The Malta Stock Exchange (MSE) closed higher for the second week running after the two major banks gained. Bank of Valletta plc (BoV) continued to head higher while the positive sentiment finally shifted onto HSBC Bank Malta plc, whose shares were among the week’s best performers.

The local index closed the week up by 1.4 per cent at 3,090.469 points, the biggest gain in the past six weeks. Last Friday was also the last trading session of August, which saw local equities’ index slip 0.4 per cent following the sharp 2.7 per cent gain in July.

The MSE spent the first three weeks of August in negative territory as the holiday season reached its peak and liquidity dried up as a result. However, in the last two trading weeks turnover improved significantly and equity prices followed, led by BoV, which gained 11.4 per cent in August.

Meanwhile, foreign equity markets ended another week lower despite turning positive on Friday. The major foreign indices kicked off the week in the red after the positive rally on August 24, as German data failed to improve sentiment while the Japanese government lowered its growth forecast for the first time in nearly a year.

As a result the optimism with which markets had ended the previous week swiftly faded as investors chose to focus on actual figures rather than on the optimism which surrounded markets after investors anticipated more quan­titative easing from the US Federal Reserve. In fact, as the week un­folded investors shifted their attention on Fed chairman Ben Bernanke’s speech on Friday at Jackson Hole, Wyoming.

Following Bernanke’s interven­tion, investors increased their positions in equities as prices improved while yields on US Treasuries fell as investors anticipated that the Fed will increase its stimulus to curb unemployment and improve growth. Unemploy­ment continues to be a major headache for the US government as it has barely improved since January.

Locally, BoV shares closed higher at €2.29, up by three per cent or €0.07 on the week. The bank’s share price kicked off on a high on Monday as it touched a weekly high of €2.30, but it later traded at a low of €2.21 as turnover jumped to €200,000, almost double that traded a week earlier.

Following last week’s gain the year-to-date performance of the equity has returned in positive territory by three per cent. In September the bank is expected to close its financial year and investors seem not to want to miss out on a potential rally which is already under way.

After failing to move in line with its larger peer a week earlier, the positive sentiment which has lately surrounded BoV shares finally shifted on to HSBC, which closed the week up by 4.2 per cent or €0.11. The bank’s share price closed at a weekly high of €2.75 after trading at a low of €2.60 as turnover more than doubled to €73,000. Since January, HSBC’s share price has gained nearly seven per cent.

Lombard Bank plc lost a further 2.5 per cent to close the week at €1.95. In August the equity shed nearly 11 per cent from its capi­talisation. But trading volume remained weak and unrep-resentative of the broader market. Throughout August only €30,000 was traded in the equity.

On Tuesday, Fimbank plc announced that for the six months ended June 30, the group posted a net profit of $4.55 (€3.8) million compared to $4.08 (€3.24) million for the same period in 2011, an increase of 12 per cent. At June 30 total consolidated assets and liabilities reached $1.08 (€0.86) billion, an increase of six per cent over the levels reported at the end of 2011. No transactions were recorded in the bank’s equity last week.

Go plc shares closed the week 14 per cent or €0.14 lower as 374,000 shares changed hands in 40 trans­actions ahead of the group’s half-year results publication. The group’s pre-tax profit for the six-month period ended June 30, rose to €20.4 million, which compares favorably to a €14.1 million loss in the same period of 2011. The upturn in profitability was mainly as a result of the €11.4 million gain registered on the properties transferred between the company and the government.

The company still has to an­nounce whether it will participate in the rights issue of Forthnet, in which Go holds a stake through its jointly-controlled entity Forgendo Ltd.

The price of Maltapost plc shares took an 18 per cent or €0.14 nosedive on Wednesday. The equity closed the week at €0.63 as 10 deals worth €23,000 were executed.

Middlesea Insurance plc shares gained five per cent following two weeks of inactivity. A total of 6,500 shares were traded. Meanwhile, on insignificant volume, Simonds Farsons Cisk plc gained 1.5 per cent to end the week at €2.08.

Thin trading in Grand Harbour Marina plc shares sent the share price lower by 6.5 per cent to €1.709 while Malita Investments plc traded flat at €0.52 for the second week in succession.

Malta International Airport plc shares closed flat at €1.74 while International Hotel Investments plc managed to end the week with a slight gain after having traded at a low of €0.75.

Two small deals in Medserv plc left the equity’s price intact at €3.95. Last week, Medserv reported a pre-tax loss of €680,589 for the first six months of 2012, compared to a €141,137 profit in the same period last year.

Global Capital plc also reported a group pre-tax loss of €750,260 for the first six months of 2012, compared to a €1.3 million loss in the same period in 2011.

In the IT sector, Crimsonwing plc posted a hefty 24 per cent gain to close at €0.26 while RS2 Software plc traded unchanged at €0.50, both on low volumes.

In the government bonds market yields improved after the Central Bank lowered its bid prices. The 10-year 4.3% MGS 2022 lost 13 basis points while the long-dated 5.25% MGS 2030 lost 0.5 per cent to €104.20.

This article, which was compiled by Jesmond Mizzi, 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.