Financial news

The Malta Stock Exchange was down marginally yesterday, dropping just over two points, or less than 0.1 per cent, to close at the 3406.916 level as banking stocks continued to remain under pressure.

Middlesea Insurance plc posted another yearly high yesterday, gaining three cents, or three per cent, to close at €1.03 in a single trade of 700 shares.

In the banking sector, banking shares had another less-than-stellar performance, finishing mixed. FIMBank plc shares, the day's biggest loser, lost one cent, or one per cent, to close at US$1.00 in light volume of 5,184 shares across two deals. HSBC Bank Malta plc was also down, shedding 1c5, or 0.5 per cent, to close at €2.845.

Bank of Valletta plc, meanwhile, finished unchanged at €3.23, in three trades of 3,565 shares. In the tourism industry, Malta International Airport plc, lost 1c, or 0.6 per cent, to close at €1.62 in a single trade of 2,400 shares.

Early in the day, Island Hotels Group Holdings plc announced its half yearly financial results for the period ending April 3. During the six-month period the company posted a pre-tax loss of €2.5 million on turnover of €10.5 million. The company indicated that its operations continued to be challenged by the lingering effects of the international economic slowdown. Price sensitivity, shorter lead times and exchange rate volatility, as well as the effects of the volcanic ash cloud early this year, contributed to the company's negative results. The shares failed to trade on the news.

Weekly eurozone economic review

In the euro-zone, the slight dip in the Purchasing Managers' Index (PMI) flash estimates in June shows that sentiment in the 16-member economy has weakened. The PMI for the manufacturing sector fell in June by 0.2 points to a reading of 55.6 from 55.8 level which was registered in the previous month. In the services sector, the index even dropped by 0.8 points to 55.4 from 56.2 in May. This was the first decline since February and below market forecasts. The composite index fell to a reading of 56.0 in June from a reading of 56.4 the previous month. These indicators show that the European recovery is cooling and rising unemployment is holding consumers back from spending.

In the construction sector, output decreased by 0.3 per cent in April on the previous month when it increased by 6.5 per cent. This fall was led by declines in Spain and Portugal where output declined by 4.9 per cent and 3.7 per cent respectively. On a year earlier, output registered a fall of 6.1 per cent in April after declining by six per cent in March. This shows that the collapse in the property market has hit builders across Europe.

In the meantime, the current account deficit in the euro-area on a seasonally adjusted basis registered a deficit of €5.1 billion in April after a €1.7 billion surplus registered the previous month. Finally, a flash estimate of consumer confidence indicator in the 16-country currency area rose to a reading of -17.3 from May's downwardly revised -17.8 reading.

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.