MSE index at new yearly low

Following the previous week's moderate downfall, the Malta Stock Exchange index last week resumed its negative momentum, reaching a new low for the current year to end the week at 3,381.738 points. Over the past week, the index lost 0.9%, with the main financial equities hampering the broader market nearly throughout the week. The index is now 2.28% below its January starting point, erasing all gains achieved since the end of November 2009.

Trading volumes fell substantially lower last week, as often happens as the summer months approach. The bulk of trading occurred in the major banking equities, and was spread evenly throughout the week. Ten equities were traded last week, with the prices six ending lower and only two ending the week in positive territory. Two other equities closed the week unchanged.

The volume of trading in HSBC Bank Malta plc equities continues to pick-up week after week, with a total of 64,585 shares changing hands across 52 deals. However, this trading backed a gradual fall of 1.08% in HSBC's share price over the week, from €2.871 to €2.84 by Friday's session.

Initial uncertainty in direction at the start of the week was, however, smoothened out as the share price resumed its fall. Although last week's move was a negative one, it failed to nullify the previous week's 1.81% gain, therefore resulting in an overall positive performance for the past fortnight.

This was not the case for Bank of Valletta plc's share price, which suffered two consecutive weeks of losses with a sizeable 3.38% fall last week alone. Nearly 41,200 shares backed this fall, with the share price ending at last week's low of €3.14 after starting the week at a high of €3.27. Last week's negative performance has led to a further drop in BoV's year-to-date gains which now stand at 1.42%. This nevertheless outshines by far the 12.07% loss in HSBC's share price year-to-date.

Last week a total of 31,000 Maltapost plc shares were traded, yet these were concentrated in just one trading session. Its share price remained static at its year-to-date high of €0.90.

Go plc's share price last week scaled back part of the hefty losses it suffered the previous week, climbing 1.65% by Friday. The share price rose to €1.85 on Monday from the previous week's close of €1.82, and remained unchanged thereafter despite 29,060 shares changing ownership throughout the week. This equity's share price has lost nearly 12% in value since the start of the year and its downward slide has been gathering momemtum, particularly during May.

Nearly the exact opposite is true for Middlesea Insurance plc (MSI) as this equity's share price is rising with increasing speed. Indeed, last week the price of MSI shot up 10.74% from €0.95 to a new yearly high of €1.052 by Friday, with steady volume backing the climb throughout the week. This week's hike has resulted in the year-to-date performance ballooning to 30.85%.

A total of 26,140 Malta International Airport plc shares were traded last week. The equity's price oscillated between €1.61 and €1.65, ending Friday's session at €1.62, a slight fall of 1.22% from the previous week's closing price of €1.64.

On the other hand, the price of Simonds Farsons Cisk plc (SFC) remained unchanged at €1.80 despite 18,000 shares in this stock being traded in the opening and final sessions of the week. At SFC's annual general meeting on Thursday, shareholders approved the accounts for the year ended January 31, as well as the payment of a net dividend of €0.05 per ordinary share.

Minimal trading occurred in International Hotel Investments plc, Lombard Bank plc and Fimbank plc, all three losing between 0.65% and 0.99%.

Last Tuesday, Island Hotels Group Holdings plc's board of directors met and approved the group's financial statements for the six-month period ending April 30, which reported a €2.085 million net loss for the period. This loss was attributed to the lingering effects of the international economic downturn, price sensitivity, shorter lead times and exchange rate volatility, compounded by the effect of the volcanic ash cloud crises, which negatively affected tourism and the group's performance.

However, in its outline statement the board commented that "based on the generally positive outlook for the tourism industry, as well as the increase in seat capacity, management retain their optimism for the second half of the year which, in any event, contributes a more than proportionate part of the group's annual performance because of the seasonal nature of the business".

Trading in local corporate bonds last week surpassed €530,000 in value, a large part of which occurred in two Bank of Valletta plc bonds. Most bond prices remained fairly unchanged, yet both the 5.35% BoV 2019 bond and the 6% SFC 2017-2020 bond gained just over 1% last week. On the other hand the 6.25% IHI 2017-2019 bond shed 1.86% to fall back to €100.

Last week, Mariner Finance plc announced that its 5.75% 2008-2010 bonds will be redeemed upon maturity on July 15, and therefore trading in these bonds ceased last Thursday.

Price movements in local government stocks last week were mixed, mirroring uncertainty in foreign benchmark yields, most of which edged lower throughout the week. Indeed, traded prices of some longer-term stocks actually improved last week while the shorter-term stocks fell slightly. Value traded amounted to over €3.7m.

Almost €2.8m worth of Treasury bills was traded last week.

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.