Volatility on MSE reflects jittery global markets

In line with global markets the past week failed to carry over the positive momentum experienced in most local equities over the previous two weeks. In a week dominated by the eurozone, sovereign debt worries and the possible conflict in the Korean peninsula, instability prevailed in the global markets.

The Malta Stock Exchange Index in fact somewhat withdrew last week, closing Friday’s session at 3,489.745 or nearly 1% lower from the previous week’s closing value. Primarily, financial equities were unable to fight off sellers, or possibly profit-takers, following hefty gains achieved.

Volume of shares traded was somewhat subdued especially when forgoing trading in FIMBank plc shares which made up nearly a third of total shares transacted. Shares exchanged totalled slightly more than 315,000 spread over 136 deals. Twelve local companies saw their shares being transacted, yet only one managed to close in positive territory. Four shares kept their prices intact, while the remaining seven drifted lower.

As already hinted, the bulk of last week’s trading occurred in FIMBank plc shares with slightly over 108,000 shares exchanging ownership mostly during the initial days of the week. Initially this larger volume led to a 1% fall as the price was lowered from $0.94 to $0.93. Thereafter, the share price fluctuated minimally on minimal volume, nevertheless ending the week back at $0.93.

Trading in Bank of Valletta plc (BOV) equities was fairly consistent throughout the week, reaching a total volume slightly shy of 59,000 shares. Although initially the share price remained intact at €3.70, ultimately sellers took control with the share price drifting slightly by €0.02, closing at €3.68.

Investors therefore decided to take some profits given the sharp rise of slightly more than 14% over the past few weeks. In a company announcement issued last week BOV highlighted the ordinary and extraordinary resolutions to be voted upon by shareholders in the annual general meeting to be held on December 16. Among these resolutions for consideration by shareholders is the approval of the gross final divided of €0.16 per share.

International Hotel Investments plc saw above average trading as 53,300 shares exchanged ownership mostly during Monday’s session. The share price however remained unchanged at €0.77. This equity has failed to be influenced by the overall positive vibe on the local market and has maintained its negative bias ignited since last August. The equity ended the week close to its yearly lows.

Trading in HSBC Bank Malta plc (HSBC) moderated following a slightly more than 7% improvement over the past few weeks. This equity’s gradual advancement was halted last week, with the share price going through a minor correction. The share price was then gradually reduced from €2.98 to €2.94, shedding 1.34% by Friday. Notwithstanding the positive spill-over effect since the announcement of BOV results, HSBC share price is still almost 9% in negative territory year-to-date. This performance is a sharp contrast to BOV’s 19% gain since the start of the year.

The upward share price movement of Go plc has slowed to a halt, with the price failing to surpass a possible psychological resistance level of €1.90. Volume traded in this stock was generally on the low side as only 24,116 shares exchanged hands.

Volatility in Lombard Bank plc remains on the high side as this equity dropped sharply by 3%, closing the week at €2.57, following a previous bounce from €2.50 to €2.77 earlier this month. Volume was on the low side as slightly more than 13,330 shares were traded.

Global Capital plc was the worst performer, as its share price plunging by 22.11% to reach a new low for the year of €0.997 with accumulative losses surpassing 26% since the start of the year, resulting in Global Capital plc being the worst performing equity.

Minor trading volumes kept the prices of both Middlesea Insurance plc and Grand Harbour Marina plc intact at €1.05 and €1.98 respectively. On the other hand, Malta International Airport plc share price saw a 1.4 per cent fall also on light volumes. Maltapost plc was the only gainer for the week, climbing just shy of 2.5% yet volume was negligible only just surpassing 3,000 shares.

RS2 Software plc shares stumbled 10.7% lower, yet only 2,000 shares changed hands in onesingle deal at €0.50.

Simonds Farsons Cisk plc and Plaza Centres plc issued their interim directors’ statement, both being upbeat about their results and expectations. Both companies report increases in turnover, furthermore highlighting the progression of their respective extensions or new projects.

A total market value of €1.36 million was traded in local corporate bonds, the bulk of which, however, occurring in the 6.25% Mediterranean Bank euro bond maturing in 2015. Most of the bonds traded kept their prices intact, yet the 6.5% Island Hotels Group Holdings plc bond maturing between 2017 and 2019 managed to climb to €103.50 from last week’s €102.

Last Wednesday the directors of Baystreet Finance plc stated that the company had repurchased €3.67m from bondholders representing 63.4% of the original issue amount. Trading in Baystreet Bonds on the secondary market will resume from Tuesday.

Trading in Malta Government Stocks was also subdued as market value traded failed to surpass the €1million mark. Following a generally mixed week in international markets, most European benchmark yields were flat to positive, resulting in negative price movements.

Similarly, most local Malta Government stocks shed some value with trading mostly concentrated in shorter duration stocks.

Trading in Treasury bills amounted to nearly €600,000 in value.

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 tohave an interest in securities mentioned in this article. For more information, contact Atlas JMFSat 67/3, South Street, Valletta, or on tel: 2122 4410 or e-mail jesmond.mizzi@atlasjmfs.com.