Rizzo Farrugia and Co (Stockbrokers) Limited of Sliema has launched ‘The Rizzo Farrugia Malta Government Stock Index’ on its portal to exclusively track the trend in MGS.

The index is not impacted by any changes in price movements in corporate bonds.

As not all government stocks trade daily, the Rizzo Farrugia MGS Index is based on the bid prices quoted by the Central Bank to provide a more meaningful trend.

All Malta Government Stocks listed on the Stock Exchange are included in the index and these are weighted by the size of the stock. By way of example, any change in the indicative bid price of the €458.8 million five per cent MGS 2021 has a larger impact on the MGS Index than a change in the price of the smaller issue of €52.4 million 5.2 per cent MGS 2020.

The index is backdated to December 31, 2008, to measure the performance of Malta Government Stocks over the past two years. From a starting level of 1,000 points on December 31, 2008, the MGS Index read 985.33 points a year later implying that the overall direction of MGS’s showed a loss of 1.5 per cent in 2009. On the other hand, during 2010, the MGS Index has so far edged 0.6 per cent higher to 991.64 points, but still below the level two years ago.

“The launch of this index coincides with the strong demand evident for Malta Government Stocks over the past few months by retail investors and the need for market practitioners and investors to gauge the overall trend in MGS prices,” Rizzo, Farrugia and Co director Edward Rizzo said.

The Rizzo Farrugia MGS Index is tracking movements in the bid prices quoted by the Central Bank and due to the inverse relationship between bond prices and yields, an increase in the index shows a decline in yields and vice versa.

The MGS Index will be available on the company’s portal www.rizzofarrugia.com.