The Malta Stock Exchange (MSE) index ended the week at a 16-month low of 3,279.187 points, due to significant losses in the share prices of International Hotel Investment plc (IHI), Fimbank plc, and to a lesser extent, Lombard Bank Malta plc – after disappointing interim results. Meanwhile, RS2 Software plc shares closed just below their all-time high, and Go plc shares continued to trend higher after recent positive news by the Forthnet SA.

Turnover in the equity market rose 39 per cent, to a total value of €1.15 million. Activity was spread over 14 equities, of which half closed in the red, four gained in value, while three closed unchanged.

Middlesea Insurance plc’s share price jumped by 5.6 per cent to a five-month high of €0.95 after eight transactions of 7,529 shares.

HSBC Bank Malta plc shares extended the previous week’s 2.6 per cent gain by 1.8 per cent, as 34,235 shares changed hands in 21 deals. The equity fell to an intra-week low of €1.94, but settled at a high of €1.985. Bank of Valletta plc (BOV) closed unchanged, as losses early in the week were reversed. €224,000 worth of BOV shares were traded, the week’s second highest turnover.

Four deals of 35,788 Fimbank plc shares led to a 4.4 per cent fall to a multi-year low of $0.65. Adjusted for bonus issues, the equity last traded at such low levels in December 2011.

Lombard Bank Malta plc shares plunged by 3.1 per cent after one deal of just 2,000 shares. This followed the group’s interim results issued on Wednesday. The group made a pre-tax profit of €3.27 million, compared to €4.16 million in the same period in 2013. Maltapost plc contributed to the group a pre-tax profit of €1.2 million. The bank’s net interest income stood at €6.81 million, whereas operating income – reflecting the bank’s stake in Maltapost plc – totalled €19.68 million.

These figures are down by 11.4 per cent (net interest income) and 1.1 per cent (operating income), as the drop in interest income from the banking segment more than offset the higher turnover by the postal company. The interest income stream for the period was negatively impacted by the current low-yielding environment in Europe and by efforts to streamline credit risk with regulatory requirements and soft credit demand. Earnings per share (EPS) fell to €0.045.

After close of trading last Friday, Maltapost plc released its interim directors’ statement whereby it was reported that from April 1 to August 22, the company’s performance improved when compared to the same period last year. This was mainly due to new services, product enhancements and a rise in tariffs. Meanwhile, expenses also rose mainly due to staff costs, cross-border mail delivery costs and inflationary pressures. The directors said that by the end of the financial year next month, the company’s profit will be higher compared to last year. There was no trading in the equity.

Go plc more than recouped the previous week’s 0.8 per cent loss as 67,630 shares were traded in 23 deals, pushing the equity’s price up by 2.9 per cent to a new six-year high of €2.45. Recent news by Forthnet SA – the company in which Go has an indirect stake through Forgendo Ltd – show that its pay-TV (Nova) segment has been upgraded to offer a better service to its growing subscriber base, which has soared by over 29 per cent as at the end of June.

IHI’s shares plunged by 7.1 per cent to a record low of €0.65, after five deals of 20,000 shares ahead of the company’s interim results published last Friday afternoon. The group made a pre-tax loss of €13.71 million, as opposed to a €9.46 million loss in the same period last year.

Revenue for the six months ended June 30 totalled €55.59 million, a 6.6 per cent drop from 2013. Although revenues and operating profits increased across most of its hotels in Europe, the group’s overall performance was significantly impacted by political circumstances in Russia and Libya, which negatively impacted demand for its hotels in St Petersburg and Tripoli.

RS2 shares roared back, as they closed €0.01 shy of their all-time high of €2.73 in June. The IT equity was active in the week’s highest turnover, representing 38 per cent of total trading value. Meanwhile, four deals of 10,000 6PM Holdings plc shares left its price intact at £0.735.

Malta International Airport plc (MIA) shares shed 2.2 per cent, or €0.05, as three deals of 34,400 shares were struck. This drop occurred on its first day of trading since turning ex-dividend on August 13. Investors holding MIA shares prior to this date will receive a gross dividend payment of €0.0462 on September 12.

Medserv shares settled at a seven-week low of €1.275 after three deals of 42,500 shares. The oil and gas logistics services firm will announce its interim results this week.

Meanwhile, there were marginal losses in the share prices of Simonds Farsons Cisk plc (SFC) and Malita Investments plc. The latter slipped by 0.2 per cent over a turnover worth €76,000, whereas SFC shares fell a minimal 0.03 per cent after a single deal of just 1,000 shares.

Santumas Shareholdings plc’s equity price was unchanged after a sole transaction of a mere 37 shares.

In the sovereign debt market, most of the 28 traded issues continued to gain in value as yields fall. Turnover shot up from €1.93 million to €27 million, with the five per cent MGS 2021 (I) and the 4.5 per cent MGS 2028 (II) issues accounting for 47 per cent of total trading value. The recently issued 4.1 per cent MGS 2034 (I) r rallied by 3.5 per cent to €104.25 in its first week of trading.

This low-yielding environment reflects expectations that the European Central Bank may take aggressive action to prevent a deflationafter economic data last week in­di­cated that the EU’s recovery may have slowed in August. This led the euro to fall in value against the US dollar and the sterling.

In the corporate bond market turnover shrank to €225,000, from €537,000 the previous week, as 17 issues were traded, of which six inched higher, three lost ground, while eight closed unchanged. The week’s worst performer was the 7.15 per cent Mediterranean Investment Holdings plc euro 2015-2017, which weakened by 2.1 per cent to €94 after six deals of 19,500 nominal. On the contrary, the five per cent Tumas Investments plc Unsecured euro 2024 strengthened by a further 0.4 per cent to €103.

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 jesmond.mizzi@jesmondmizzi.com.

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