BOV's share price touches 7-week low
Fresh sell orders emerged during this morning's session sending Bank of Valletta plc's share price to a new seven-week low of €2.15 before partially recovering to close today's trading session at the €2.19 level.
Today's closing price still represents a 0.5% drop from yesterday's close.
A total of 59,200 shares changed hands across 15 trades. Yesterday afternoon BOV announced that the latest EU-wide bank stress results, published by the European Banking Authority, confirmed that the bank enjoyed a strong Tier 1 Capital ratio (a measure of capital adequacy by comparing shareholders' capital to risk-weighted assets) of 10.6 per cent, which is significantly above the minimum of nine per cent required by European regulation.
BOV is shortly expected to publish its September 2012 full-year results.
Meanwhile, the share price of Simonds Farsons Cisk plc was supported at its four-year high of €2.30 as another 4,000 shares changed hands at this level. The recently declared net interim dividend of 1c33 per share will now be paid on October 19.
Similarly, the shares of RS2 Software plc maintained their multi-year high of 60c on a single trade of 2,240 shares. Last Sunday, RS2 announced that it was awarded a new licence agreement for Latin America with a value of €5 million.
On the bond market, the Rizzo Farrugia MGS Index eased minimally lower to 998.031 points as the Central Bank lowered its bid prices for the medium and long term government paper.
This contrasted with this morning's dip in eurozone yields below the 1.45 per cent level.
However, this afternoon, the benchmark 10-year German bund yields shot up to the 1.465 per cent level on speculation that the Eurozone will provide insurance to whoever buys Spanish government bonds.
During today's monetary policy meetings, both the European Central Bank and the Bank of England maintained interest rates unchanged at 0.75 per cent and 0.5 per cent, respectively.
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Paul Azzopardi
Oct 5th 2012, 18:14
BOV is a good investment at this level and long-term investors should take opportunity of such dips in the share price to buy shares. One should look to buy when prices are low, not when they are high.
One should also invest gradually over a period of time because the current weakness may continue for some time. Although we're on a slow recovery, the economy is likely to remain weak for some time, and this is BOV's main investment via loans and services. Share prices in Europe are also weak. In view of these factors, we might see weaker prices even though the current BOV share price is attractive as it is.
BOV has a very strong market position across most financial services and has maintained good profitability even in these most difficult times around the world, and for all banks. Over the years, it has also put together teams of very capable people. In my opinion, this strength is not adequately reflected in the price.
BOV recently attracted negative sentiment because of the property fund dispute and because it cut dividends (which it should not have, in my opinion), but these things will be forgotten. Even though the dividend was cut, however, over its history, BOV has compensated shareholders handsomely by way of dividend and stock distributions. The dividend yield after the cut is still attractive.
Quite apart from the share valuation and its attractiveness for investors, as a Maltese I believe we should be generally supportive of our only remaining major bank because family bickering often attracts outside vultures.
(This is only my opinion and not investment advice, nor a solicitation to buy the shares. Securities' prices fluctuate. Please consult your advisers.)
M. Attard
Oct 5th 2012, 05:10
BOV should be trading at seven year low, not just seven week low.
M Cassar
Oct 4th 2012, 16:05
Before BOV changes two or three of the people at the top it will continue to languish in darkness. They still have not realised that they have a seious problem and much less are doing something sensible about it.
Please choose the reason of your report below: