Last week the Malta Stock Exchange index again closed higher, albeit very slightly. The index has therefore recovered some of the hefty losses experienced in August and is seemingly going through a modest recovery.
This improvement tends to repeat itself particularly following very sharp downward moves. A similar slight turnaround was experienced in early May following sharp losses during the previous months. Such gains often indicate a pause in a long-term bear market.
Last week’s 0.6% gain was mostly a result of a sharp upward move in one of the largest capitalised company on the local market. However, this move was backed by very limited trading volume.
On the other hand, positive momentum helped prop up global equities last week. Buying interest was especially bolstered following news of coordinated efforts by major central banks.
Trading volume on the local market was still low despite an increase from the previous week. However, it must be noted that trading was heavily skewed towards a single stock.
Only one equity out of the eight stocks traded last week ended in positive territory. Four equities lost value while the remaining three ended the week unchanged.
Bank of Valletta plc (BoV) took the lion’s share of total trading last week. A total of 126,529 shares were exchanged out of nearly 189,300 shares traded throughout the week.
Volatility was sky-high, with the share price initially soaring to €2.62 from €2.59 and dropping sharply to €2.50 by Friday following a judicial protest filed by 40 investors alleging mis-selling of investments by the bank. Indeed Friday’s decline was backed by a significant amount of trading, indicating conviction among local traders.
In all, BoV shed nearly 3.5% last week. Thus, the year-to-date loss has now reached 22%.
The second most widely traded equity last week was Go plc, with 42,260 shares changing hands over 17 deals. Notwithstanding this moderately high trading, share price volatility was low, with the equity shedding a mere €0.001 to close at €1.20. Nevertheless, this represents a new low for this year, after having also traded at €1.19.
Trading in HSBC Bank Malta plc was very low, just shy of 16,000 shares over the five trading sessions. Initially the share price climbed to €2.73 at which price it traded till Thursday’s session. On Friday, however, the bulk of trading pushed the share price back down to €2.70, with the equity therefore ending the week unchanged.
Trading was minimal in the remaining equities, with barely a total of 4,000 shares exchanged throughout the week in five equities. A single trade of 1,000 International Hotel Investments plc shares resulted in the share price shooting up by a significant 9.6%, heavily influencing the overall index given this equity’s large market capitalisation. However, the resilience of this higher price would need to be tested through much deeper trading.
Trading in local corporate bonds surpassed the €650,000 in value last week. The 7.15% Mediterranean Investments Holding plc maturing between 2015 and 2017 priced in euro continued its ascent and closed the week at €99, or 2.06% higher. A similar performance was recorded for the 6.6% Eden Finance plc maturing between 2017 and 2020.
On the other hand, the 6.25% International Hotel Investments plc maturing between 2017 and 2020 fell by nearly 2% last week.
During the week, Gap Developments plc issued their interim report for the six months ended June 30. In spite of depressed worldwide economic conditions, management continued to market the project aggressively both locally and abroad, with sales during the period largely on course both in number as well as in price range.
The directors are cautiously optimistic that with the slowly improving economic climate sales will pick up momentum. The company reported a loss before tax of €1,049,588, as opposed to the loss reported in 2010 of €151,660. The company’s bonds continued to trade unchanged at the price of €100, much higher than the average closing price recorded for the past months.
Action in Malta Government Stocks was slightly subdued last week as most investors lacked direction. Given that risky assets recovered some of their losses, most benchmark government yields improved from their record lows. Similarly, the price of most MGSs traded last week fell slightly last week, minimally erasing some of the gains achieved since the start of August.
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.