Financial news

Investors took some profits off the table yesterday as the Malta Stock Exchange finished lower, closing down 16 points, or 0.5 per cent, to finish at the 3469.066 level.

HSBC Bank Malta plc shares, which dropped 0.9 per cent on Monday, continued their decline by dropping another 1.7 per cent, or 5c, to end at €2.97 in seven trades for 5,690 shares.

Bank of Valletta plc, whose shares have been performing well of late, finished the day flat after trading most of the session in negative territory. A total of 12,655 shares across 14 deals were traded as the retail bank shares closed at €3.27. Shares in the local airport operator, Malta International Airport plc, lost 1c, or 0.6 per cent, to close at €1.58 in three trades of 2,100 shares. MIA shares have been trading in a relatively tight trading range since March after coming off of recent lows witnessed in October. Middlesea Insurance plc, meanwhile, gained 2c, or 1.7 per cent, in five trades of 4,280 shares, to close at €1.17.

The other stock to trade in the day was Go plc, which closed unchanged at €1.92, in four deals of 3,600 shares.

Trading in the corporate bond market was brisk as €753,200 nominal across 20 trades were dealt in a session where not a single bond finished lower. The best performer on the day was the seven per cent GAP Developments 2011-2013 issue, which gained €2.51, or 2.7 per cent, to close at €97 in heavy volume of 11 trades of €700,000 nominal.

Weekly US economic review

The economic data released last week was very weak overall. Industrial production managed a slight increase in June, expanding for the eleventh time within the last 12 months. However, the 0.1 per cent gain was nothing to write home about. This confirms recent concerns of a slowing momentum in the US industrial sector. Further evidence was provided over the week by the first regional sentiment surveys in the manufacturing industry. In fact, both the Empire State Manufacturing Index and the Philadelphia Fed Index plummeted in July.

Retail sales figures for June also came in below expectations. Following a 1.2 per cent month on month decline in May, they fell by another 0.5 per cent last month. Given the slowdown in the growth of private consumption, it was no surprise that the development of consumer and producer prices in June confirmed the very moderate level of inflation at the moment. Consumer prices declined by 0.1 per cent in June on cheaper fuel prices while excluding food and energy, prices edged up 0.2 per cent, a bit more than expected. Meanwhile, the University of Michigan index of consumer confidence fell to 66.5 in the first half of July from 76.0 in the previous month. This is the weakest reading since August of last year.

The publication of the minutes from the Federal Open Market Committee's last interest-rate meeting brought to light the fact that the Fed is also starting to take a more pessimistic view of the future. It lowered its estimate for real GDP growth in 2010 and raised its unemployment forecasts all the way up until 2012. In contrast, it revised its inflation forecasts downward again.

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.