The Malta Stock Exchange (MSE) index continued on its upward trend despite the sharp falls in global equity markets which plunged in reaction to the Brexit vote. Despite a marginal fall of 0.5 per cent last Friday, the MSE advanced by half a per cent on the week after four positive sessions, thus closing at 4,479.895 points – its fourth consecutive weekly gain.
This positive performance was buoyed by gains in International Hotel Investments plc (IHI) and GO plc shares as opposed to declines in Bank of Valletta plc (BOV) and Malta International Airport plc (MIA).
Total turnover increased from €1.7 million to €2m, as activity was spread across 19 equities, of which gainers and fallers amounted to six, while seven stood unchanged.
The share price of IHI rallied by six per cent to a 12-week high of €0.689 after six deals of 38,936 shares.
GO partially recovered from its previous week’s 1.7 per cent decline by 1.1 per cent, having reached €2.88 after the week’s highest turnover worth €479,000.
The company published the opinion of its board of directors regarding the offer document published on June 14 by TT ML Ltd, a fully-owned subsidiary of Société Nationale des Télécommunications (Tunisie Telecom). GO said the acquisition will be beneficial to the company as Tunisie Telecom is committed to continue investing in Malta and to support GO’s investments in other segments, including 4G, the FTTH roll-out and expansion of data centres. It expessed no opinion regarding the price offer in the document.
In the banking sector, Lombard Bank Malta plc shares outperformed its peers as its share price advanced by 1.1 per cent by Friday’s trading session. The equity closed the week at €2.021, as it traded in seven deals of 124,269 shares.
Similarly, Fimbank plc shares continued their upward trajectory, extending their previous 8.3 per cent gain by a further 1.1 per cent to close the week at $0.92, after 14 deals of 511,481 shares.
BOV shares retracted by 0.6 per cent to €2.201, as 60,786 shares changed hands in 40 deals, while the share price of HSBC Bank Malta plc remained unchanged at €1.60 after 12 deals of 18,253 shares.
Last Thursday, HSBC announced that it has recognised €7.6 million as income from the cash consideration and preferred stock convertibles into ordinary shares it held in Visa Europe Ltd, which was acquired by Visa Inc. last Tuesday. This one-off gain, will be accounted for in the ‘Net operating income’ in the income statement for the period ending June 30, 2016. Another cash payment will be made in 2019, estimated at €1.4 million.
Meanwhile, BOV received a total consideration of €29 million, which will be reflected in the bank’s financial statements for the financial year ending September 30, 2016, with a deferred cash payment, including interest, to follow in three years’ time. The bank will be retaining this consideration in its reserves in order to strengthen its Core Tier 1 regulatory capital.
Dragging down the index was the share price of MIA, which fell by 3.8 per cent to a 24-week low of €4.10. The equity was active in 13 deals of 11,490 shares.
On a positive note, Maltapost plc shares spiked to €2.00 – a level last seen in March, albeit on a thin volume 100 shares traded in last Thursday’s session. A total of three deals of 12,576 shares were executed to notch a weekly gain of 11.1 per cent.
The logistics and services company for oil and gas, Medserv plc, advanced by 2.3 per cent to €1.79, following three deals of 43,400 shares.
In the property sector, Malita Investments plc shares closed 1.1 per cent lower on the week, to €0.89, as two deals of 11,200 shares were negotiated, while nine deals of 77,872 shares in Malta Properties Company plc lowered its share value by 0.6 per cent, to €0.507.
Plaza Centres plc, Tigné Mall plc and Midi plc shares closed unchanged at €1.07, €1.06 and €0.38, respectively.
Among the list of fallers, Mapfre Middlesea plc shares gave up 0.5 per cent of their previous gains, having closed the week at €2.19, over a low volume of 1,556 shares spread across five deals.
Moreover, the share price of Simonds Farsons Cisk plc inched 0.3 per cent lower to €6.28 after six deals of 16,300 shares.
In the IT services sector, RS2 Software plc shares remained unchanged at €3.50, despite recording 16 deals of 117,030 shares. During the week, RS2 announced that during its annual general meeting held last Thursday, the shareholders considered and approved several resolutions, including the financial statements for the year ended December 31, 2015, and a net final dividend of €0.0278 per ordinary share to be paid on Thursday.
The other non-movers were Loqus Holdings plc and Santumas Shareholdings plc, which ended the week flat at €0.131 and €2.35 respectively.
In the corporate bond market, total trading value amounted to €486,000 –down by 53 per cent – spread across 30 issues, of which eight rose, 10 closed in the red and 12 stood unchanged. Ther week’s best performance was recording by the recently issued five per cent Global Capital plc unsecured € 2021 issue which ticked two per cent higher to €102.
After close of trading on Friday, IHI announced that it has submitted an application to list €55 million in secured bonds redeemable in 2026. Subject to regulatory approval, IHI shareholders will be given preference to subscribe to the first €30 million of the new bonds. Thursday is the cut-off date for this eligibility.
In the sovereign debt market, of the 23 active stocks, 10 advanced and 13 declined. Total turnover stood at €24.2 million – one-fourth of which was recorded in the 2.5 per cent MGS 2036 and three per cent MGS 2040 issues, which closed the week at €105.40 and €112 respectively.
Moving in sympathy with the sovereign bonds of the European peripherals, local sovereign debt initially traded the week higher as Brexit fears eased. However, following the announcement of the referendum result on Friday morning, all the traded sovereign debt issues fell as yields moved higher.
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 1/2, St Joseph High Street, Ħamrun, or on Tel. 2122 4410 or e-mail jesmond.mizzi@jesmondmizzi.com.