Financial news

The Malta Stock Exchange managed marginal gains in yesterday's session despite investors' decision to take some profits in Bank of Valletta plc off the table. The session gained more than five points, or almost 0.2 per cent, to close at the 3562.469 level on moderate volume.

The biggest gainer on the day, helping to push the market higher, was International Hotel Investments plc, which gained 2c, or 2.4 per cent, to close at €0.85 on six trades of 18,781 shares.

Banking had mixed results on the day as Bank of Valletta plc gave back some of the gains it witnessed in recent sessions, closing down 5c, or 1.4 per cent, to close at €3.45 on volume of 9,205 shares across 11 deals. Meanwhile, HSBC Bank of Malta plc shares finished ahead, closing up 0c2, or less than 0.1 per cent, to close at €3.064.

Other shares to finish in positive territory were Go plc, which gained 1c, or 0.5 per cent, to close at €2.12, and Medserv plc, which added 4c, or 0.9 per cent, to its previous closing price, to finish at €4.28. Maltapost plc also made gains on the day, after witnessing a few quiet sessions after a recent run in its share price. The local postal operator's shares were up 0c2, or 0.2 per cent, to close at €0.85.

Shares to see trading in yesterday's session but closed unchanged were Malta International Airport plc, which closed at €3.2 in eight trades of 16,435 shares, and Middlesea Insurance plc, which ended the day at €0.70 in two trades of 9,000 shares. Lombard Bank plc, which also closed unchanged at €2.945, witnessed light volume of 1,425 shares across three deals.

Weekly US economic review

The US economy expanded by 3.2 per cent during the first quarter of 2010. This was in line with estimates and was boosted by consumer spending as this rose at the fastest rate in three years during this period. In effect, consumer spending increased as expected in March for the sixth consecutive month, boosted by spending in autos and durable goods. As a result, consumer expenditure, which normally accounts for over two-thirds of the economic activity in America, increased by 0.6 per cent during the month of March, following an upwardly revised 0.5 per cent increase in February. Business investment in equipment and software increased at 13.4 per cent pace during the quarter.

In the meantime, the manufacturing sector continues to steam ahead, as indicated by the Institute of Supply Management (ISM) factory index which printed its highest reading since June 2004. This Index increased by 0.8, the fastest pace in almost six years, to a reading of 60.4 in April, above expectations. The most important components of the index posted strong increases from their already elevated March levels. Production jumped to 66.9 from 61.1, new orders to 65.7 from 61.5 and employment to 58.5 from 55.1.

Although offering a more upbeat view of the economy and employment prospects last Wednesday, the Federal Reserve held interest rates in the 0-0.25 percent range following the latest Federal Open Market Committee (FOMC) meeting. The Fed also maintained its commitment to keeping interest rates at exceptionally low levels for an extended period. Finally, the growing economy raised hopes of a job recovery; as a result consumers turned more optimistic in April as the Conference Board Confidence Index rose to a reading of 57.9 during this month from a reading of 52.3 registered in March.

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.