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Large caps drag MSE index lower

The Malta Stock Exchange (MSE) index closed this year’s first full week of trading down by 1.7 per cent as a number of large caps led by International Hotel Investments plc (IHI) dragged the index in the red. As a result, the MSE has now returned below the 3,200 points level at 3,193.574.

Despite moving higher mid-week, investor sentiment failed to improve and losses outpaced gains as the two major banks also closed in the red. Last week’s decline completely cancelled out the gain by local equities in the year’s opening week. Fourteen equities were traded, of which four gained, seven ended lower, while another three equities closed unchanged.

Throughout the week a total of €1.2 million was traded in 181 transactions. Ahead of its bonus share issue Bank of Valletta plc remained the most liquid equity while Plaza Centres plc followed.

Meanwhile, the companies in the information technology sector closed higher, headed by RS2 Software plc, while Go plc shares enjoyed yet another week and closed in positive territory.

In the banking sector, for the second week running Lombard Bank plc shares did not move in line with its larger peers as its price closed flat.

Bank of Valletta plc (BoV) kicked off the week on a high after it traded at €2.45 but the equity only managed to hold on to this price until Tuesday. Thereafter selling pressure mounted as buyers seemed unwilling to bid the price higher and sellers were forced to dispose of their shares at lower prices.

The final deal on Friday was executed at €2.41 and hence the equity ended the week down by 0.6 per cent. A total of 189,800 BoV shares were traded in 93 deals worth €460,000.

Tomorrow will be the last trading day for investors to be entitled to the next bonus share allocation which the bank is ex­­pected to allot on Thursday.

HSBC Bank Malta plc shares ended the week down by 1.8 per cent, or €0.05, as the last trade of the week was executed at €2.74 after it surged a week earlier. Last week’s fall came on the back of higher turnover as almost €100,000 was traded, up from €31,000 the previous week. Throughout the week the equity’s price fluctuated between a weekly high of €2.765 and a low of €2.703.

Meanwhile, Lombard Bank plc shares traded flat at €1.86 as trading volume improved slightly on the week, yet nowhere near that traded in the other two quoted banks. In fact, 10 deals of 13,450 shares were executed in three trading sessions.

On the upside, Maltapost plc shares gained a hefty 8.2 per cent, or €0.07, as the postal operator’s share price closed at €0.92. During the week over 49,000 Maltapost plc shares changed hands across five transactions

The company held its annual general meeting last Thursday, during which Lombard Bank plc confirmed that the bank intends to increase its shareholding in the company to not more than 74.5 per cent. On Thursday the bank will pay its shareholders a final net dividend of €0.04 either in cash or shares.

Likewise, Go plc shares also ended the week on a positive note as the telecoms company broke the €1.20 level to close at a 16-month high of €1.22, having gained two per cent. Last week’s gain came after higher trading volume as 43,000 shares, up from 19,000 shares a week earlier, were traded in 20 transactions.

On the other hand, IHI shares were the main contributors to the MSE’s decline given the weighting the company has on the local stock market. The equity closed the week with a loss of seven per cent, or €0.06, as one trade of a mere 1,180 shares was executed at €0.80.

On similar trading volume, Island Hotels Group plc shares lost 11.4 per cent, or €0.09, to close at €0.70.

On a similar negative note, Plaza Centres plc shares lost 8.3 per cent to end the week at €0.55. The equity was the most liquid by volume as 662,000 shares changed hands in eight deals worth €360,000.

Meanwhile, both Malta International Airport plc shares and Santumas Shareholding plc edged minimally lower while Simonds Farsons Cisk plc closed flat at €2.50.

In the fixed-income market, over €8.3 million was traded, €7.5 million of which took place in Malta Government Stocks (MGS). Trading in this sector was spread over 18 issues, with the two long-dated issues maturing in 2030 and 2031 being the most active.

Investors bid the prices upwards as they sought higher returns on their investment. A total of €2.56 million was traded in the 5.2 per cent MGS 2031, which ended the week at €105.1 and is now yielding 4.8 per cent, while the 5.25 per cent MGS 2030 closed at €106.64 and its yield to maturity now stands at 4.7 per cent.

In the corporate bonds market trading activity was spread over 24 issues. The 7.5 per cent Mediterranean Bank plc GBP 2019 was the most active issue as €250,000 was traded in three deals. The seven per cent GAP Developments 2011-2013, which is due to mature in April, traded at €100 as nearly 157,000 nominal was traded.

This article, which was compiled by Jesmond Mizzi, managing director of Jesmond Mizzi Financial Advisors 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 a member of the Malta Stock Exchange and a member of the Atlas Group. 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 at 67, Level 3, South Street, Valletta, or on Tel: 2122 4410 or e-mail [email protected].

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