Global equity indices greeted 2012 positively as some optimism regarding global economic data emerged in the early hours of the year. Despite some intra-week volatility across the globe, the main major indices ended the week higher, despite retreating on Friday as concerns re-emerged that Europe was heading into a recession.
Investors who buy BoV up to tomorrow will be entitled to a bonus share- Jesmond Mizzi
Early in the week, investors preferred to focus on positive data from the US and ignored the European debt problems, which continue to loom over markets.
Last week, yields on Italian government bonds surpassed 7% once again following some respite in the closing weeks of 2011. Also last week, a French bond auction was well received by markets, although investors demanded higher yields.
Investors are eagerly awaiting the outcome of next week’s bond auctions by Italy and Spain, which are again expected to tap the markets.
Despite equity markets having ended the week higher, currency markets sent the euro lower against safer alternatives. Last week, overnight borrowing from the European Central Bank by financial institutions reached record levels since the end of the previous week. Lack of trust between financial institutions returned, as banks are borrowing billions from the ECB. As a result, the single currency lost value against both the US Dollar and the Japanese Yen, as risk-averse investors continue to turn away from the more risky euro.
Locally, the Malta Stock Exchange index ended last week up by 0.84% at 3,120.92 points.
Bank of Valletta plc shares were the main contributors to last week’s gain. The banking equity surged by 3.2%, or €0.08, ahead of the bonus share issue shareholders are expecting next week. Investors who buy the equity up to tomorrow will be entitled to a bonus share of one share for every eight shares held.
Increasing demand throughout the week pushed the equity’s price from a weekly low of €2.52 to a high of €2.59 reached on Friday. The equity closed the week at €2.58 despite an announcement by the Malta Financial Services Authority on Thursday evening that it had imposed an administrative penalty of €175,174 on BoV “for regulatory breaches related to disclosure of information and suitability of financial instruments sold to the general public”. The bank has until January 26 to appeal against the penalty imposed.
Trading volume in BoV shares increased significantly during the week with over 107,000 shares changing hands across 66 deals, as the equity continues to be the most active share on the MSE.
On much lower volume, HSBC Bank Malta plc’s share price gained 0.81%, or €0.021, on 13 transactions involving 23,460 shares. The equity kicked off the short trading week with two positive sessions. But these gains were swiftly erased on Thursday on insignificant volume, while it closed the week’s last session with a 2% gain to reach €2.60.
Unexpectedly, Lombard Bank plc moved against the trend. The bank’s share price shed a hefty 3.7%, or €0.10, but trading volume was rather weak as a mere 2,200 shares were traded in three deals. The equity was only active in three trading sessions.
Meanwhile, Fimbank plc shares ended the week flat at $0.77 as just over 3,400 shares exchanged ownership. The bank’s board of directors is expected to meet on March 12 to consider and approve the group’s and the bank’s audited financial statement for the year ended December 31. The board is also expected to consider the declaration of a dividend.
Investors continued to hammer Go plc as the equity started the year with a 3% fall. Volatility in the telecoms equity remained as the equity closed the week at €0.95 after having traded at high of €0.98 and an all-time low of €0.90. Despite this sharp fall, only 10 transactions worth €12,500 shares were executed.
Meanwhile, Midi plc shares closed the week higher by 2.6% at €0.39 after having ended the previous year at €0.38. Trading in the equity last week took place only on Friday, during which two abnormally-sized deals were recorded as nearly 63,000 shares were traded over two deals.
Middlesea Insurance plc failed to move higher as the insurance firm closed the week under review flat at €0.80 after trading at a weekly high of €0.82. Four deals of 6,150 shares were spread across two sessions.
Conversely, both Malta International Airport plc and International Hotel Investments plc edged minimally higher to start the year on a positive note. Trading volume in the two equities was encouraging. The airport operator gained 0.6%, or €0.01, to end the week at €1.70. Over 42,000 MIA shares were traded last week in 10 transactions. Meanwhile, six deals of 55,000 IHI shares saw the equity gain a meagre 0.12% to close at €0.845.
Meanwhile both Maltapost plc and Simonds Farsons Cisk plc traded the week flat at €1 and €1.80 respectively. Turnover in both equities was low.
In the government stocks market, week-on-week prices closed mixed. Eight MGS issues closed lower, hence ending the week with a higher yield.
The long-dated 5.2% MGS 2031 (I) lost 0.3% to close at €102.55. The stock was an investors’ favourite, as over €2.5m was traded during the week.
Meanwhile five stocks closed the week in positive territory, with the 7.8% MGS 2018 heading the list with a gain of 0.73%.
In the corporate bonds market 22 bonds were active last week across 64 deals worth €0.4m. The 5.6% Global Capital 2014 – 2016 topped the list of gainers, with a rise of 5%, while the 5.9% HSBC Bank Malta plc 2018 shed 1%.
This article, which was compiled by Jesmond Mizzi, managing director of Atlas JMFS Investment Services Ltd, does not intend to give investment advice and the contents therein should not be construed as such. Atlas JMFS is licensed to conduct investment services by the MFSA and is a member firm of the Malta Stock Exchange. 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 Atlas JMFS at 67/3, South Street, Valletta, or on Tel: 2122 4410 or e-mail jesmond.mizzi@atlasjmfs.com.