Financial news

The Malta Stock Exchange Index gained over 11 points yesterday, to close at the 3,476.994 level, as retail banking stocks closed higher in continuing low levels of trading.

The largest move in the day was made by the shares of local retail bank, HSBC Bank Malta plc, which gained 1c9, or 0.7 per cent, to close at €2.899 in light volume of two deals for a total of 700 shares.

HSBC’s main competitor in the banking sector, Bank of Valletta plc, reversed losses it witnessed in Wednesday’s session and gained 2c, or 0.6 per cent yesterday, to close at €3.26 in eight trades of 6,074 shares.

The other issue to trade in the day yet failed to register a change in its closing price was the local airport operator, Malta International Airport plc, which closed at €1.55 in nine trades for a total 25,800 shares.

After the close of trading yesterday, the IT services company, 6pm Holdings plc, announced its financial results for the six month period ended June 30, 2010.

The group suffered a pre-tax loss of GBP209,729 versus a loss of GBP27,373 for the same period in 2009. The loss came on the heels of a significant drop in revenue for the period as sales came in at GBP1.8 million versus €2.9 million for the same six month period in 2009. The company attributed its deteriorating performance to a loss in confidence across all sections of the UK market due to the recent elections there, as well as to the poor trading conditions resulting from the European sovereign debt crisis during the period.

Weeky eurozone economic review

In the euro-area, the flash estimates of the Purchasing Managers’ Indices (PMI) for the main sectors of the economy indicated that the economic recovery is moderating. In fact, the PMI for the services sector slipped to a reading of 55.6 in August from the level of 55.8 the previous month. The 16-nation common currency area manufacturing sector, which drove most of the growth in the third quarter of last year, also saw the pace of growth slow as the index fell to a reading of 55.0 from 56.7 in July. These readings were both below analysts’ forecasts. In fact, industrial order data for the month of June showed that growth slowed to 2.5 per cent, from an increase of 4.1 per cent which was registered in May. However, this was higher than the 1.5 per cent increase which was expected. On an annual basis, industrial orders increased by 22.6 per cent in June.

Meanwhile, consumer confidence, unexpectedly improved in August as economic growth increased by the fastest pace in four years during the second quarter of this year. In fact, a measure of consumer confidence in the euro-area improved to a -12 from -14 in July. Economists were expected that this index will remain unchanged this month.

Finally, on a positive note, European construction output increased by 2.7 per cent in June, after contracting by 0.7 per cent the previous month. This was the highest rate in three months and was mainly led by a rebound in Spain’s construction sector. From a year earlier, output increased by 3.1 per cent after falling 6.2 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.