Financial news

The Malta Stock Exchange witnessed its second consecutive day of losses as the local banks continued to suffer losses. The Index lost over 34 points, or almost 1.0 per cent, to close at 3527.810 in relatively light volume.

The banking sector continued to be the market laggard as both of the major local retail banks fell on the day. HSBC Bank Malta plc fell 6c4, to drop to the €3.00 level on volume of 25,000 shares spread across 20 trades while Bank of Valletta plc lost 5c in six trades of 5,270 shares to close at €3.40. The outstanding bid and ask for HSBC Bank Malta plc at the end of the session stood at €3.021 for 1,300 shares and €3.06 for 3,000 shares respectively. The bank's shares are at their lowest point since November of 2009.

Lombard Bank Malta plc managed to buck the banking trend and registered gains on the day, closing up 0c5, or 0.2 per cent, and ended at €2.95 in a single trade of 96 shares.

Other shares to trade, yet failed to register a change in their closing price, were Middlesea Insurance plc, which closed at €0.70 in a single trade of 1,472 shares, and Go plc, which closed at €2.12 in four trades of 23,000 shares. Loqus Holdings plc, also closed unchanged at a level of €0.20, in a single trade of 1,000 shares.

The fixed interest market witnessed very light volume yesterday as €182,244 nominal was traded across 29 deals, spread over four corporate bond issues and eight government stocks.

Weekly eurozone economic review

In the Eurozone, the EU approved the activation of a three-year rescue package for Greece, which will total €110 billion. The European Union (EU) will contribute €80 billion while the International Monetary Fund (IMF) will provide the remaining €30 billion. Meanwhile, inflation in the 16 nations using the euro, rose 1.5 per cent in April from a year earlier, after a 1.4 per cent gain in March. This was in line with economists' expectations.

While increasing marginally in Italy, Spain and Belgium, the rate of inflation fell in Germany. The inflation rate remains well below the ECB's target and as such during today's rate setting the ECB is expected to keep rates at one per cent. In the meantime, unemployment held steady at 10 per cent in March, which is the highest since August 1998.

On a positive note, the manufacturing sector output in the eurozone reached its highest level in almost 10 years during April. In fact, the Manufacturing Purchasing Managers Index (PMI) for April was revised upwardly to a reading of 57.6 from the initial estimate of 57.5 last week. Output in Germany expanded at a rate not seen in the survey's 14-year history. The Services PMI was also revised to a reading of 55.6 from an earlier estimate of 55.5.

Meanwhile, retail sales data shows that consumer demand is still weak and growth is export driven. Retail sales in the region using the euro were flat in March. The data fell short of market expectation and was 0.1 per cent lower than in the same period last year. Finally, an economic sentiment indicator as measured by the European Commission (EC) which was collected prior to this week's escalation of Athens' debt woes, rose to a 25-month high of 100.6 points in April from an upwardly revised 97.9 reading during 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.