Equities remain generally unsettled

Last week the Malta Stock Exchange and most equity markets abroad continued to experience volatility as overall uncertainty persists, with good and bad news having an immediate impact on global indices.

Buyers and sellers seem to be undecided as to which trend will ultimately prevail- Jesmond Mizzi

Both buyers and sellers seemed to be undecided as to which trend will ultimately prevail. Buyers, at least internationally, were still unconvinced that the bottom has been reached while sellers felt that markets had possibly overreacted to the downside and that almost all the negative news is now priced-in.

On the local market, the MSE index spent most of the week chugging along listlessly and ended the week with a very modest gain of 0.58%. The past week closed the month of September in slightly positive territory, with the index improving 1.24%.

Internationally, September saw further bouts of sharp negativity hitting most indices, similar to August but in a somewhat more subdued manner. Volatility was still acute as uneasiness remained high throughout the month.

Rather than being solely concentrated over very few stocks, local trading volume last week was very evenly distributed among 13 equities. Five of these equities saw their share prices decline, while four others more than offset these losses as they gained market value. The remaining four ended the week unchanged.

Over 260,000 shares were traded, also very evenly spread throughout every trading session of the week.

Bank of Valletta plc was among the losers last week, with nearly 64,000 BoV shares swapping ownership. The share price was very jittery, fluctuating directionlessly between the previous week’s close of €2.53, reaching a high of €2.56, and closing lower at €2.501. The share price therefore shed 1.15% over the week.

Similarly HSBC Bank Malta plc’s share price moved erratically, yet volatility was on low. The price increased from €2.63 to €2.64 and back down again to close unchanged at €2.63. Volume totalled slightly shy of 40,000 shares, exchanged over 34 deals.

Last week, trading volumes for both Crimsonwing plc and RS2 Software plc were fairly hefty, with the former totalling well over 40,000 shares and the latter seeing nearly 36,000 shares changing hands.

Both equities shed some of their market value, with Crimsonwing settling 2.03% in the red and RS2 plc declining by 3.33%. Very probably the fall in the latter equity was mainly a result of profit-taking following the continuous counter-market rally experienced since the start of the year.

Last week, International Hotels Investments plc was the best performing equity on the local market, soaring by 5.26% to climb from €0.76 to €0.80. This rise, however, came about following a similar fall the previous week. Volume nearly hit the 21,000 mark, double that of the previous week, possibly an indication of bullish sentiment.

Share price volatility was sky high for Fimbank plc last week, with the price succumbing to selling pressure intra-week only to reverse some of the losses by Friday.

The share price plunged from $0.77 to $0.70, climbing back up to $0.747 by the end of the week. Nevertheless the price closed nearly 3% lower on trades totalling 20,452 shares.

Similarly, the share price of Simonds Farsons Cisk plc (SFC) saw some hefty movements as it fell rapidly to €1.70 from €1.795, only to revert all this loss to close very minimally higher at €1.80.

Last week, SFC issued its half-yearly financial statement for the six-month period ending July 31. The board resolved to distribute, out of tax-exempt profits, an interim dividend of €0.0133 per share to be paid on October 21 to ordinary shareholders on the register as at the close of business next Friday.

The group profit after tax for the period increased by 21%, mainly attributable to stable sales of beverages on the local and export markets. Continuous efforts to contain overheads and improved results in the franchised food business further contributed to the positive result.

Go plc ended the week unchanged at €1.12, yet during the first two trading sessions the share price had closed 1.8% lower at €1.10 after having traded at a weekly low of €1.05. Volume, however, was unconvincing given that only 13,550 Go shares were traded.

On the other hand nearly the same amount of shares led Malta International Airport plc to improve by 2.61% with the share price closing at €1.57.

Both Plaza Centres plc and Global Capital plc ended the week unchanged after minimal trading volumes.

Last week, trading in local corporate bonds surpassed €0.75 million in value, slightly higher than what was being traded on a weekly basis over the past months.

The best performing bond was the 7.5% Mediterranean Investment Holding bond maturing in 2015, closing 1.01% higher. On the other hand, the 6.6% Eden Finance plc maturing between 2017 and 2020 shed the most in value, albeit by a moderate 0.98%.

Trading in local Malta Government bonds last week was very subdued compared to the previous two months. Prices edged lower, closely following benchmark bond prices. As most European equities edged higher, at least initially, investors shifted their attention away from the safety of government stocks towards equities and commodities in general, hence resulting in some declines in safe bond prices.

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.