Global equity market over the course of the past week remained jittery for the second week in a row. All attention continues to be concentrated on issues revolving around Greece – the possibility of an orderly default, its timing and any knock-on effects.
Despite these uncertainties, global indices returned to gains
Question marks relating to these three factors resulted in overall market volatility with investors pausing on Friday as news emerged that tomorrow the European finance ministers could approve the bailout deal.
However, despite these uncertainties global indices returned to gains last week aided by positive economic data from the US. In fact, in the US, the Dow Jones Industrial Average hit a four-year high on Friday, while the Nasdaq Composite last week hit its highest level in more than a decade. This positive trend has resulted in the major global equity indices gaining between six to 16 per cent year to date.
Locally however, the equity market saw one of the worst weeks year to date even though the Malta Stock Exchange Index declined by a minimal 0.17%. Ten out of the 12 traded stocks ended the week in the red, some of which even significantly.
The remaining two climbed higher, influencing the overall index appreciably given the market capitalisation of one of the stocks. However, overall, the local market sentiment was very dull with the index now having shed 3.4% since the start of the year.
Total trading volumes were very high yet much more than half of this weekly volume related to Crimsonwing plc, which saw half a million shares change ownership. These deals resulted in a hefty decline of 11.1%, closing the week at €0.16.
Such weekly trading quantities are however very unusual for this stock. Towards the end of the week, an Interim Director’s Statement was issued, affirming that the outlook for the year-end net profit performance is broadly similar to last year. The announcement also stated that the net performance has been impacted in particular by the losses in the Crimsonwing NL (VDA) business unit, which was subject to extensive restructuring with associated costs during the year. Nevertheless, the directors are optimistic about 2012 notwithstanding the tough trading conditions in the Eurozone.
Substantial trading occurred also in International Hotel Investments plc, which saw its share price trade higher by an attractive 4%. Last week’s trade somewhat reversed the sharp declines occurring during the previous week. Indeed encouragingly, whereas the decline came about on minor volumes, the quick rebound was supported by significant amounts.
Slightly more than 65,000 Bank of Valletta plc shares were exchanged over the week. Such trading however led to a gradual decline in the equity share price leading to an overall weekly loss of 2%. The share price therefore closed the week at € 2.17, a multi-month new low. The steady decline recorded throughout most of last year has been reignited, this despite being one of the most traded equities on the local market.
Contrary to its main counterpart, HSBC Bank Malta plc managed to close the week in positive territory albeit very moderately. The share price climbed 0.4% on minor volume however. Trading volume in this stock remains anemic week after week with barely any significant share price changes as investors seem to be awaiting the annual financial results of the company, which are to be issued on Friday.
Malta International Airport plc has given up some gains last week as it slid 2.3% to close at €1.71. Volumes totaled 33,512 traded over six deals.
Once again, Go plc saw its share price decline to a new low last week. The share price improved initially, yet succumbed to heavy selling pressures on Tuesday. The share price shed a total of 3.3% bringing the cumulative year to date declines to 15.1%.
Obviously, the fate of this stock is very much coupled to the overall Greek economy, which has slid further into recession over the past months notwithstanding recurrent European and IMF monetary aids.
Maltapost plc, GlobalCapital plc and 6PM plc saw hefty downside movements of between 4% to 7.5% in their respective share prices. Trading volumes however barely surpassed the 10,000 level for each equity.
Last week, Maltapost plc issued an Interim Directors’ Statement announcing that the general backdrop against which the company operates continues to be one of subdued sentiment. The negative impact of austerity measures and lack of economic growth in some economies continue to cast doubts on a realistic expectation of an immediate turnaround.
The directors are however confident that the company will deliver a solid performance during the first half of the financial year albeit at a reduced profit level from that of corresponding period last year.
Lombard Bank plc, Fimbank plc and Middlesea Insurance plc all lost value this week yet volumes were overall minimal.
The board of directors of Corinthia Finance plc announced last week it had submitted an application to the Listing Authority of the MFSA requesting the admissibility to listing of €7.5 million in bonds redeemable between 2019 and 2022.
Given such approval, the net proceeds from the New Bonds will be used for the general corporate funding purposes besides the partial redemption of previously issued bonds maturing this April.
Last week, trading in local corporate bonds was subdued at around €1million, with prices remaining generally stable. However, the 5.6% Global Capital bond maturing between 2014 and 2016 saw a jump of 2.5% closing the week at € 82.
Malta Government Stock prices saw minor changes last week as international indecisiveness kept benchmark prices generally stable. Trading however nearly hit the €7.5 million last week though such trading was concentrated solely over three issues.
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 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.