Negative sentiment returns to the MSE

The positive experience in the last week of April was quickly reversed as the Malta Stock Exchange index was dragged down yet again, reaching 3,301.571, or 1.33% lower, by last Friday’s session.

Trading volume nearly hit the 650,000 mark, a very high level compared to previous weeks. This very high volume was spread out very evenly, confirming that sellers are still very much in control, with the negative trend totally intact week after week, despite a very short positive spell.

Overall, the local market has shed 12.7% since the start of the year, dragged down not only by the major banks but also by the general negative vibe present in most local equities.

However, the fall in the MSE index should be compared to more negative moves in most international equity markets in the past few days. Equities worldwide drifted lower following some disappointing economic news, but recovered somewhat on Friday following better-than-expected emp-loyment figures for the month of April in the US.

Last week, trading occurred in 13 stocks, with a single equity ending with week-on-week gains. Two equities saw their share prices remain intact while the remaining 10 succumbed to selling pressure.

The largest traded volume last week occurred in RS2 Software plc equities, with just over 190,000 shares changing ownership, mostly in Monday’s session. Notwithstanding this abnormally high volume, the share price fluctuation was moderate, ending the week at €0.50, or 3.66% lower.

In spite of last week’s fall, the share price is still 4.2% above last year’s closing price, therefore very much outperforming the vast majority of stocks on the local exchange.

Go plc continued to trade in the red last week. The share price plunged to a new low of €1.29, therefore shedding a further 4.37% of market value. This equity is now on par with Global Capital plc, having lost more than a third of its value since the start of the current year.

Volumes were hefty last week, totalling 164,180 shares.

The share price of Bank of Valletta plc initially improved very slightly following Friday’s results announcement, yet these gains were quickly surrendered, with the share price plunging into negative territory as the week progressed.

A total of 142,447 shares changed hands, with volumes increasing towards the end of the week backing the 2.78% slide. Friday’s session saw the equity’s price head down to €2.80.

Last week’s negative performance added on to previous losses which have nearly reached 13% in value year-to-date.

Movements in HSBC Bank Malta plc’s share price were somewhat more subdued compared to its major counterpart. The equity fell by 1.67% on much lower volume as 86,713 shares were exchanged throughout the week.

Fimbank plc saw its equity price spiral down to a new year-to-date low, closing at $0.84, or 3.45% lower. However, volume was on the low side as barely 18,000 shares were traded.

This equity has seen its share price head decisively lower, particularly since the last week of January, accumulating 11.6% of losses year-to-date.

Contrary to the moves seen in nearly all equities last week, Middlesea Insurance plc’s share price rallied by a strong 15.29% weekly gain. This performance helped reverse the hefty losses in the previous two months.

This equity is nevertheless still 3.45% below its 2011 starting point. Trading volume totalled 15,648 shares. During the week the company announced that Mapfre Internacional is to increase its commitment to Middlesea Insurance plc after the proposed acquisition of the shares of Munich Re’s 19.9 per cent stake.

Malta International Airport plc’s share price fell by 2.9% last week, yet volume was fairly low as only 13,074 shares were exchanged in two trading sessions. This drop occurred despite the fact that passenger movements at MIA grew by 25.3 per cent in April, reaching 300,123, the highest number ever registered in April.

Last week’s downside move saw this equity shift from positive to negative performance on a year-to-date basis.

Simonds Farsons Cisk plc, Maltapost plc, Island Hotels Group and Lombard Bank plc all lost some value last week yet trading volumes were very low. On the other hand, Loqus Holdings and International Hotels Investments remained unchanged for the week as volumes traded were minimal.

Trading in local corporate bond market was moderate last week with barely €323,000 worth of bonds being exchanged. Bond prices were generally unchanged, yet the 7% GAP Developments maturing between 2011 and 2013 saw its price fall by 2.6% to close at €95, and the 6.25% Corinthia Finance plc euro 2016-2019 bonds fell by over 4% to close at €86.

Local investors’ focus was once again concentrated on Malta Government Stocks, as nearly €4.9 million worth of MGSs were transacted last week. However, local government stock prices were erratic throughout the week, partly being influenced by the issuance of MGSs early next week and also heavily influenced by the risk-on, risk-off trades in most markets abroad.

Furthermore, an important European Central Bank monthly meeting held mid-week added to volatility, despite no movement in interest rates being announced, as expected.

Last week, the Treasury ann-ounced the prices of the government stocks to be issued next week. Both the 4.25% MGS 2017 and the 5.25% MGS 2020 issues will be priced at €100.75.

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.