final estimate, up from 51.2 in November. Beyond the confirmation of continuing improvement in the last quarter of 2009, differences across member states continue to be strong. France and Germany continue to lead the pack whereas in the peripheral economies, Spain, Greece and Ireland remain quite firmly in contraction territory.

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.