Last week, the Malta Stock Exchange (MSE) index reached a two-week high by Wednesday’s session, but then partially retreated in the last two sessions to lock in a week-on-week gain of 0.24 per cent and close at 3,321.763 points. Activity was dominated by two banking equities, Bank of Valletta plc (BOV) and HSBC Bank Malta plc, and to a lesser extent, Malta International Airport plc (MIA).
Trading activity soared on the fixed-income security, whereas in the equity market, total turnover shrank by 57 per cent to €687,000. Out of the 11 traded securities, five gained in value, while losers and non-movers tallied at three.
The most liquid security was that of BOV, accounting for over 50 per cent of total trading value. During the week, the banking equity’s share price reached a high of €2.291 before turning ex-dividend on Friday when it closed at €2.24.
Thursday was investors’ last chance to participate in the final gross dividend payment of €0.0925 per share if approved at the annual general meeting on December 17.
HSBC shares reversed the previous week’s 0.5 per cent decline as 29 deals of 86,177 shares were struck. Last Friday, the company issued its interim directors’ statement, covering the period July 1 to November 14, during which a decline in pre-tax profit was recorded when compared to the same period in 2013.
Revenue was negatively impacted by the current low-interest rate environment across the eurozone. Moreover, higher operating expenses reflect a rise in the cost of compliance and regulation – excluding such items, expenses are marginally below the same period in 2013.
Regarding loans and advances to customers, there were no significant changes, as new lending was offset by early repayments, while customer deposits increased. Lastly, impairment on loans was higher than in 2013 as valuations on properties acting as security were lower, while levels of recoveries weakened.
Middlesea Insurance plc (MSI) shaved 0.4 per cent off its share price on thin volume, to close at €0.99.
Fimbank plc traded flat at $0.63 on one deal of just 1,000 shares.
One of the three equities to close the week at an all-time high was MIA, whose shares jumped by three per cent to €2.40 over a trading volume worth €63,000 – ahead of the interim directors’ statement published last Thursday. During the 10-month period ending October, passenger movements are up by 6.7 per cent over the corresponding period of last year. With regards to the SkyParks Business Centre, in line with projections, this has reached full office space occupancy by its second full year of operation.
Both Malita Investments plc and Tigné Mall plc settled at all-time highs of €0.60 and €0.55 respectively. The special purpose vehicle appreciated by 3.5 per cent as 27,000 shares changed hands in three deals, while two transactions of 31,000 Tigné Mall plc shares pushed its share price up 3.8 per cent.
One other gainer for the week was Grand Harbour Marina plc (GHM), locking in a 0.5 per cent advancement on a single deal of a mere 425 shares. This follows the company’s interim directors’ statement covering the first nine-month period of the year, in which it was reported that the group achieved a nine per cent increase in revenues, while for the first time registering €290,000 in pre-tax profit.
Medserv plc shares edged 0.4 per cent lower to €1.325, as two deals of 4,900 shares were negotiated.
The week’s other non-movers were International Hotel Investments plc and Midi plc, which were active on volumes of 55,400 and 57,500 shares respectively.
On Friday, Midi plc published its interim directors’ statement, outlining that any developments of the Q1 residential block are in line with projections and budget.
An operational loss for the current financial year is expected to be reversed over the coming year, as profits arising from the sale of the Q1 apartments, in line with accounting standards, will be recognised.
In its interim directors’ statement released on Monday, Go plc reported that the group has continued to maintain market share, stable revenues, healthy levels of profitability and cash generation. The board of directors said it is satisfied that the group maintains the momentum required for it to implement its strategy of protecting profitability from core telecommunication operations while pursuing new growth opportunities, both locally and internationally, in the interest of shareholder value. The equity was not active last week.
After close of trading on Friday, Lombard Bank Malta plc announced that during the period July 1 to date, no material events and/or transactions have taken place. The bank said the prevailing difficult market environment continues to condition banking sector performance. A number of factors are exerting pressure on domestic bank profitability, namely the narrowing interest margins, reflecting record low investment yields and high levels of liquidity, and slow loan growth. On the expenditure side, the growing burden of compliance and regulatory costs is having a negative impact on profitability.
In the corporate bond market, 28 issues were traded, of which 12 gained in value, five lost ground, while 11 closed unchanged. Total trading value rose by 54 per cent to €1.18 million, with the 6.2 per cent Mizzi Organisation Finance plc euro 2016-2019 being the most liquid issue, as five transactions of 228,600 nominal were witnessed.
The newly listed five per cent Hal Mann Vella Group plc secured bonds euro 2024 was very active, as buying interest pushed its price up by 3.5 per cent to €103.5, after failing to sustain an intra-week high of €103.8. At its current price, the bond is now yielding around 4.6 per cent.
In the sovereign debt market, activity was spread over 28 issues, with a 42 per cent jump in total turnover to €21.68 million. Unlike most short-dated government stocks, longer-dated issues inched higher, with the exception of the 5.1 per cent MGS 2029 (I) and the 4.1 per cent MGS 2034 (I) r, as they retreated by 0.2 and 0.1 per cent, respectively. This is in line with activity witnessed across the European area as most investors’ appetite was once again tilted towards ‘safe-haven’ assets. The 4.3 per cent MGS 2033 (I) was the most liquid issue, accounting for 38 per cent of total trading value.
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.