Foreign equity markets closed the week on a high as US leading indicators and consumer sentiment figures improved. In fact, consumer confidence increased to the highest level in almost six years as higher stock market and cheaper gas prices instilled a positive outlook on the economy.
The positive data, together with another set of positive figures announced on Thursday, spurred demand for the US dollar, while the euro declined. The disappointing growth figures released mid-week did not help the single currency much as the eurozone has seen growth slowing for the sixth month in succession.
In the UK, the economic picture looks less gloomy as the Bank of England reported that the economic outlook had improved for the first time since the crisis. Moreover, unemployment in the UK fell slightly to 7.8 per cent. The news sent the FTSE 100 index higher notwithstanding the fact that during the same day its European peers headed lower.
On the week, the FTSE 100 gained 1.5 per cent, the DAX in Germany was up 1.4 per cent while the S and P 500 in the US hit a record high, having gained 2.1 per cent.
Most local equities fell last week as the Malta Stock Exchange index (MSE) registered losses in four sessions and posted the biggest week-on-week loss for the past four months. In fact, the MSE shed 1.2 per cent to close at 3,330.69 points.
Large caps set the tone as the six most highly capitalised equities lost ground. Among the worst hit equities were Midi plc, HSBC Bank Malta plc, and International Hotel Investments plc (IHI). In the banking sector, Lombard Bank plc was the only gainer while a handful of other equities gained. IT companies took centre stage as all three gained while Malta International Airport plc (MIA) continued to head higher.
HSBC shares lost nearly two per cent, or €0.05, to close at €2.63 after having jumped by three per cent the previous week. The equity was among the most liquid in the opening session but demand fell significantly thereafter even though the share price touched a weekly low of €2.62. A total of 48,000 shares were traded in 18 deals worth €128,000.
Last Thursday, the company issued its interim directors’ statement in which it said that from January 1, 2013, to date, the bank delivered a performance in line with the same period last year.
Meanwhile, Bank of Valletta plc shed 0.5 per cent after the equity seemed to be heading to a positive close. But on Friday the share price lost 1.4 per cent on improving volumes as 47,000 shares were traded.
The equity ended the week at €2.20 after having traded at a weekly high of €2.244.
Conversely, Lombard Bank plc posted a three per cent gain to close at €1.851. But trading volume was rather weak as four transactions of 14,000 shares were executed. Fimbank plc lost one per cent to close at $1.01. The equity’s price fell in early trading on Friday ahead of the interim directors’ statement where the bank reported that profits should be following the trends of last year.
Middlesea Insurance plc was the main laggard among financials as lack of demand at the €0.895 level forced sellers to accept lower bids. On Wednesday, the share price traded at €0.85, which it maintained in the following sessions.
On the upside, MIA shares gained a noteworthy 3.4 per cent, or €0.065, as demand soared on Friday. Investors continue to react positively to the company’s month-on-month figures as the equity closed just shy of the €2 level. Trading volume totalled almost 28,000 shares.
Meanwhile, Plaza Centres plc traded sideways as one deal of 52,000 shares was executed at €0.57 while Midi plc lost a hefty 15 per cent as the share price tumbled on Thursday while it remained unchanged on Friday as demand soared. In fact, as the share price reached the €0.25 level a total of 200,000 shares were traded in one session. The equity is down by nine per cent year-to-date.
IHI shares, which are up 1.7 per cent on the year, lost 1.6 per cent last week to close at €0.875. Likewise, Go plc shares ended the week at €1.579 down by 0.7 per cent on the week after having traded at a weekly low of €1.521. Trading volume improved to 56,000 shares, up from 39,000 a week earlier.
Last week, local investors remained bullish on IT companies as gains ranged from two per cent for Crimsonwing plc to 3.6 per cent for 6PM Holdings plc. The market reacted positively to the announcements made last week by RS2 Software plc and 6PM as both companies are anticipating that the positive results recorded in the past months will be maintained.
The latter closed at £0.58 as 4,400 shares were traded while RS2 shares gained three per cent to reach a new high at €1.07 as trading volume improved to 88,000 shares. The company announced that it expects to conclude further licensing agreements in the coming months. In a separate announcement the company confirmed it has been made aware of a firm intention by a third party to acquire a substantial shareholding, not less than 10 per cent, of the total issued share capital.
The positive outlook shifted onto Crimsonwing plc, which closed the week at €0.56 on reasonable turnover.
Maltapost plc lost one per cent to return to €1.05 while thin trading in Malita Investments plc sent the equity lower by 3.7 per cent to €0.501. Likewise, Medserv plc fell 1.3 per cent on low turnover while Santumas Shareholdings plc rallied by 15.6 per cent.
On Thursday, the Treasury announced that as from tomorrow the Government will be accepting applications for two fixed-rate Malta Government Stocks.
The medium-dated 3 per cent MGS 2019 will be offered at €102.25, hence offering a yield to maturity of 2.611 per cent, while the 4.5 per cent MGS 2028 will be priced at €101.50, with a yield to maturity of €4.365 per cent. Applications for the public open tomorrow and will be received until Wednesday.
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 Mr Mizzi at 67 Level 3, South Street, Valletta, or on Tel: 2122 4410 or e-mail jesmond.mizzi@jesmondmizzi.com.