Following several weeks of losses, the Malta Stock Exchange index staged a turnaround last week, ending Friday’s session at 3,269.236, or 1.41% higher. Local financials proved to be a key source of support with some losses in the major banks being partly reversed.
The local equities’ performance continues to point towards a disconnect between the local market and global equity markets, with the correlation between the two being very weak at best.
Global stock markets, particularly the major European indices, tumbled last week as global anxieties ballooned rapidly.
In Thursday’s trading session alone most indices shed between 3 and 4% as panic selling took over.
On the other hand, trading on the local market seemed to remain immune, with the MSE index barely shedding half a percentage point on low volume.
Last week, volume traded in the equity market was slightly lower than that of previous weeks, barely surpassing 200,000 shares traded. Only two equities out of the 12 traded lost some ground.
Five other equities ended the week in positive territory while a further five closed unchanged.
Trading in HSBC Bank Malta plc was somewhat reignited last week, with nearly 54,000 shares changing hands.
The week for HSBC shares was generally split into two, with a bullish start shifting into a moderately negative close. However, the losses towards the end of the week failed to offset the initial strong gains, with the equity closing Friday’s session 3.2% higher.
Over the past few weeks the drop in HSBC’s share price had been steadily gathering momentum.
Similarly, Bank of Valletta plc’s share price saw a slight turnaround last week with the equity being bid upwards in most trading sessions. However, trading in this stock was slightly subdued when compared to previous weeks, with only 26,448 BoV shares being traded.
The share price movement was slightly erratic, yet most trades backed the upward move as the share price gained 3.86% on the week.
Lombard Bank plc was another gainer last week as the share price soared by a very encouraging 4.87%, thereby cutting the year-to-date loss nearly by half. Both gains and traded volume rose steadily as the week progressed.
However, last week’s performance is understandable given the persistent drop in this equity’s share price since mid-March.
The share price slid from a high of €3.06 in March, down to last week’s low of €2.565, only to reverse slightly and close at €2.69 by Friday. Nearly 32,000 Lombard shares were traded last week.
Trading volume in Maltapost plc shares was on the high side last week as just over 47,000 were exchanged in a single session. However, the share price remained intact at €1.
Similarly, there was no change in the prices of Plaza Centres plc, Simonds Farsons Cisk plc, Midi plc and RS2 Software plc shares. Volume traded in these stocks was minimal.
On the other hand, despite the very low volume of trading there was a 0.63% increase in Malta International Airport plc’s share price and a 14.3% hike in 6pm Holdings plc’s share price.
Contrasting most local equities, both Go plc and International Hotel Investments plc(IHI) ended the week in the red, with the latter shedding 3.7% and the former declining by 0.85%. Volume was generally on the low side, barely surpassing 17,000 IHI shares for and 11,000 Go shares.
The slight drop in Go’s share price marked a new low for the year, with the equity’s total year-to-date loss now standing at 33.4%.
Trading in local corporate bond market was on the low side last week as the total value traded barely surpassing the €610,000 mark. However, worth noting is the continuous volatility of the 7.5% Mediterranean Investment Holding plc bond maturing in 2015, which dropped by a precipitous 11.6% last week.
As is often the case during sharp corrections in equity markets, most safe government bonds saw a hefty climb in prices as investors dumped all risky assets, preferring the safe haven of such bonds. The benchmark German Government bunds climbed steadily as equities took a pounding.
Malta Government Stocks somewhat mimicked such bonds, ending the week with overall gains throughout the maturity spectrum. As is often the case, the longer term stocks, being the most volatile, improved by the largest amount. Such increased prices led to hefty trading as several investors took their profits. The total value of trading surpassed €12.1 million last week.
Trading in Treasury bills totalled just under €860,000.
This article, which was compiled by Jesmond Mizzi, joint 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.