BoV annual pre-tax profit rises by 72%

Last week the Malta Stock Exchange (MSE) index gained 0.8 per cent following a minimal loss the pre­vious week. The local index closed the week at a 64-week high of 3,204.028 points and is now up 3.5 per cent year-to-date.

Contrary to what happened in foreign equity markets last week, the MSE had a fairly good week, yet in the opening session it gave away 0.3 per cent. But in the four sessions that followed investors’ sentiment im­proved ahead of the annual results of Bank of Valletta plc (BoV).

In fact, the upbeat sentiment did not only surround BoV, which was the main contributor to last week’s gain, but shifted also to other equities. Out of the 10 active equi­ties, six gained, Lombard Bank plc closed lower and another three equities closed the week un­changed. Crimsonwing plc shares surged on Tuesday, while Go plc continued to head higher.

In foreign equity markets, risk appetite suffered a setback after US corporate earnings continued to disappoint. US companies warned that that they are facing weaker demand that will have a negative impact on recruitment.

European economic data did nothing to lift sentiment. The French business sentiment index dropped to a two-year low, while EU consumer confidence remained weak despite a minimal upward movement, which however failed to lift sentiment. Investors were reminded that the EU’s economic outlook remains bleak after signs emerged that the German economic powerhouse is slowing down.

To make matters worse Moody’s announced it was downgrading five of Spain’s 17 regions. The selling pressure on the euro intensified while equity markets headed lower as uncertainty surrounding Greece and Spain resurfaced. There were reports that Greece needs an additional €30 billion while Spain still has not requested a bailout.

In the local banking sector, BoV shares topped the list of gainers with a 2.4 per cent or €0.055 rise to end the week at €2.325. After a flat start to the week, the equity reached €2.30 on Tuesday, at which it remained until Thursday.

On Friday, in anticipation of positive financial results, investors raised the equity to €2.325. During the week, trading volume remained more or less in line with the previous week as 100,000 BoV shares were traded in 44 deals.

After close of trading on Friday, the bank announced that the board of directors had approved the audited financial statements for the year ended September 30. It resolv­ed to submit these for shareholders’ approval at the annual general meeting to be held on December 19.

The BoV group made a pre-tax profit of €110.73 million during the financial year, compared to €64.373 million in 2011. Net interest income for the period under review amounted to €147.8 million, a 7.7 per cent rise when compared to the previous year. As a result earnings per share increased to €0.278.

The board also resolved to recom­mend for approval at the AGM the payment of a final gross dividend of €0.13 per share, making for a final net dividend of €0.0845 per share which, if approved, would make for a total gross dividend for the year of €0.19 per share.

A bonus share issue of one share for every nine shares held will be given to shareholders on the bank’s share register as at close of business on January 17, 2013. The bonus issue will be funded by a capitalisation of reserves amounting to €30 million.

HSBC Bank Malta plc gained 0.4 per cent to end the week at €2.76 as trading volume fell to just over 22,000 shares. The lack of liquidity made the bank’s share price more volatile as the equity’s price moved between a weekly high of €2.76 and a low of €2.701. HSBC shares are up seven per cent since January.

Meanwhile, Lombard Bank plc lost a mere 0.5 per cent to end the week at €1.86 as 59,000 shares were traded in four deals. On Thursday, the bank announced that it was planning to increase its share­holding in Maltapost plc from the present holding of 67.7 per cent to not more than 74.5 per cent.

Shortly after the news, the share price of the postal operator rose by 1.6 per cent to €0.72 after three trades of 3,200 shares were exe­cuted. On the other hand, Lom­bard Bank traded flat at €1.86 as 50,000 shares changed ownership in one deal.

Meanwhile, Go plc closed another week higher after the telecoms firm reached the €1 mark after trading at a weekly low of €0.98. Turnover reached almost €55,000 in 25 deals. This week’s gain sends the equity up by two per cent year-to-date.

Crimsonwing plc’s share price jumped by a whopping 25 per cent to €0.32 as a total of 66,400 shares were traded.

In an interim directors’ statement, last week Plaza Centres plc an­nounced increased revenues when compared to the cor­responding period last year, as the company received additional in­come streams from its new ex­tension inaugurated in March 2011.

Moreover, the company added that the main increase in ex­penditure was attributed to ad­ditional listing costs following the redenomination of the company’s shares last June.

Average occupancy till September 30 stood at 87 per cent, four per cent lower than the corresponding period last year. The equity’s share price rose by three per cent.

Meanwhile, both Midi plc and Malita Investments plc traded flat at €0.25 and €0.50 respectively.

Last week the Government an­nounced the prices of the new Malta Government Stock issues which it will be offering for sale as from tomorrow.

The 3.75 per cent MGS 2017 will be offered at €105.00, with a yield-to-maturity (YTM) of 2.63 per cent; the 4.3 per cent MGS 2022 will be offered at €102.50, corresponding to a YTM of 3.98 per cent, and the 4.8 per cent MGS 2028 at €100.75, a YTM of 4.732 per cent.

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.