Last week, the Malta Stock Exchange index gave up some of the gains painfully earned over the previous two weeks. Price movements were very limited with a further drop in the volume of trading in equities. Activity was uneventful for most of the week with a minor fall on Friday dragging the index down 0.53% for the week.
Just over 150,000 equities were exchanged last week, much lower than the level earlier in the month. This is typical as the summer lull approaches. Similarly, most equity markets abroad had a fairly flat week with minimal price volatility, possibly indicating that sellers are losing steam following a generally downbeat month.
Twelve equities were traded on the MSE, half of which ended the week with moderate losses while one experienced a sharp drop. One stock managed to climb higher while the rest closed the week unchanged.
Bank of Valletta plc was last week most traded equity with a total of 52,592 equities exchanging hands throughout the week. Initially the share price climbed from €2.79 to €2.829. But this gain was eroded as the week progressed, and with a sharp 1.8% fall on Friday the share price closed 1.43% down to end the week at €2.75.
BoV’s year-to-date losses this year now stands just shy of 14.5%. Friday’s decline came about following the company announcement issued on Thursday detailing BoV’s proposal to La Valette Multi- Manager Property Fund investors. BoV announced a conditional offer to acquire the eligible shares they held in the fund for the sum of €0.75 per qualifying share.
The bank said “the offer is being made in an attempt by BoV to reach a non-confrontational and expeditious closure of those issues which have in recent months become the subject of judicial protests and an ongoing investigation by the MFSA”.
If the offer is accepted by all eligible investors the gross cost is estimated at €14.5 million, which would be taken as a charge against profits before tax in the second half of financial year 2011.
By contrast, HSBC Bank Malta plc managed to end the week in positive territory, climbing a very moderate 0.17%. However, volume failed to surpass the 20,000 mark. Last week’s performance led to a further widening of the discrepancy between the two leading banks, at least from a year-to-date point of view. Although HSBC has shed just over 8% over the past five months, it has still managed to outperform the overall index and surpass BoV by well over six percentage points.
Local investors remained focused on Go plc equities last week with nearly 29,000 shares changing hands throughout the week. Initially the equity slumped from €1.38 to €1.35, yet crawled back up to €1.37 by the end of the week to limit the loss to a mere 0.7%. Some slight price volatility is understandable given the sudden ‘V-shaped’ reversal that occurred in Go’s share price this month.
The volumes and price movements of the remaining shares traded on the local exchange were very moderate. RS2 Software plc’s share price fell by a minimal 0.2% last week with above-average volume of 18,000 shares. The equity ended the week at €0.499.
International Hotels Investments plc (IHI), Fimbank plc and Malta International Airport plc ended the week unchanged on similar volumes of between 9,000 and 11,000 shares.
Minimal volumes led to a 4.6% and 2.8% fall in Midi plc and Simonds Farsons Cisk plc respectively. Maltapost plc and Middlesea plc closed lower, yet trading was very subdued.
Island Hotels Group ended the week unchanged.
Trading in the local corporate bond market last week was somewhat more vibrant than during the previous week with trading totalling nearly €800,000 in value. Last week saw a reversal in some previously badly hammered bonds.
Both the 6.25% Corinthia Finance bond maturing between 2016 and 2019 and the 6.2%-6.8% IHI plc bond maturing in 2013 soared by around 6% last week, with the latter ending back at par.
Early last week Premier Capital plc announced it has been appointed the developmental licensee for McDonald’s in the Greek market. Premier Capital will be taking over 19 restaurants in and around Athens and will be solely responsible for the future development of the McDonald’s business and brand in Greece. Operations commence on June 1.
Later last week Gap plc issued its financial statement for the period ending December 31, 2010.
The results show a group loss before tax of nearly €7 million after providing for an extraordinary loss of €6.7m. The board is not recommending the payment of a final dividend.
The board said sales enquiries continued to be encouraging and the 2010 marketing plan gave reasonably good results.
Sales to non-residents however took a severe downturn at the end of the year with the government’s surprise decision to stop the issuing of residency permits to non-EU nationals.
However, the directors continue to view 2011 with cautious optimism provided the government will reintroduce forthwith the non-resident property scheme.
Local Government Stock prices have remained fairly unchanged once again last week. Such prices have remained generally stagnant over several weeks now as market movements in risky assets and safe havens have been very subdued.
Trading in MGSs last week surpassed €23m in value mostly due to a heavy concentration of deals in the 5.7% MGS 2012, with the Central Bank of Malta acting as market maker.
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 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.