Financial news

The Malta Stock Exchange index closed slightly lower at the end of trading yesterday, dropping six points, or 0.2 per cent, to finish at the 3515.478 level. Volume remained light as 56,170 shares exchanged hands across 25 deals in five stocks.

Banking stocks finished mixed on the day as Bank of Valletta plc edged higher again yesterday to close at €3.269, up 0c4, or 0.1 per cent, in 14 trades of 27,170 shares. On Tuesday, BOV shares rose 4c on moderately light volume. HSBC Bank Malta plc, meanwhile, closed down 1c8, or 0.6 per cent, to close at €2.962 in light trading of 6,700 shares in six deals.

Shares in the Floriana-based insurance company, Middlesea Insurance plc, dropped slightly, losing 0c9, or 0.8 per cent, to end the day at €1.14. In the tourism sector, International Hotel Investments plc (IHI) shares finished unchanged at €0.89 in two trades of 20,000 shares. Trading in IHI shares has been heavy of late, as the stock gained over 11 per cent in the last four trading sessions.

Maltapost plc was the other stock to trade in the day. Shares in the local postal operator closed unchanged, at €0.90, in light volume of 1,000 shares across two trades.

At the end of trading, Plaza Centres plc released their interim financial results for the six-month period ending June 30, 2010. Revenue for the period increased by 2.3 per cent, to €1 million, while profit before tax remained flat at €0.7 million.

Weekly eurozone economic review

In the eurozone, economic activity remains upbeat as the purchasing managers’ indices (PMI) surprised on the upside. Rather than posting a slight dip as expected, both the manufacturing and services indices came in higher. The PMI for the industry rose to 56.5 from 55.6 and its service sector counterpart climbed to 56.0 from 55.5. But, in both cases this increase is exclusively attributable to a marked improvement in Germany where the industry PMI, surged to 61.2, nearly compensating for the decline of the two previous months, which the service sector PMI reached 57.3, its highest level in nearly three years. These numbers highlight once more the differences in economic activity within the eurozone. While in Germany, especially the industry, is recovering very quickly from the plunge in activity, the upward movement is rather sluggish in several other countries.

Meanwhile, industrial new orders in the eurozone rose in May at their fastest annual rate in 10 years which was led by capital goods such as machinery. New orders increased by 3.8 per cent month-on-month and 22.7 per cent year-on-year. This was better than analysts’ forecasts and points to an economic recovery in spite of the area’s debt problems. An index measuring consumer confidence in the 16-nation common currency area increased to a reading of -14.1 in July from -17.3 the previous month. This was better than expected and shows that the region’s sovereign-debt crisis is easing.

This positive data shows that Europe’s recovery may be stronger than many economists expected and is boosting demand for credit. In fact, loans to households and companies in Europe grew at the fastest pace in 20 months in June. Loans to the private sector increased by 0.3 per cent from a year earlier after growing 0.2 per cent in May.

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.