Financial news

The Malta Stock Exchange Index lost just under 12 points yesterday to close at the 3472.461 level in a quiet session of trading where only four equities managed to see action across 19 deals for a total of 21,644 shares.

Shares in Bank of Valletta plc, after gaining 1c in Monday’s session, lost 2c yesterday to close down 0.6 per cent, at €3.25, in 10,304 shares across 12 trades.

Stock of the other large local retail bank, HSBC Bank Malta plc, also traded lower yesterday, dropping 1c, or 0.3 per cent, to close at €2.90 in low volume of 6,780 shares.

Also in the banking sector, Lombard Bank Malta plc, finished the session unchanged, at €2.80 in two deals for a total of 2,130 shares. After the close of trading, the bank announced its financial results for the six month interim period ended June 30, 2010. Pre-tax profit for the period increased to €6.76 million from €6.44 million for the same period in 2009, representing a 4.9 per cent increase.

The other equity to trade in the session was Go plc, which fell by 2c8, or 1.5 per cent, to end the day at €1.87 in a single trade of 2,430 shares.

Also yesterday, Grand Harbour Marina plc announced that its board of directors are scheduled to meet on this Friday to consider and approve its interim financial results for the six-month period ending June 30, 2010.

Weekly US economic review

In the United States, wholesale prices as measured by the Producer Price Index (PPI) increased for the first time in four months in July. Inflation pressures, as expected, increased by 0.2 per cent in July, after falling by 0.5 per cent the previous month. Wholesale prices excluding the volatile food and energy components increased by 0.3 per cent. This was more than projected and the biggest increase since January. On a year-on-year basis, producer prices increased 4.2 per cent in July, in line with forecasts.

On a positive note, in the manufacturing sector, industrial production increased by one per cent in July, mainly boosted by increases in automotive production. This was twice as forecasted and followed a 0.1 per cent decline the previous month. Meanwhile, capacity utilisation, a measure of how fully firms are employing their resources rose to 74.8, the highest since September 2008. On the contrary, data from the labour market showed that employment prospects continued to deteriorate. The number of people claiming initial jobless claims increased by a further 12,000 to 500,000 in the week which ended August 14, the highest since November.

Furthermore, the Federal Reserve Bank of Philadelphia’s general economic index turned negative in August, which signals contraction. In fact an index measuring business activity dropped to minus 7.7, from July’s 5.1, the lowest since July 2009, as new orders and shipments fell in addition to the deterioration in the labour market. Finally, housing starts increased by 1.7 per cent during July. Although this was below the two per cent forecasted, the reading was much higher than the 8.7 per cent decline registered 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.