Last week the Malta Stock Exchange (MSE) index had its best week over the past two months as it gained one per cent to close on Friday at a 27-month high of 3,462.062 points. The week started off negatively but a strong gain by Go plc shares mid-week raised investors’ optimism as the index closed higher for three consecutive days.

Among banking equities Bank of Valletta plc (BOV) shares outperformed its peers as HSBC Bank Malta plc edged minimally higher. In the IT sector, Crimsonwing plc shares posted an impressive 10 cent gain as the company announced positive annual results on Thursday.

In terms of turnover, the two major banks dominated activity, followed by Malta International Airport plc (MIA), where turnover reached nearly €145,000. Year-to-date the local equity index is up by 7.8 per cent.

Go plc shares ended the week on a high as the equity broke through the €1.60 price level for the first time since early April. The share price of the telecoms firm fluctuated between a weekly low of €1.54 and a high of €1.66, the week’s closing price. As a result Go ended the week with a hefty eight per cent gain.

This surprise jump in the price of Go shares followed the announcement by Forthnet, in which Go holds an indirect stake, that Zesmero, a Cypriot law firm, has acquired a 27 per cent stake in Forthnet. A total of 54,000 shares were traded last week, up from 20,000 shares the previous week.

In the banking sector, BOV shares managed to break through the €2.30 price level to close at €2.34 as demand improved. The bank’s share price only traded above this week’s close in the early weeks of the year before it adjusted to the bonus share issue which the bank paid its shareholders on January 17.

The value of trading turnover throughout the week reached €200,000, up from €100,000 the previous week. Since January, BOV shares have gained 7.6 per cent in value and reached a 27-month high.

HSBC shares gained a mere 0.2 per cent as the equity returned to €2.72. Trading volume in the bank’s equity more than tripled as 71,000 shares were traded over 15 deals worth almost €200,000. During the week the share price also touched a weekly high of €2.73.

Meanwhile, last week Crimsonwing plc shares were the overall best performers as the IT specialist gained 10.3 per cent, or €0.06, to end the week at an all-time high of €0.64.

On Thursday, the board of directors approved the financial statements for the year ended March 31, 2013. Revenues for the year grew by 17 per cent to €17.8 million while pre-tax profits stood at just under €1 million compared with a €200,000 loss in 2012.

The directors are recommending the payment of a final gross dividend of €0.01 per share, which is subject to approval at the annual general meeting to be held on October 16.

On the downside, RS2 Software plc lost 0.8 per cent to close at €1.30, while thin trading in Grand Harbour Marina plc sent the equity’s share price down by 2.6 per cent, or €0.05, to €1.90. Maltapost plc shed 1.4 per cent, or €0.015, as it ended the week at €1.03.

Lombard Bank plc closed flat at €1.85 after trading at a weekly high of €1.96 while Simonds Farsons Cisk plc closed minimally higher at €2.751. MIA shares closed on Friday unchanged at €2.04 after having traded during the week at a high of €2.05 and a low of €2.

The other non-movers last week were Midi plc, Malita Investments plc, Santumas Shareholdings plc and Fimbank plc, which closed at €0.24, €0.51, €1.85 and $1 respectively.

In the fixed-income market, yields on Malta Government Securities were generally higher as the vast majority of outstanding issues recorded lower prices. The long-dated 5.1 per cent MGS 2029 lost 70 basis points while the recently issued 4.5 per cent MGS 2028 lost 40 basis points as it closed just above the €103 level.

Among the gainers, the six-year 3 per cent MGS 2019 posted a 1.2 per cent gain while the 5.2 per cent MGS 2020 gained 0.7 per cent.

Abroad, last week proved to be a rather volatile week for foreign equity markets, with major indices also having a mixed performance as investors reacted to company earnings reports and economic data.

In the US, house prices continued to rise even though slightly less than analysts were expecting.

Also, better-than-expected economic data on home sales and US manufacturing reminded in­ves­tors that any improvement in the economy will likely speed up the Federal Reserve’s tapering of monetary stimulus.

As a result, yields on US Treasuries spiked as investors sold off at lower prices.

In Asia, the initial manufacturing purchasing managers’ index (PMI) was below expectations, while in Japan, exports continued to grow in June as the monetary policy that the country has embarked on continues to positively impact its economic situation.

Sentiment across European markets took a turn for the better last week as Germany’s manufacturing sector returned to growth, with the July PMI reading rising to a five-month high.

Moreover, German business confidence came out slightly higher than expected, highlighting further the eurozone’s two-speed recovery, and this despite some profit warnings from some of Germany’s leading companies.

Upbeat figures from France for both manufacturing and services sector sent riskier assets higher as equities gained and the single currency moved higher against the US dollar.

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 is 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 2122 4410 or e-mail jesmond.mizzi@jesmondmizzi.com.

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