As expected, the past week was extremely light in terms of volume of shares traded on the local stock exchange. No trading took place on Wednesday and Good Friday while the remaining sessions saw trading concentrated mostly in the two major banks, which recorded opposing performances but with minimal price volatility. Last week also marked the end of the first quarter of the current year, often being the quarter in which traded volume is at its highest.
The past quarter saw a slew of market-sensitive data released, particularly from local and worldwide corporations announcing their annual results for 2009. The markets were subsequently shaped depending on whether these results met, exceeded, or disappointed investors' expectations.
Guidance for the rest of the year, though limited, also influenced market directions. It is interesting to note the local equity market reacted in a diametrically opposed manner to most equity indices in major economies. During the past three months, most indices abroad saw shares initially lose value, only to bounce back in a determined manner in March with gains ranging between three and six per cent.
In contrast, the local equity market initially continued the rally started in October and November 2009, with the MSE index soaring from 3,460.553 as at end of 2009 to reach 3,956.286 by early January. Subsequently, the index retreated sharply, dropping to 3,549.241 by the end of March. The local index therefore slightly underperformed most foreign equity markets, having gained 2.56% since end of December 2009.
Share price movements on the local exchange saw very wide swings through this first quarter, with some low capitalised equities seeing double digit gains. On the other hand, HSBC Bank Malta plc and Middlesea Insurance plc dragged the overall market lower given their negative performance and higher market-weighting.
The best-performing equity for the quarter was Loqus Holdings plc, with an impressive performance of 344% on a low volume of 4,325 shares, followed by Malta International Airport plc, Global Capital plc and Crimsonwing plc. 6PM plc was the worst performer, having lost just over 25% of its value since January.
During the past week, five equities were traded, with one ending higher, two closing lower and two remaining unchanged. Bank of Valletta plc was the sole gainer, posting a gain of 1.52% last week as circa 29,000 shares were traded in 29 deals. BoV's share price changed little initially, but spiked on Thursday to end the week at €3.33.
Notwithstanding a dip in February this equity managed to end the first quarter in positive territory having gained 6.27%.
HSBC Bank Malta plc was the most traded equity last week, with 34,299 shares changing hands in 16 deals. The equity had a bad start to the week with significant losses. However, it reversed some of these losses in Thursday's session, ending the week at €3.248, which meant a fall of nearly 1%.
Over the past quarter the equity's share price has experienced wide swings, having risen 24% from €3.23 to €4, only to retreat sharply by February to end the quarter with a 1% loss.
Malta International Airport plc shed a further 1% last week, closing at €3.12. However, traded volume was very low. The equity was the second-best performer of the first quarter of the year, having gained 30% in a relatively steady manner since January.
The other two equities traded on the exchange last week, namely Maltapost plc, and Middlesea Insurance plc (MSI), saw no change to their previous week's closing price, with volume traded also very low. Last week, MSI announced the Italian insurance regulators ISVAP had placed Progress Assicurazioni SpA in compulsory administrative liquidation. In spite of a severe lowering of MSI's share price in 2009, the first quarter saw minimal price movements and a contained share price reduction of 'only' 6.7%.
Simonds Farsons Cisk plc announced that the board of directors will be meeting on 14 April to consider and approve the company's financial results for the year ended January 31, and to consider the declaration of a final dividend.
Last week, Go plc announced that Forgendo Ltd has acquired a further 4.3 million shares in Forthnet SA's issued share capital. Forgendo's shareholding in Forthnet now stands at 39.8787%.
Go plc's share price movements were much more limited during the past quarter, with an initial climb being slightly erased, resulting in an overall gain of nearly 4%.
Over the past week, nearly €1.9 million worth of government bonds and just over €0.3m worth of corporate local bonds were traded. Trades in the Treasury Bill market amounted to over €1.7m.
Worth noting is the sharp upswing in most government stock prices during the first quarter of the year. Short-term yields fell to nearly all-time low rates as debt-related problems mushroomed in the euro area.
Political and economical complications, particularly in Greece, Portugal and Spain, led to a sharp fall in yields with a correspondent upward bounce in most government stock prices, including local MGSs. A slight correction occurred only during the past week following co-ordination of help towards debt-ridden EU member states.
A happy Easter to all.
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 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, on Tel. 2122 4410 or e-mail jmizzi@jmfs.net.