Last week, the Malta Stock Exchange (MSE) index fell back into the red due to losses in banking and IT equities, and in Malta International Airport plc (MIA). By contrast, Simonds Farsons Cisk plc (SFC), Medserv plc, Maltapost plc and Tigné Mall plc shares closed at multi-period highs. This drove the index to a three-month low of 3,283.788 points by Thursday. It settled marginally higher at 3,286.615 points on Friday – resulting in a week-on-week loss of 1.06 per cent.
Activity in the equity market was in line with the previous week, as 16 equities worth €663,000 were traded.
Six rose in value, seven fell and three closed unchanged.
The primary laggard was HSBC Bank Malta plc, as investors continued to digest the previous week’s directors’ interim statement, leading to a 3.6 per cent drop in HSBC’s share price to €1.90. The equity was traded in the week’s second highest turnover, worth €162,000.
Bank of Valletta plc (BOV) was the most liquid security, as 34 deals of 112,192 shares were struck. Its share price touched an intra-week low of €2.2, but recouped all of its losses by the end of the week.
Fimbank plc shares headed the list of fallers as 94,792 shares changed hands in seven deals. During the week, the bank’s share price touched a three-month low of $0.599, and closed the week at $0.6.
This follows the bank’s interim directors’ statement on Monday, which said the outlook for the bank’s performance for the rest of the year is difficult and negative. This is mainly due to new impairments of several entities in the group which negatively hit improved operating results over the same period last year.
After almost three weeks of inactivity and its interim directors’ statement, Lombard Bank Malta plc shares retreated from their eight-month high of €1.75 on thin volume, as two deals of 1,145 shares to close the week 1.14 per cent lower at €1.73.
Negative sentiment also clouded the IT services sector, as all three listed firms in the sector closed in the red. The worst performer was 6PM Holdings plc, as three deals of 16,150 shares cut the equity’s price by 2.8 per cent, to close at a six-month low of £0.70. Mid-week, 6PM issued its interim directors’ statement, in which it said the group continued to experience a higher level of maturity. The group’s internal strategy was to focus on core products and eliminate third-party involvement as much as possible in its solutions. Results are encouraging and the expectation is that with the change in strategy, growth of revenue and pre-tax profit can still be achieved. Business growth is as planned and the directors hope to be able to recommend the distribution of dividends at the forthcoming annual general meeting.
RS2 Software plc also issued its interim directors’ statement last Wednesday, reporting strong performance in both its software licensing and managed services business. The group has increased consultancy and implementation services for its licensing business. It is negotiating a new licensing deal with a client in Europe that is expected to be concluded in the first quarter of 2015. Due to higher demand for its managed services, the group is negotiating new letters of intent to provide services to clients in Europe and North America. The board projects a positive outlook for the year.
Following the announcement, RS2’s share price initially fell 1.7 per cent but then recouped most of this loss by Friday’s closing session.
After six weeks of inactivity, Crimsonwing plc shares shed 2.5 per cent after a single deal of 2,000 shares. This transaction drove the company’s share price down to €0.769, its lowest level in 14 months.
The week’s other faller was MIA, as it failed to sustain its all-time high of €2.4 following 15 deals worth €88,000. The company’s share price touched intra-week lows of €2.33, to then regain €0.04 by Friday’s session.
Maltapost plc shares retouched their all-time high of €1.2, first reached in October, as 6,562 shares were traded in three transactions. The company’s board will meet on December 9 to consider and approve the financial statements for the year ended September 30.
Medserv plc shares gained 1.9 per cent to close at an 11-month high of €2.35.The company’s interim directors’ statement last Wednesday highlighted that the group’s results are expected to be more or less in line with the forecasts published in April – anticipating a pre-tax profit of €2.2 million. Both bases in Malta and Cyprus are working at high levels of capacity. The only concern relates to delays due to the difficult situation in Libya. It said the group expected to continue to perform strongly in 2015, while continuing to identify new markets and services.
SFC and Tigné Mall plc closed the week at record highs of €3.02 and €0.56 respectively. There was one deal of 12,000 shares in the latter, whereas 980 SFC shares were negotiated in three deals.
After the 0.4 per cent drop in Middlesea Insurance plc’s share price the previous week, four deals of 10,000 shares pushed the equity’s price up by 0.1 per cent.
The week’s non-movers were Santumas Sahreholdings plc, Midi plc, and Malita Investments plc.
In the fixed-income market, activity shrank by 45 per cent in both the sovereign and corporate debt markets. Turnover in the latter stood at €658,000, as 23 issues were traded – of which 10 advanced, five fell and eight were unchanged. The recently issued 5.3 per cent United Finance plc unsecured € bonds 2023 rose two per cent to €102.02. The five per cent Tumas Investments plc unsecured € 2024 closed at €104.6 after a 1.8 per cent rise in price.
As for government stocks, total turnover reached €10.63 million, spread over 27 issues. Long-dated issues dominated the market, with the 4.1 per cent MGS 2034 (I) accounting for 14 per cent of total trading value. All but one issue, with a term to maturity longer than 10 years, inched higher, as opposed to short-dated stocks. This reflects the current scenario in Europe, particulary after ECB president Mario Draghi said the ECB needs to accelerate inflation quickly and boost its asset-purchase programme.
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.