The holiday-shortened week ended very negatively for the Malta Stock Exchange, contrasting with generally unchanged markets on a global scale.
The week’s dire performance was mainly a result of a hefty fall in IHI plc- Jesmond Mizzi
Last week the MSE index endured its worst performance so far this year as it slumped by just over 2%. The local stock exchange closed Thursday’s session below the 3,000 mark at 2,994.256, or 3.25% lower than its starting point this year.
The week’s dire performance was mainly a result of a hefty fall in International Hotel Investments plc, one of the largest capitalised local companies, albeit on minimal trading volume. So the move should be viewed against the background of overall trading and depth of volumes in order to guage its proper significance.
The mood was still generally downbeat for most of the remaining local equities, but declines were generally subdued.
Global equity markets adopted a wait-and-see attitude for most of the week, as attention remained focused on a Greek deal, which seems to be continuously postponed. Overall, news flow was minimal and hence volatility in share prices and equity indices was very low.
However, as eurozone finance ministers made more demands on the Greek government, and the political and civil unrest intensified on Friday, the US and Europe markets retreated from a six-month high and halted a new year rally. In fact, the S&P 500 in the US posted the first weekly decline in 2012 despite the fall being only 0.2% on the week. Such inertia could be possibly pointing towards a pause following more than two months of steady and attractive gains nearly throughout all economic sectors.
Overall trading volume on the MSE improved from the previous week with nearly 240,000 shares changing hands over the four trading sessions. Once again, however, this jump in volume is also the result of unusually high trading in two equities, which are rarely transacted. Therefore, overall trading on the local exchange continues to be fairly haphazard and lacking proper depth, with price movements indicating the lack of direction of local equity investors.
A total of 70,000 RS2 Software plc shares changed hands last week, with the share price plunging by 8.33% on Monday, and subsequently trading on Wednesday at a new low for the year. The fall in this equity should, however, be seen against its strong upward trend, in which the share price has improved by just over 75% since its lows back in March 2011.
Similarly, there was strong volume of trading in Crimsonwing plc as nearly 62,000 shares changed ownership on Wednesday. These transactions, however, led to the share price plumetting 18.2% from €0.22 to €0.18. Last week’s trading was therefore one of the largest for several months with the share price reaching its lowest point ever.
Bank of Valletta plc was one of the few gainers last week with the share price improving by a modest 0.2%. Intra-week, the price fluctuated between €2.21 and €2.235 yet closed at €2.215. Total volume reached 30,500, down by some 20,000 shares from the previous week.
On the other hand, Go plc’s share price was pushed down again as sellers outshone buyers. The equity fell by 3.37% with the share price closing Thursday’s session at €0.86.
The ongoing downward slide in this stock has therefore continued with last week’s closing price representing a new low for this equity. This stock has already deteriorated by over 12% so far this year.
A total of 24,400 Lombard Bank plc shares were traded last week but there was only a modest decline in its share price. The price closed at €2.53, or 0.8% lower than that of the previous week, and surpassing last year’s low of €2.56.
Low volumes traded in Middlesea Insurance plc (MSI) equities led to a 2.64% fall in the share price, closing the week at €0.70. MSI’s board of directors is scheduled to meet on February 28, to consider and approve the audited financial statements for the financial year ended December 31 and decide whether to recommend any dividends.
Minor trading led to a significant drop in International Hotel Investments plc’s share price, which slumped by 8.54%, and given the company’s overall large market capitalisation this had a marked negative influence on the whole local index.
There is low trading in HSBC Bank Malta plc, Fimbank plc, and Simonds Farsons Cisk plc, with the latter equity remaining unchanged and the previous two falling by 0.8% and 2% respectively.
Last week Malta International Airport plc (MIA) announced its traffic results for January. Passenger movements for the first month of the year reached 165,969, a 2.2% fall when compared to the same month last year. The number of Italian and French visitors decreased whereas the number of German visitors grew considerably.
No trading occurred in MIA shares during the week.
During the week, Gap Developments plc announced that during December 2011 it repurchased 467,028 of the 7% euro secured conds maturing between 2011 and 2013 from its bondholders. All the bonds bought by the company are being cancelled.
Activity in both the local corporate bond market and the Malta Government Stocks market was subdued, especially following very active trading for the latter over the past few weeks and the €274 million applied for in the new MGS issues.
Price changes in both markets were also minimal, reflecting flat markets abroad. During the week, the European Central Bank left interest rates unchanged, as did the Bank of England’s Monetary Policy Committee, which however also authorised the purchase of a further Stg50 billion of UK gilts.
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.