Financial news

Light trading of just 35,057 shares across 23 deals pushed the Malta Stock Exchange Index almost 20 points, or 0.6 per cent higher yesterday. The Index closed at the 3,588.819 level as just three equities were traded.

Bank of Valletta plc added another 7c, or 2.4 per cent on the day, closing at €2.969 in seven trades for a total of 11,307 shares. On Tuesday, BOV’s stock gained 4c9, or 1.7 per cent in heavy volume of 111,404 shares.

HSBC Bank Malta plc, meanwhile, closed unchanged at €2.940 in four trades for a total of 1,250 shares.

Go plc stock put in the equity market’s sole negative performance, shedding a marginal 0c1, or less than 0.1 per cent, to end at €1.749 in twelve deals for a total of 22,500 shares. This is the second successive loss for Go’s shares, which fell 2c, or 1.1 per cent in yesterday’s session.

Trading in the corporate bond market continued to be light, as €111,230 nominal across 18 trades were executed, while the market finished mixed.

Again, it was the bonds that investors deemed most sensitive to the ongoing situation in Libya that dominated the day’s trading volume. Two of the eleven bonds to trade in the session closed higher, while three finished lower. Managing the biggest gain of the session was the 6.25% Tumas Investments plc €2014-2016 bond, which added €0.75, or 0.7 per cent, to end the day at €102.100 in a single deal of €27,100 nominal.

Weekly eurozone economic review

European Central Bank president Jean-Claude Trichet took markets by surprise on Thursday when he hinted that the Central Bank may raise interest rates as early as next month as the ECB becomes increasingly hawkish on inflation and higher oil prices. Economists believe, despite comments by Trichet to the contrary, that a rate increase next month will be the first in a series of rate hikes that will push the Central Bank’s refinancing rate to 1.75 to 2.0 per cent by the end of the year.

Meanwhile, the eurozone’s services economy enjoyed its fastest upturn since August 2007, rising to a level of 56.8 in February from 55.9 the previous month, revised slightly lower from a preliminary reading of 57.2. February’s figure marked the 18th month the services Purchasing Managers’ Index, which measures the activities of companies ranging from banks to hotels, has been above the 50 mark dividing growth from contraction.

Retail sales for the month of January, driven by slightly better weather and a strong performance in Germany, registered a 0.4 per cent increase over December. Year-on-year figures for January were also released, showing a 0.7 per cent gain for the last 12 months over the previous. Economists are hopeful that the positive trend in retail sales can continue and that the latest figures are not just a bounce from December’s figures which were adversely affected by weather conditions.

Separate figures released by Eurostat today confirmed that eurozone Gross Domestic Product rose 0.3 per cent in the fourth quarter of 2010, or 2 per cent year-on-year.

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.