Downward pressure was apparent on the sovereign bond market last week as all 26 active issues except two closed in the red – with declines ranging from 0.04 to 3.1 per cent.
Last Thursday, European Central Bank president Mario Draghi declared victory over deflation and that the ECB had moved a step forward in easing its ultra-monetary policy – sending the euro and German bond yields higher. This largely affected the prices of longer-dated bonds maturing in 15 to 30 years’ time on a European and local level, with the latter registering declines between 1.4 and 3.1 per cent. Total turnover in local government stocks amounted to €18.93 million.
Similarly, in the corporate debt market a total of 26 issues were active during the week of which 14 fell in value, five gained ground while seven remained afloat – as total turnover amounted to €1.25 million. The 4.25 per cent Bank of Valletta plc € notes 2019 Series 2 Tranche 1 was the strongest performer last week as the price of the bond increased by two per cent to €104.10. On the other hand the weakest performer was the 5.75 per cent International Hotel Investments plc Unsecured € 2025 as the price contracted by 2.2 per cent to €105.40.
In the equity market, the Malta Stock Exchange index broke a four-week winning streak, erasing the previous week’s gain to close 0.408 per cent lower at 4,744.261 points. A dominant seven out of 15 active issues fell in value, seven remained unchanged, while only one gained ground. Three of the top five large capitalised equities, namely HSBC Bank Malta plc, GO plc and Malta International Airport plc (MIA) put downward pressure on the index.
In the banking sector, Bank of Valletta plc (BOV) had a strong session last Friday as it managed to double its weekly turnover to a total value of €595,241, spread over 91 deals. Despite this strong turnover, the equity closed flat at €2.21.
HSBC fell a cent shy of its three-year high of €2.09, as 37 deals generated a total turnover of €373,874.
Last Thursday, Lombard Bank Malta plc’s board of directors of approved the audited financial statements for the financial year ended December 31, 2016, and resolved that they be submitted for approval at the annual general meeting (AGM) to be held on April 27.
The group reported that pre-tax profit rose by 5.1 per cent to €8.24 million when compared to €7.84m in 2015. Performance improved in almost all the bank’s business lines even though growing regulatory demands dampened more aggressive growth. The group produced a robust set of results, proving that it is well positioned to meet the challenges of a fast changing industry while delivering services of the highest standard.
The board resolved to recommend that the AGM approves the payment of a final gross dividend of €0.04 (net dividend €0.026) per nominal €0.25 share. This will be paid on May 5 to registered shareholders as at March 28.
Despite the rise in profit, a single deal of 2,756 shares in last Friday’s session managed to drag the equity down by €0.07 to close at €2.32.
GO plc oscillated to highs of €3.569 to lows of €3.416 but closed the week at €3.53, on a weekly turnover of €255,823 after 19 deals.
Announcing its February traffic results, Malta International Airport plc said it had welcomed 296,250 passengers last month, a 25.2 per cent increase in traffic over the same period in 2016, despite the fact that this year the month was a day shorter. This makes February the fourth consecutive winter month to register double-digit growth, in line with the airport’s strategy to attract more traffic in the shoulder months.
The equity witnessed two negative sessions prior to the above announcement when it declined by 2.1 per cent to €4.15.
International Hotel Investments plc (IHI) outperformed large cap equities to register last week’s only positive performance as 28,446 shares were traded in eight deals, adding 1.6 per cent to the equity’s price, which closed at €0.64.
Mapfre Middlesea plc’s board of directors approved the audited financial statements for the financial year ended December 31, 2016, for approval at the AGM scheduled for April 21. The board is recommending for the AGM’s approval the payment of a final net dividend of €0.03826 per share. The final dividend will be paid on May 19 to registered shareholders at close of business on April 28.
Total group pre-tax profit for the year amounted to €11.65 million, compared to €17.84m the previous year, with after-tax profit at €8.93m compared to €11.87m in 2015. In 2015 the group results were influenced by a one-off pre-tax gain of €5.05m as a result of a major restructuring of Mapfre MSV Life plc’s reinsurance programme as from 2015. The fall in the company’s profits led to a 1.8 per cent fall in the equity’s price intra-week to €2.19 on a single deal of 902 shares.
RS2 Software plc shares started last week positively but curbed its gains during the week to close unchanged at €1.65 after a total turnover of €54,791 spread over 19 deals.
Last Friday Medserv plc erased gains registered during the week to end 1.5 per cent down at €1.60. 31,800 shares were traded in 11 deals.
Midi plc started the week on a positively but fell back to its opening price of €0.33.
Malta Properties Company plc was the weakest performer among its counterparts, shaving 5.3 per cent off its share price to close at €0.52.
Likewise, Tigné Mall plc’s price fell by 2.6 per cent to €1.10 as 9,300 shares changed hands in two deals.
Plaza Centres plc’s board of directors of approved the group’s audited financial statements for the year ended December 31, 2016. The group’s revenue for the year was €2.7 million (2015: €2.4m) a rise of 11.8 per cent, while pre-tax profit amounted to €1.65m compared to €1.59m in 2015. Earnings before interest, tax, depreciation and amortisation rose by 8.2 per cent from €2.09m in 2015 to €2.26m in 2016. Tax fell from €581,202 to €381,628 in view of the fact that the parent company is benefitting from a revised and more beneficial tax regime. The 2016 group figures reflect the contribution of the newly acquired property for the relevant period.
At the forthcoming AGM, the board is recommending approval of the payment of a final net dividend of €0.0294 net per share (2015: €0.0286 net per share). It will be paid on June 6 to registered shareholders at close of business on April 28.
Global Capital plc, Malita Investments plc and Simonds Farsons Cisk plc closed flat at €0.395, €0.77 and €7.20 respectively.
This article, which was compiled by 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 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 Financial Advisors Ltd at 67, Level 3, South Street, Valletta, or on Tel. 2122 4410, or e-mail info@jesmondmizzi.com.