The Malta Stock Exchange (MSE) index ended July on a positive note, locking in a 2.82 per cent gain, completely reversing June’s loss of 2.8 per cent. Furthermore, gains were extended last Friday, the first trading day of August – to a seven-week high of 3,396.234 points.
The index kicked off the week in the red, to then pare back all the loss by Friday. Go plc and Malta International Airport plc (MIA) shares hit fresh multi-year highs while those of Lombard Bank plc reversed most of its losses so far this year.
Out of the 13 traded securities, four rose in value, six fell and three closed unchanged. Equity market turnover rose by 20 per cent to €1.17 million, of which 38 per cent was dealt in RS2 Software plc shares.
Another 37 per cent of the trading value was in financial services equities. There was relatively thin trading in Lombard shares, but two deals worth €4,400 lifted the equity’s price by 13.3 per cent to €1.7, a few cents shy of its price on January 1 of €1.724 (adjusted for 1:20 bonus issue).
By contrast, HSBC Bank Malta plc shares stymied the index from reaching on higher grounds, as they slid by a further 1.5 per cent on 37 deals of 121,896 shares. The equity traded in the €2 to €2.1 price band and last Friday the share price recovered two per cent to close at €2.04. Tomorrow the bank is expected to publish its interim results for the six months ended June 30.
Bank of Valletta plc (BOV) shares gained 5.5 per cent in July, but retreated by 1.4 per cent last Friday following its interim directors’ statement on Thursday. The report highlighted that demand for business credit was weak but partly countered by robust demand for home loans. Liquidity improved as a result of more deposits as opposed to lending. Interest margins were negatively impacted by the continued low- yielding environment and the European Central Bank (ECB)’s negative interest rates on overnight deposits. Last week, BOV shares were traded across 42 deals worth €177,000.
Middlesea Insurance plc shares shed 0.6 per cent last week. In July the share price fell 1.1 per cent.
July’s top performer was Go plc, whose shares rallied by 16.7 per cent to reach fresh six-year highs. Investors sought the company’s shares following the positive announcements by Greek internet service provider Forthnet SA, in which Go has an indirect stake through Forgendo Ltd, its joint venture company with Emirates International Telecommunications (Malta) Ltd. The announcements relate to a joint non-binding indicative proposal by Vodafone Group Services Ltd and Wind Hellas Telecommunications SA to buy all Forthnet shares; and a separate non-binding proposal by OTE SA to acquire Nova, Forthnet’s pay-TV business.
Go’s share price has surged in value on speculation that these proposals will eventually take place. Last week, Go shares rose 1.7 per cent to a new six-year high of €2.4.
MIA shares rose 2.2 per cent to an all-time high of €2.35, following positive interim financial results published last Thursday. This weekly gain accounts for much of the 2.6 per cent price rise in July. The group registered a pre-tax profit of €10.44 million for the six months ended June 30, compared to €8.03 million in the same period last year. Revenue for the period rose 11.5 per cent, to €28.06 million. The company board has approved the payment of a net interim dividend of €0.03 net per share, to all registered shareholders as at August 18. Last week there were 12 deals of 10,506 MIA shares.
The week’s other gainer was RS2, whose shares recovered two per cent from its falls in July. There were 14 deals worth €438,000 in the IT equity.
Crimsonwing plc slipped by 0.6 per cent after one deal of 3,500 shares to settle at a monthly gain of 0.6 per cent.
Plaza Centres plc headed the list of fallers, after seven deals of 46,094 shares dragged the equity’s price down by 6.7 per cent despite the positive interim results published the previous week.
Simonds Farsons Cisk plc (SFC) shares settled at a year-to-date low of €2.87, as 6,967 shares changed hands in five deals. In July, the equity fell 2.7 per cent, thus erasing nearly all this year’s gains.
Tigné Mall plc shares ended the week down by one per cent after four deals of 119,800 shares. Last Friday, the company announced its board of directors would meet on August 27 to approve the interim results for the period ended June 30, and the possible declaration of a dividend.
The week’s other non movers were Maltapost plc and Malita Investments plc. The latter published its interim results for the period ended June 30. It registered a pre-tax profit of €8.2 million, compared to €6.8 million in 2013. Revenue for the period amounted to €3.4 million, a 0.5 per cent increase from 2013. The directors approved the payment of an interim net dividend of €0.00975 per share to be paid on September 12, to registered shareholders at close of business on August 11.
In the corporate bond market, 26 issues were negotiated, of which 11 rose, seven lost ground, while eight closed unchanged. Turnover stood at €950,000, up from €889,000 the previous week. The worst performing issues were those of Mediterranean Investment Holdings plc (MIH), reflecting the current geo-political turmoil across North Africa – with MIH having its business in Libya. The 7.5 per cent bond maturing next year, closed the week below par at €96, a drop of four per cent.
In the sovereign debt market, turnover fell by 22 per cent to €24.45 million, spread over 24 issues, most of which rose in value, albeit slightly higher yields were observed in 20-year European government bonds. The week’s two most liquid issues were the 4.5 per cent MGS 2028(II) and the 5.25 per cent MGS 2030 (I), which in aggregate accounted for over half of total trading value.
On Thursday, the Treasury announced that demand by the public for the recently issued government stocks exceeded the amount on issue, together with the overallotment option. As a result, the aggregate amount on issue shall total €180 million and as a result no balance is available for allocation under the auction/bid system.
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 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 jesmond.mizzi@jesmondmizzi.com.