High demand for Malta Government Stocks

The fourth week of the month of January saw the Malta Stock Exchange index widening its week-on-week losses. Yesterday, the local equity index closed at 3,065.923 points, hence lower by 0.5 per cent on the week. Gains in the banking sector equities were not enough to offset losses by two highly capitalised equities. Furthermore, investors’ attention was this week focused on the fixed-income market.

In the Corporate Bonds market, €1.1 million was traded over 27 issues. Corporate yields remained mixed as 10 issues gained, another 10 lost ground while the remaining seven closed flat. The 6.25% IHI maturing between 2015 and 2019 and the 6.25% Mediterranean Bank 2015 were the hardest hit. This week’s loss for the latter was 2.4 per cent while the IHI bond shed almost three per cent. The 5.9% HBSC Bank Malta 2018 gained further ground with a 1.1 per cent gain to end the week at €105.65.

In the Government Bonds market turnover reached a massive €28.7 million traded across 441 transactions. Nearly one-third of this week’s trading took place in the 4.3% MGS 2016 followed by the recent issue of the 5.2% MGS 2031.

Yesterday the Treasury an­nounced the prices of the new Government Stock issues, which will be offered to the public early next week. In fact two new tranches of the 4.25% MGS 2017 and the 5.2% MGS 2031 will be offered at a price of €103.75 and €101.75 respectively. The third issue, which is a 10-year bond at coupon of 4.3 per cent and maturing in 2022, and will be offered at €100.

Following last week’s decline, Bank of Valletta plc shares headed the list of gainers this week with a 1.35 per cent move to the upside. The bank closed the week at €2.25 after some intra-week volatility as the equity traded between a weekly low of €2.19 and a high of €2.26. This week the equity was the second most liquid, with volume remaining constant in the opening three sessions while it declined thereafter. Over 87,000 shares were dealt across 89 deals. Since the beginning of the year, the equity returned 1.3 per cent.

HSBC Bank Malta plc edged minimally higher as the equity closed at €2.56, up by a mere 0.4 per cent. The equity failed to gain investors’ assurance as volume traded remained weak. A total of 21,466 shares were traded over 17 transactions.

Meanwhile one deal of 1,500 shares in Lombard Bank plc pushed the equity higher by 0.8 per cent or €0.02. On the contrary, FIMBank plc lost a meagre 0.26 per cent as the equity was traded at $0.768 during Monday’s session. Trading volume in the equity improved significantly to over 174,000 shares.

The other financial to close lower was Middlesea Insurance plc, which was also the overall worst performer, as the share price lost a hefty 10 per cent. However, trading volume was significantly thin as nearly 1,400 shares changed hands over five deals. The equity lost ground mid-week on two deals of 100 shares while it traded flat thereafter.

Malta International Airport plc shares closed minimally lower after an unusually volatile week. In fact, the equity traded between a weekly high of €1.75 and a low of €1.70 while it finished yesterday’s session at €1.74, down by 0.57 per cent on the week. Notwithstanding this decline, the airport operator is still up by three per cent on the year. This week the equity was among the most sought after equities as 57,000 shares changed hands across 20 deals.

Investors carried on battering Go plc shares as the equity shed 5.3 per cent or €0.05 as eight deals of 14,600 shares were executed. Trading in the equity this week was pathetic with the equity being active only across two trading sessions. Go kicked off the week with a meagre decline of 0.5 per cent, while it succumbed to selling pressure on Wednesday on low volumes.

The negative performance by International Hotel Investments plc shares proved to be a major drag on the local market, given the company’s high capitalisation on the MSE. Two deals of almost 9,000 shares pushed the equity lower by 2.4 per cent to €0.82.

Five thin trades in Maltapost plc improved the equity’s price by one per cent as the postal operator returned to the €1 level. Trading volume was not encouraging as 2,000 shares worth slightly less than €2,000 were traded.

In the IT sector, RS2 Software plc closed flat at €0.60 on significant trading volume, with 70,300 shares were dealt across nine transactions.

Simonds Farsons Cisk plc shares closed flat at €1.80 after having traded at a weekly low of €1.79.

This article, which was com­­piled by Atlas JMFS Investment Services Limited, 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.

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