Financial news

Trading volumes remained thin on the Malta Stock Exchange yesterday as the activity on the equity was limited to five companies.

The Malta Stock Exchange Index closed barely in positive territory helped by gains in Bank of Valletta which managed to recover all the previous day’s loss. The index terminated the session at 3,474.072 points, practically unchanged since the start of the year.

Sentiment in the banking sector was rather mixed as the two major banks moved in opposite direct-ion while Lombard Bank shares ended unchanged. Bank of Valletta shares advanced by 3c or almost one per cent to regain the €3.25 level. Meanwhile, shares in HSBC Bank Malta fell a further 2c or 0.7 per cent to €2.90 on slightly higher volume of 12,933 shares, spread over 15 deals. Elsewhere, a single trade in Lombard Bank shares left the equity unchanged at €2.80.

Also in the financial sector, trading in Middlesea Insurance failed to register any price movement as the equity ended the session at €1.03. Trading activity was limited to five trades for an aggregate 15,000 shares.

The only other equity to trade during the session was International Hotel Investments which moved marginally higher by 0.1 per cent. The equity ended the day at €0.90 on two deals for an aggregate 22,565 shares.

Separately, Medserv announced before the session that its board of directors is scheduled to meet on August 30 to consider and, if thought fit, approve the interim financial statements of the company for the financial period ended June 30.

Weekly UK economic review

In the United Kingdom, the inflation rate slowed in July as expected, however it stood above the two per cent target rate. Price pressures as measured by the Consumer Price Index (CPI) fell by 0.2 per cent in July, after increasing by just 0.1 per cent the previous month. On an annual basis, inflation eased to 3.1 per cent in July, slightly below the 3.2 per cent rate which was registered the previous month. As a result, Bank of England Governor Mervyn King is expected to write his third letter this year explaining the reasons for the high inflation rate.

In the meantime, on a positive note, retail sales volumes increased three times as fast as economists had forecasted. Sales excluding automotive fuel increased by 0.9 per cent in July, much higher than the 0.2 per cent expected, but was lower than the 1.1 per cent increase registered the previous month.

On a yearly basis, sales increased by 2.4 per cent increase in July, higher than the 1.8 per cent increase expected.

Also on a positive note, the public sector net borrowing in July was £3.2 billion. This was lower than the £4.8 billion forecast and the £13.9 billion registered in June. While public borrowing was lower than a year ago, the figures still revealed the challenging task that the government faces to reduce its 2009/2010’s record budget deficit. Finally, a measure of house prices in August showed a decline of 1.7 per cent, faster than the decline of 0.6 per cent in the previous month.

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.