MSE index down 2% in September

Compared to most indices abroad, the Malta Stock Exchange’s performance over the past month has disappointed, to say the least. In fact, the persistent uncertainty on the local market has kept the largest equities trading sideways for most of September.

The local index maintained the negative momentum brought forward from August, falling 2.09% lower compared to the level reached on the last day of trading in August. The local market moved very much in an opposite direction to equity indices worldwide, most of which actually had one of the best Septembers for several years. Most indices abroad shot up between six to eight per cent in value over the past month.

The MSE index ended last week in positive territory, improving by half a percentage point after the usual intra-week volatility. Trading volumes also increased, with nearly 250,000 shares of 13 listed companies traded. Overall, last week was generally positive with six equities gaining in value, only three losing value while the remaining four equities traded unchanged.

Fimbank plc shares were the most heavily traded last week with just over 79,000 shares changing hands. Although the equity was only active in a single trading session the price rose from $0.92 to $0.99, at which price it ended the week. The share value was thus upped by 2.06% on the week, nearly cancelling all losses suffered last month. The share price is just 0.50% lower than at the end of August.

There was also hefty trading in Malta International Airport plc as almost 37,000 shares changed ownership during the week. However, the share price continued to fall even lower, shedding 1.38% on the week and 3.85% over the past month.

Nevertheless, this negative performance has to be viewed in a wider context as the equity is one of the best performers on a year-to-date basis. In other words, one could easily interpret last month’s slide as merely profit-taking.

Maltapost plc was the second best performer during September, ending the month 7.8% Most of this gain was achieved last week when the price shot up 5.9%.

However, during the past months, this equity’s share price has moved mostly sideways and reaches very strong resistance at €0.90, a level it has attempted yet failed to breach continuously since May. Trading volume in this stock picked up last week with 31,104 shares exchanged in eight transactions.

Local investors seem to have shunned the two major banks last week – a trend prevalent for most of September. Both Bank of Valletta plc and HSBC Bank Malta plc’s share prices mainly traded sideways throughout the month with anaemic volumes. Most local investors opted to sit on the sidelines as conflicting news and investment sentiment seem to balance out buyers’ and sellers’ efforts.

Generally speaking, the prices of financial sector equities abroad were boosted in the first weeks of September following renewed confidence and the positive effect brought about by new banking rules. However, this optimism failed to cross over to our shores, with BoV and HSBC both turning in dismal weekly and mon­thly performances. The banks lost just over 1% over the past four weeks, albeit on lighter than usual traded volumes.

International Hotel Investments plc had a somewhat volatile month with a positive ending. Last week’s 2.4% gain helped moderate the month-on-month losses, which, however, still ate into IHI’s market value by 3.4%.

On the other hand, Go plc drifted lower last week, worsening its monthly losses to 2.14%. However, only a little more than 10,000 shares were traded.

Although Go’s decline was somewhat limited last month, its losses have been piling up month after month, resulting in this equity being among the worst performers year-to-date.

Notwithstanding Middlesea Insu­­­rance plc’s share price ending last week unchanged, the equity suffered big falls during September, wiping out 11.4% of previous gains. So far this year MSI is still in positive territory, yet overall, the share price remains very jittery, with volatility on the high side. Trading volume has also been very sporadic throughout the month.

Minimal volume traded last week resulted in Lombard Bank plc and Medserv plc remaining unchanged, Island Hotels Group Holdings plc losing 1.01%, and Plaza Centres plc and Loqus Holdings plc gaining 2.12% and 60% respectively. Loqus Holdings’ share price remains highly volatile, yet its volume of trading has been insignificant.

The value of trading in the corporate bond market last week totalled nearly €700,000, resulting in overall mixed prices.

Fimbank plc last week announced that an application has been made with the Listing Authority for an issue of an aggregate amount of €25 million 4.25% 2013 bonds, subject to an over-allotment option of a further €10m in either or each of the euro or US dollar denomination respectively.

As has been the case for most of the past month, investors’ focus last week was mainly concentrated on local Malta Government Stocks, which have gone through a pretty volatile month overall.

Most MGSs improved in value at the beginning of the week only to shed some of the gains towards the latter part of the week. In contrast with the local equity market, the local government stock market is very much in tune with its benchmarks.

Most government stock markets abroad acted contrary to movements in equity markets, therefore generally losing steam after reaching all-time highs at the end of August. Renewed risk-taking and a boost in equity markets translated into a dumping of government bonds and a shift towards equities. Local government stocks were similarly jittery during the month, falling from the highs reached four weeks ago.

Last week a total of €1.05m was traded in Treasury Bills.

This article, which was compiled by Jesmond Mizzi, joint managing director of Atlas JMFS Investment Services Ltd, does not intend to give investment advice and the contents therein should not be construed as such. Atlas JMFS is licensed to conduct investment services by the MFSA and is a member firm of the Malta Stock Exchange. The directors or related parties, including the company, and their clients are likely to have an interest in securities mentioned in this article. For further information contact Atlas JMFS at 67/3, South Street, Valletta, or on Tel: 2122 4410 or e-mail jesmond.mizzi@atlasjmfs.com.