Last Friday, the Accountant General announced the issue of €100 million of Malta Government Stocks (MGS), subject to an overallotment of €80 million in the event of oversubscription. The issue will be open to the public in the first week of June. It will pay a yearly coupon of 4.3 per cent and will mature in 2033. The stock’s price will be set on Thursday.
Trading on the Malta Stock Exchange (MSE) last week was mixed. The MSE index eased by 0.44 per cent to 3,406.68 points, following a slight rebound by Friday from an eight-month low of 3,398.197 points. Gains in Bank of Valletta plc (BOV) and Malta International Airport plc (MIA) helped reduced the index’s decline. The main fallers last week were Fimbank plc, Go plc, and International Hotel Investments plc (IHI) after the latter traded ex-dividend.
Thirteen equities traded, of which five gained, five fell, and three closed unchanged. Total trading value was €615,000, in line with the previous week.
Middlesea Insurance plc (MSI) headed the gainers, as its share price rose 2.2 per cent after three deals of 3,325 shares. This followed MSI’s interim directors’ statement on Monday, which stressed the satisfactory rise in the group’s non-life and life premium volumes and revenues in the first quarter.
Trading in BOV lifted its share price 1.4 per cent over the week’s highest turnover, worth €276,000. Its price fluctuated from multi-month lows of €2.10 to close at its weekly high of €2.15.
Lombard Bank plc’s share price rose 1.3 per cent after one deal of 2,248 shares. Last Monday the bank’s interim directors’ statement reported that loans, advances and other amounts owed to customers are expected to be in line with the previous year-end. The bank also outlined possible difficulties and uncertainties it may face under the ‘one size fits all’ EU regulatory regime but the bank stressed that it has maintained high liquidity and capital adequacy ratios in excess of regulatory requirements. Last Thursday was investors’ last opportunity to participate in the bank’s bonus issue of one share for every 25 owned, as approved at its AGM last month.
Fimbank plc shares reversed most of their previous week’s two per cent gain, as five deals of 51,654 shares cut the equity’s price by 1.3 per cent. Mid-week it was announced that the listing authority had accepted Fimbank’s application to remain its current listing status on the MSE despite the fact that less than 25 per cent of its shares are in public hands. Moreover, the listing authority also indicated that the bank’s MSE listing will not be prejudiced even if the level of shares owned by the public falls to 17 per cent as a result of the forthcoming $50 million right issue. This approval is subject to the expectation that the bank will seek to restore the proportion of shares in public hands to 25 per cent at the first practical opportunity. The acceptance of the lower threshold is without prejudice to any further measures the listing authority may take with regard to listed companies achieving the free float threshold.
Trading in HSBC Bank Malta plc left the equity’s price almost intact, as 30 deals of 38,007 shares led to a minimal 0.05 per cent decline in price. By mid-week, the equity had traded at a multi-year low of €2.09, to settle at €2.109 by Friday’s close. The bank’s interim directors’ statement last Tuesday highlighted that the main factors contributing to the group’s reduced performance compared with the same period last year were margin compression, slow loan growth and a reduced contribution from the life insurance business. Furthermore, operating expenses rose following increased compliance investments and regulatory fees.
HSBC Bank Malta CEO Mark Watkinson said that despite the challenging environment the group plans to further build the business and invest in their franchise. The company’s board of directors will meet on August 4 to approve the group’s interim results, and consider a possible interim dividend.
Last week’s primary laggard was IHI, whose share price sank 4.8 per cent, or €0.04, after two deals of 4,650 shares. The equity’s drop in price primarily reflects the fact that it traded for the first time since turning ex-dividend – shareholders were entitled to a payment of €0.03 net dividend per share.
Go plc closed at a seven-week low of €1.95 as 38,478 shares changed hands in 18 deals.
Plaza Centres plc’s shares plummeted 5.6 per cent after the week’s second largest volume, worth €82,000, despite the positive and improved results achieved in the first quarter, as announced in the company’s interim directors’ statement last Monday.
Midi plc shares were active after six weeks of inactivity and edged 0.4 per cent higher, after one deal of 5,500 shares.
MIA shares more than reversed their previous week’s negative performance, as seven deals of 7,200 shares pushed the equity’s price up by 1.3 per cent. In its interim directors’ statement on Monday, MIA highlighted the better than forecast results achieved so far this year, with an overall growth of 10.3 per cent in passenger movement compared to the first four months of 2013. MIA’s outlook for this summer remains positive, although at significantly reduced growth rates. At the AGM last Thursday, the payment of a final gross dividend of €0.115384 (€0.075 net) per share was approved.
The week’s non-movers were Medserv plc, RS2 Software plc, and Malita Investments plc, all of which traded on low volumes.
In the corporate bond market, 18 issues were negotiated, of which eight traded lower, eight closed unchanged, while two rose in value. Total turnover stood at €475,000 – a 29 per cent drop over the previous week.
Mid-week, Gasan Finance Company plc announced that the Six per cent Bonds 2014-2016 will be redeemed on Saturday. Meanwhile, the Six per cent AX Investments plc euro 2024 was the most traded issue, as eight deals of 117,100 nominal were struck.
In the sovereign debt market, out of the 24 traded issues, 18 lost ground, five crept higher while one closed unchanged. Total turnover halved to just over €11.5 million. The long-dated 4.45 per cent MGS 2032 (II) r was the most liquid issue, accounting for 45 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.