Negative trend finally halted

April’s last week of trading on the Malta Stock Exchange saw rather mixed trades with hefty volumes backing the moves.

Notwithstanding some intra-week fluctuations the MSE index managed to crawl slightly upwards to end Friday’s session 0.7% higher.

Although positive, this result is once again very much an under-performance when compared to the encouraging gains achieved by most equity indices worldwide.

Most of these equity market indices rose on average by about 2%, backing continued positive economic news on a global scale.

The local index has gradually shed 11.5% over the past four months although the losses have somewhat slowed down in the past few weeks.

Individual performances were generally mixed locally, with three of the nine equities traded last week gaining decent ground. On the other hand five equities fell in value, dampening the overall mood. A single equity remained unchanged.

There was a steady climb in trading volume last week which easily surpassed the 400,000 share mark, and rather than being concentrated on very few stocks this increased volume was spread among several equities.

The most heavily traded equity was Go plc, with just over 165,000 shares changing ownership. This equity continues to spiral lower in nearly every session. Last week its share price got hammered by a further 5.60%, bringing the total losses so far this year to 30.3%, nearly the worst performer to date, barring Global Capital plc.

Fimbank plc has continued to retreat into the red, yet to a much lesser extent than Go. Last week the trading of 60,870 shares led the share price to fall 1.14% from $0.88 to $0.87 by Friday’s close.

Over the past four months this equity has drifted 8.4% lower.

The two major local banks had very similar performances and volume levels. Just over 40,000 shares were traded in both Bank of Valletta plc (BoV) and HSBC Bank Malta plc respectively. Although BoV’s share price ended flat week-on-week, HSBC managed to outperform, climbing 3.1% higher than the previous week’s close.

Both stocks corrected slightly on Wednesday, however, reversing all the loss in the subsequent trading sessions.

After close of trading on Friday, Bank of Valletta Group reported it had earned €45.2 million in pre-tax profits in the first six months of the 2010-11 financial year.

This was the result of higher net interest margins and virtually flat net commission and trading income year-on-year, while operating expenses rose minimally.

Loans and advances were in line with the position as at September 2010, while deposits were little changed since the year end. The bank reported that the collective net impairment charge for the period includes a precautionary additional allowance in respect of certain exposures to the events in North Africa.

The board has resolved to declare a gross interim dividend of €0.0625 per share in line with last year’s interim dividend. This will be paid on May 26 to all register bank sharebolders as at May 12.

Trading in RS2 Software plc was slightly above average last week as 40,500 shares changed hands in the first two sessions. This caused the share price to fall 2.1%, which is only a slight fall following the hefty rise in the first week of April.

A total of 23,519 Simonds Farsons Cisk plc shares were exchanged this week. This equity was the week’s best performing stock, soaring by 8.2% to a new high for the year of €1.84. Last week’s move reverses any losses suffered since early February.

Middlesea Insurance plc ended the week 1.2% higher, yet this masks some sharp intra-week volatility with the share price zig-zagging wildly between €0.85 and €0.89, and closing at €0.85.

However, barely 18,000 shares being exchanged. This low volume was also very erratic with the bulk of trading occurring solely on Tuesday.

Malta International Airport plc’share price closed the week slightly lower at €1.699. This equity has been gradually drifting down, eating away some of the gains achieved over the past year or so.

Nevertheless, on a year-to-date basis MIA has improved by 2.35%, outperforming most equities.

Last week, Medserv plc’s share price fell 4.8% to end the week at €4, albeit volume was low as just 2,400 shares changed hands.

Midi plc announced the group’s preliminary statement of annual results for the financial year ended December 31, 2010. It registered a pre-tax profit of €1.51 million in 2010, compared to €1.75m in 2009.

Revenue also fell from €32.21m in 2009 to €25.97m in 2010. Earnings per share dropped by €0.002 to €0.005.

Trading in local corporate bonds was somewhat subdued last week, totalling only €322,656 in value. Price movements were minimal, except for an 8% rise of the 7.15% Mediterranean Investments Holding maturing between 2015-2017. On the other hand, trading in government bonds nearly hit the €25m mark. Price movements were slight and mixed with little to no direction.

Last week the Treasury announced the issue of two government stock –, 4.25% MGS 2017 (III) and 5.25% MGS 2030 (I) Fungibility Issue. Any combination of these two stocks shall in the aggregate be €100m subject to an over-allotment option of €50m.

The price for each stock will be determined on Thursday.

A floating rate issue maturing in 2013 linked to the six-month Euribor will also be issued for a total amount of €52m. Applications will open on May 9, and close either on May 11 for applications not exceeding €100,000 or May 13 for applications in the form of sealed bids.

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 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.