Go plc gains 4.65% after four-month drop

Following several weeks of continuous losses bar one positive week at the end of April, the Malta Stock Exchange index managed to advance tepidly as selling pressure eased. Most local equities rebounded from their lows to end the week in positive territory.

The index climbed gradually in nearly every trading session except one, and closed Friday’s session 0.75% higher. Although gains in the share prices of the major two banks contributed to this improvement, the index was also boosted by moderate recoveries in some stocks which had been previously battered.

This improvement was backed by very encouraging trading volume of nearly 560,000 shares transacted throughout the week. This volume was also distributed among the 11 equities traded last week.

Five equities gained ground while three others shed some value. The remaining three ended the week unchanged.

After nearly four months of continuous declines, Go plc’s share price saw a turnaround last week, with the price climbing from €1.29 to €1.35, a welcome 4.65% improvement. Volumes were moderate, with nearly 30,000 Go shares being exchanged.

This equity has been one of the worst performers on the local exchange following heavy selling on hefty volumes, particularly over the past few months.

Meanwhile, Middlesea Insurance plc (MSI) was the best performing local equity last week, with its share price soaring 6.12% week-on-week, closing at €1.04. Last week’s performance puts MSI as one of the few year-to-date gainers. Volume was moderate, however, with just under 20,000 shares transacted.

However, last week’s most widely traded equity from a volume point of view was Fimbank plc, with 150,000 shares changing hands. But the share price remained intact at $0.84, pausing for a breather following significant persisting declines since mid-January this year.

Similarly, International Hotels Investments plc (IHI) saw some hefty trading last week with 144,000 shares transacted over nine deals. The share price remained flat at €0.70. This price level seems to be a strong resistance level given that this equity has traded at the same price for at least the past month.

Last week, IHI issued its interim directors’ statement, detailing positive developments in the London and St Petersburg hotels, the impact on trading in Tripoli, and the promising results generated from the global distribution system developed by the company’s hotel management arm.

Bank of Valletta plc’s share price was initially jittery, but ended the week gradually higher. The price fluctuated between €2.80 and €2.84, yet closed Friday’s session at €2.82, or 0.71% higher than the previous week. Volume totalled nearly 73,000, the bulk of which backed the upward moves.

Similarly, HSBC Bank Malta plc’s share price initially retreated slightly, but climbed higher as the week drew to a close. The share price ended the week €0.01 higher, or 0.34% above the previous week’s closing. Volume was steady , with nearly 71,000 shares changing hands.

HSBC also issued its interim directors’ statement last week, stating that over the past five months the bank continued to perform well, with revenue and profits in line with expectations, notwithstanding a slight softening in loan demand. The bank said it still maintained a strong liquidity position with capital ratios well above regulatory requirements.

However, the bank also commented that although the local economy continues to perform well, a prolonged crisis in Libya, among others, may affect projected GDP growth rates.

Nearly 50,000 Malta International Airport plc shares were traded last week with the share price upped to €1.68 from the previous week’s close of €1.65. The 1.82% improvement last week resulted in this equity closing in positive territory once again on a year-to-date basis. Although the gains since the end of last December are a mere 1.20%, this equity has outperformed the overall index by slightly more than 13%.

Nearly 20,000 RS2 Software plc shares were exchanged last week, but the share price remained intact at €0.50. Minor trading saw Lombard Bank plc, Grand Harbour Marina plc and Maltapost plc shed 0.2%, 0.7% and 0.9% respectively.

Last week, Maltapost issued its review of performance for the six months ending March 31. Revenue increased by 1.4% compared to the same period last year due to increases in international inbound and outbound mail traffic volumes, partially set off by the continued downward trend of traditional mail volumes.

Profit before tax fell 9.3%, partly due to rises in operating costs and employee compensations. Maltapost justified possible further increases in costs in the short term due to branch upgrading and rebranding exercises. The board, however, said such expenses should provide the necessary platform to meet future challenges.

Local corporate bonds transactions last week were slightly subdued. However, a few bonds saw some sharp price movements. The 6.5% International Hotels Investment plc maturing between 2012 and 2014, the 7% Fimbank euro bond maturing between 2012 and 2019 and the 7% Gap Developments soared between four and seven per cent.

On the other hand the 7% Midi bond denominated in Sterling maturing between 2016 and 2018 fell by nearly three per cent.

Moderate movements in international equity markets led to minimal changes in benchmark government bond price movements last week.

This was perfectly mimicked on the local exchange with very minor gains in most of the local government stock prices.

However, volume was hefty, with just over €16 million worth of MGS exchanged. The lion’s share of this volume, however, was concentrated in the 5.7% MGS 2012 issue.

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.