For the fifth consecutive week the Malta Stock Exchange (MSE) index closed in positive territory after a rally on Friday sent the index to a 14-month high at 3,186.397 points. The local equity index is now up three per cent since January. Up till Thursday the MSE seemed to be ending the week flat but on Friday sentiment shifted and equities gained 1.6 per cent, the sharpest daily rise this year.
Major indices experienced their worst weekly losses for four months- Jesmond Mizzi
Turnover improved further with over €1.1 million worth of trading, up from €630,000 a week earlier. Moreover, 13 equities were active, out of the 22 listed on the MSE, of which Midi plc was the most liquid equity by volume traded. Banking equities were among the drivers to last week’s gain following a series of negative performances, while Go plc continued to close the gap from the psycologically-significant €1 level.
In foreign equity markets, upbeat sentiment in the previous week’s last trading session had very little lasting impact on risky assets in the initial days of last week as investors grew cautious ahead of scheduled key meetings. Moreover, gloomy growth forecasts from the International Monetary Fund (IMF) and World Bank did not help sentiment, and as such, investors fled risky assets and sought safety in the US dollar.
To make matters worse, rating agency Standard and Poor’s downgraded Spain’s sovereign debt rating to one notch above junk status, as the country continues to combat unemployment and an ever-slowing economy.
The doom and gloom weakened somewhat as equities and the euro saw a modest lift after French and Italian industrial output figures unexpectedly rose, while Italy successfully managed to auction off €6 billion in three-year paper.
Furthermore, upbeat US jobs data injected more optimistic sentiment. Investors’ risk appetite swiftly returned and the euro was once again seen moving higher against the greenback. The euro took another lift after the IMF’s Christine Lagarde said she thinks Greece and Spain should be given more time to meet their deficit goals.
As the European final trading session was nearing its close, in the US, data compiled for October showed that consumer sentiment surprisingly improved to pre-recession high. The news initially boosted markets but this was short-lived as investors focus to the US earnings season.
Consequently, major indices experienced their worst weekly losses for four months.
On the local market, banking equities took some respite following the continuous declines witnessed lately. HSBC Bank Malta plc topped the list of gainers with a 3.7 per cent, or €0.10 gain after the equity soared on Friday.
Initially investors seemed unwilling to trade the equity after the banking equity was only active mid-week with no price change. However on Friday nearly 34,000 HSBC shares were traded as the final deal was executed at €2.80, a level last reached in early August. Since January, HSBC shares have gained 8.6 per cent, clearly outperforming other banking equities.
Bank of Valletta plc (BoV), the most liquid equity by value, gained 1.8 per cent, or €0.04, to end the week at €2.23. BoV kicked off the week down nearly two per cent as it touched a weekly low of €2.15.
But on Wednesday demand improved and the equity returned to positive territory and closed higher in three successive sessions. A total of 326,000 BoV shares changed ownership in 60 deals as liquidity more than tripled to €700,000.
Lombard Bank plc also closed the week up 3.3 per cent as it ended the week at €1.88, which it traded at on Tuesday and which it maintained thereafter. Yet trading volume was weak as 5,900 shares were traded in three deals.
Fimbank plc was the only banking equity to fall as the trade specialist lost 1.3 per cent to end the week at $0.79 after one deal of 1,100 shares was executed.
Thin trading in Middlesea Insurance plc sent the equity 3.3 per cent, or €0.025 higher as the insurance firm ended the week at €0.78.
Go plc managed a one per cent gain despite a sharp fall on Tuesday as the share price faltered by seven per cent in the final minutes of trading.
Investors took advantage of this decline, and improved demand on Wednesday led the equity to gain five per cent. Go posted another 3.6 per cent gain on Friday and closed the week at €0.979.
On the downside, Midi plc headed the list of equities that lost value, with an 11 per cent fall, to end the week at €0.25. The equity was only active in Thursday’s session, during which three deals of 400,000 shares were recorded.
In the hotel industry, Island Hotels Group plc closed 5.4 per cent lower, just shy of the €0.80, as 550 shares were traded.
Conversely, one deal of 100 shares in Plaza Centres plc improved the equity’s price by 1.7 per cent to €0.59 while Malta International Airport plc snapped a meager 0.3 per cent gain to end the week at €1.735.
Simonds Farsons Cisk plc gained 2.2 per cent, or €0.05, to end the week at €2.35 as 5,000 shares were traded.
Maltapost plc closed flat at €0.71 as trading volume declined to 34,000 shares while Medserv plc traded flat at €3.99.
In the government bond market, running yields generally improved after the Central Bank revised stock prices lower. The 10-year 4.3 per cent MGS 2022 lost 0.12 per cent and closed the week at €103.25 while the long-dated 5.2 per cent MGS 2031 lost 33 basis points to end at €103.11. Almost two million euros worth of trading occurred in this asset class.
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 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.