Financial news

During yesterday’s session on the Malta Stock Exchange the index extended further losses as it dipped by 0.4 per cent to terminate at the 3,428.55 level. The day’s sole gainer was HSBC Bank Malta, as its share price rose by 2c or 2.6 per cent to terminate at €2.84. The bank’s traded volume was relatively low as investors swapped just 1,500 shares across three deals for a market consideration of €4,254.

Meanwhile, Bank of Valletta shares terminated the session in the red, as the equity’s share price dropped by 8c5 or 2.6 per cent to close at €3.20. The bank was nevertheless the day’s most actively traded equity as investors exchanged a total of 11,910 shares over 13 deals for a market value of €38,362.

Lombard Bank Malta ended the session without registering any change in price as the equity managed to move up from its intra-day low of €2.799 and close unaltered at €2.80. Likewise, Malta International Airport, also ended the day unchanged, as it closed at €1.58. Trading activity in the airport operator resulted when two investors exchanged 20,000 shares.

The day’s activity was, however, mainly focused in the fixed interest sector of the market as investors were active in seven corporate bonds and seventeen government stocks.

In the corporate debt market, the highest turnover was recorded in the 8% Bank of Valletta 2010 bond, as investors swapped €154,000 nominal across two deals. The bond registered no change in price and closed at par.

Weekly eurozone economic review

During the second quarter of this year, the British economy grew at an unexpected upwardly revised rate of 1.2 per cent from the 1.1 per cent which was previously reported.

This was the fastest pace for nine years and was mainly driven by an upward revision in the construction sector. In the meantime, in the manufacturing sector, the Purchasing Managers Index (PMI) fell to the lowest level in nine months, to a reading of 54.3 in August from a downwardly revised level of 56.9 the previous month. This was much lower than the reading of 57.0 which was expected and was mainly led by the weakest expansion in new orders for more than a year.

In the construction sector, output increased by 8.5 per cent between April and June, its best rate since 1982. However, according to the forward looking PMI, the pace of growth is likely to slow as this index fell to a reading of 52.1 in August from 54.1 level which was registered during the previous month. Although this reading was the sixth consecutive reading above the 50-level, it was much lower than the 53.2 level which was forecasted by various economists.

Meanwhile, net lending to British households fell to £86 million in July, the lowest level in four months from £518 million in June. This shows that tight credit conditions may hamper future growth. In fact mortgage approvals were little changed, as lenders granted £48,722 loans during July compared with a revised £48,562 in June. However, this was higher than the £46,500 which was expected by economists.

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.