The downward trend on the Malta Stock Exchange (MSE) index continued but at a slower pace after the index ended the week at 3,080.611 points, after touching the worst reading in the past 10 weeks on Thursday.
Last week the local stock market shed another one per cent after taking a nosedive a week earlier.
Declines in the share prices of heavyweights Bank of Valletta plc (BoV) and International Hotel Investments plc (IHI) had the biggest negative impact on the index. These were partially mitigated by gains in HSBC Bank Malta plc and Go plc, among others.
Trading volume fell slightly to 900,000 shares, of which a quarter took place in BoV.
Last week was also characterised by a high number of company announcements as some listed equities publicised their interim directors’ statement. Interim statements were issued by nearly all the listed banks except for BoV, which had issued its full- year results in the past weeks. Encouraging announcements were also made by two IT companies, RS2 Software plc and 6PM Holdings plc.
In the banking sector, BoV’s share price rose on Monday as investors bid the price higher before the equity turned ex-dividend on Thursday. In fact, the bulk of trading took place in the week’s first three sessions, during which over 200,000 BoV shares were traded.
On Thursday, the equity’s price adjusted to €2.38 to reflect the next dividend payment, and it closed on Friday just shy of €2.40. As a result, the equity ended the week down 2.5 per cent. But BoV shares are still enjoying an eight per cent gain year-to-date.
Meanwhile, HSBC shares closed almost two per cent, or €0.05, higher after it closed Friday’s session at €2.70. Trading volume remained weak as investors initially seemed unwilling to trade the equity. No trading took place in HSBC on Thursday, while on Friday the equity gained 1.7 per cent on insignificant volume.
On Tuesday, the bank announced through an interim directors’ statement that the group’s performance had improved during the period since July 1. The bank said the main contributor to this was the life insurance business. Meanwhile, operating expenses were higher mainly due to restructuring costs.
Demand for loans fell slightly while loan impairments were raised, but below expectations. Over the period, institutional deposits increased while those from the retail sector remained more or less unchanged.
The bank’s share price has gained almost five per cent since January.
Last Wednesday, Lombard Bank plc also issued its interim directors’ statement. The directors said that during the period since July 1, the bank’s profit on ordinary activities was lower than last year but ahead of predictions.
The bank added that its profit at the end of the financial year are expected to be negatively impacted by the low interest rates at which it has to employ its excess liquidity.
Both loans and deposits increased while net interest income has remained at the same level as that of the corresponding period last year. Last week the bank’s share price fell one per cent to €1.80.
Likewise, Fimbank plc shares fell 1.3 per cent on significantly low volume as just one deal of 500 shares was executed.
In its interim directors’ statement the bank referred to the proposed transfer by Massaleh Investments KSCC, which has a stake in Fimbank, to Burgan Bank SAK, and the latter’s intention to inject new equity which will see it increase its prospective holding to above 50 per cent of the bank’s issued share capital.
The bank added that discussions and negotiations have been taking place in recent weeks aimed at bringing the transaction to a more advanced stage and further announcements will be made as soon as there are developments to report.
Also on a negative note, IHI shares closed another week lower, this time by six per cent, as the equity’s share price fell to €0.751 after a total of 73,000 shares were traded. In the same sector, Island Hotels Group plc returned to trading after an absence of over a month as two thin trades were executed. The equity ended the week minimally down at €0.79.
By contrast, Go plc’s share price once again surpassed the €1 level on Friday after the telecoms company experienced a tepid week. The equity closed the week at €1.01. Meanwhile, in the IT sector, RS2 Software plc traded flat at €0.60 while Crimsonwing plc gained five per cent to end the week at €0.399.
Malta International Airport plc closed at €1.77, up one per cent or €0.02 on the week. A total of 55,000 shares change ownership. Meanwhile, Plaza Centres plc lost two per cent to close at €0.52.
Maltapost plc gained two per cent on Friday after the equity moved up to €0.75. This gain came after reports in the local media that the postal operator will be charging higher postage rates as from tomorrow.
Another equity that gained value last week was Simonds Farsons Cisk plc which rose 1.3 per cent to close at €2.43. Meanwhile Middlesea Insurance plc traded flat at €0.74.
In the corporate bonds market turnover jumped to €1 million, up from €600,000 a week ago. The 6.25 per cent Mediterranean Bank 2015 was the most liquid issue, but there were no price changes.
On the positive side, the 5.35 per cent BoV 2019 gained 146 basis points to €104.50.
In the government bond market, yields continued to head lower as prices gained while a total of €7.6 million was traded. The highest gain was that of the long-dated 5.2 per cent MGS 2031 which moved 100 basis points higher to €104.30.
On Friday the recent Malta Government Stock issues were admitted to trading on the MSE.
This article, which was compiled by Jesmond Mizzi, managing director of Jesmond Mizzi Financial Advisers Ltd, does not intend to give investment advice and the contents therein should not be construed as such. The company 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 Jesmond Mizzi Financial Advisers at 67, Level 3, South Street, Valletta, or on tel. 2122 4410 or e-mail jesmond.mizzi@jesmondmizzi.com.