Financial news

The Malta Stock Exchange Index made a marginal gain yesterday, adding just over two points to close at 3,466.382 as 65,605 shares exchanged hands in 29 trades.

Shares in Bank of Valetta plc were the most actively traded in the session, dropping 1c, or 0.3 per cent, in 15 trades for a total of 20,664 shares, to close at €3.620.

The equity to make the day’s biggest move was FIMBank plc, which fell by 1c, or 1.1 per cent, to close at US$0.940 in a single trade of 500 shares.

Also in the banking sector, HSBC Bank Malta plc, bucked the day’s trend and gained 1c7, or 0.6 per cent, to close at €2.890 in ten trades for a total of 10,975 shares.

International Hotel Investments plc and Plaza Centres plc also traded during the session yet closed unchanged at €0.770 and €1.700, respectively.

Volume in both equities was moderate as 23,466 shares were traded in IHI’s stock, while 10,000 shares of Plaza stock exchanged hands in a single trade.

At the end of the trading session, Medserv plc issued its interim Directors’ statement in which the company stated that it had witnessed subdued financial results for the first three quarters of its financial year. This was due to the postponement of offshore work caused by political and economic factors, as well as the Gulf of Mexico incident.

It also indicated that its order book had increased substantially in the last two months of the current year due to several of these postponed projects being expected to resume on 2011.

Weekly UK economic review

In the United Kingdom, according to the National Institute of Economic and Social Research, the economy in the three months through October grew at 0.5 per cent, the slowest pace since the first quarter of this year. According to this report, the performance of the British economy over the past seven months does not suggest a further round of quantitative easing.

Meanwhile, a separate report showed that industrial output grew in line with expectations, at 0.4 per cent during September, the same as an upwardly revised 0.4 per cent which was registered during the previous month. However, the manufacturing component was slightly weaker than forecast as production increased by just 0.1 per cent in September, its weakest pace growth since April, after expanding an upwardly revised 0.4 per cent in the previous month.

On a negative note, the total trade deficit during September continued to deteriorate as the British economy registered a deficit of £4.6 billion, above the upwardly revised deficit of £4.9 billion registered the previous month.

Elsewhere, according to the producer price index (PPI), prices increased by 0.6 per cent, the highest rate in six months during October, compared to a no change during the previous month. In fact, the Bank of England’s latest quarterly inflation report gave a slightly more hawkish assessment of the UK economy.

The bank raised its near-term inflation forecasts and expects inflation to remain above its two per cent target next year but inflation should fall sharply to stand below target in two years.Furthermore, the report showed that the Monetary Policy Committee members were unusually divided on the risks to growth and inflation. This makes it more likely that policy will remain on hold until the economic outlook remains clearer, with chances of a second round of quantitative easing more remote.

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.