Global anxiety fuels drop in local market

The Malta Stock Exchange index last week resumed its downward trend, influenced by sharp falls in international equity markets caused by Japan’s severe problems and North Africa’s ongoing political instability.

Various companies’ end-of-year results added to price volatility, with the MSE index closing the week 2.19% down at 3,495.175.

The index to start the week with losses, which ballooned on Wednesday and moderated later in the week with a slight turnaround on Friday.

A severe fall in a very large capitalised company had the largest impact on the index was, with only two out of the eight equities traded last week ending in positive territory.

Nearly 250,000 shares were traded last week, much lower than the half-million mark in mid-February.

Bank of Valletta plc’s share price was volatile last week, falling to a low of €2.88 from €2.969, and then slowly climbing back to €2.94 by Friday.

Although BoV was the most traded equity last week, the volume was much lower than in previous months. Just over 66,000 shares were exchanged, with the share price ending nearly 1%.

A total of 46,150 Malta International Airport plc shares changed ownership last week. MIA’s share price has been very volatile over the past weeks, with the price fluctuating between the €1.70 and €1.80.

In Thursday’s session there was a sudden 5.6% drop in the share price just before MIA’s results for the past year were announced. Some of this loss was reversed in Friday’s session, but the stock still closed the week 3.9% lower at €1.73.

Despite last week’s fall, MIA remains one of the MSE’s best performers, up over 4% so far this year.

Late on Thursday, MIA issued its preliminary statement of annual results for the year ended December 31, 2010. Pre-tax profit is up a significant 20.1% compared to 2009, mainly due to a big increase in airport traffic last year.

MIA expects continued strong passenger numbers in the first half of 2011, with further positive effects from the Cruise and Fly operation that starts in May. But uncertainties remain primarily due to Air Malta’s restructuring, unrest in North Africa, and the haphazard overall global economic recovery.

A final net dividend of € 0.035 per share will be proposed to the AGM, to be paid on May 17 to resistered shareholders as at April 5.

Last week nearly 39,628 Lombard Bank plc shares were traded in four trading sessions but the share price remained almost static closing the week at €3, or 0.33% higher.

Maltapost plc was the only other gainer last week. The share price rose from €1.052 to €1.10. An encouraging 33,313 shares were traded over three sessions.

Maltapost shares have now gained 10% since the start of the year and is back to its all-time high.

Only 23,044 HSBC Bank Malta plc shares were traded last week. The share price fell throughout the week with a sudden slight correction on Friday. The equity closed the week with a moderate 0.38% loss.

Go plc’s share price continues to disappoint, with another sizeable fall, adding to its string of weekly losses since mid-January. Last week the price fell from €1.73 to €1.66.

Go shares have lost over 14% in value so far this year. Volume traded was a moderate 20,000 shares.

On Tuesday, Go reported its preliminary group results for the year ended December 31, 2010. The group registered a normalised operating profit for 2010 (after one-time adjustments) of €23.1 million as against €18.6m in 2009.

Although the group’s local turnover increased it was negatively impacted by its shareholding in Forgendo Ltd.

The group recorded a pre-tax loss of €9.1m compared to €3.2m in 2009, and losses after tax increased from €6.2m in 2009 to €18.1m in 2010.

The board of directors is recommending the payment of a final net dividend of €0.05 per share for shareholders’ approval at the next AGM on June 8, payable on June 11 to registered shareholders as at May 9.

RS2 Software plc was the week’s worst performer. After very volatile intra-week movements the share price closed at €0.35, or 10% lower, on a volume of 17,200 shares.

International Hotel Investments plc was another major loser last week, shedding 8.5% of its value on a negligible volume of 3,800 shares in three deals. Due to its heavy weighting, this loss severely impacted the overall index.

On Tuesday morning, Middlesea Insurance plc issued its financial statement for the year ended December 31, 2010. It made a pre-tax profit of €6.4m compared to a loss in 2009 of €54.4m.

2010 was a stabilisation year for the group, which reset its focus reset on local operations. Furthermore the company consolidated its strong balance sheet and improved its regulatory solvency position.

The board of directors is not recommending the payment of a dividend.

Grand Harbour Marina plc also issue its results last week, reporting an operating loss of €0.37m, which worsened further due to net finance costs to a comprehensive €0.77m loss, compared to €0.82m in 2009.

The company announced a related party transaction to acquire a shareholding in a Turkish marina.

There was over €780,000 worth of trading in local corporate bonds last week. Bond prices fell, particularly those issued by International Hotel Investments plc and Mediterranean Investments Holding plc.

The 6.3% IHI bond maturing in 2013 was the worst performer, falling a hefty 5.26%, and closing the week at €90.

Malta Government bonds were fairly mixed last week as uncertainties in foreign markets saw an initial rush to safety nearly fully reversed by the end of the week. Value traded totalled almost €790,000.

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.