Stock Exchange: Further declines in the share prices of BOV and HSBC

The Malta Stock Exchange Share Index dropped below the 3,500-point level during this morning’s trading session as the share prices of both Bank of Valletta plc and HSBC Bank Malta plc lost further ground.

Concern among local investors following the recent comments made by the governor of the Central Bank on the possible need for the banks to review their dividend policies led to further selling pressure.

The governor was quoted this week as having said that although local banks are well capitalised and have strong liquidity and solvency ratios, they may need to further increase their capital in view of stricter international regulation currently under discussion and the deterioration of credit quality in their respective loan books.

BOV’s share price shed a further 1.5 per cent lower to close at the €3.25 level on increased volumes of 24,243 shares. BOV ranks as the week’s worst performer with a drop of 3.6 per cent. Meanwhile HSBC edged 0.3 per cent lower today retreating to the €3.03 level representing a weekly decline of 1 per cent.

Negative sentiment surrounding the banking sector spilled over onto Middlesea Insurance plc. This equity shed 2.9 per cent this morning to drop back to the €0.85,5 level.

In contrast to last week’s 17.3 per cent increase, the equity closed this week 2.8 per cent lower.

The subscription period for the bond issues of Eden Finance plc and Simonds Farsons Cisk take place next week.

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