The local stock market continues to move against the trend, but this time round, the Malta Stock Exchange index registered a marginal gain while foreign markets moved down.
Last week a series of weak economic data hit global equity markets, as fragile economic news concerning the eurozone suggest that Europe might be heading for a recession. Asian markets were among the hardest hit as Chinese manufacturing figures heightened fears that the Chinese economy was headed for a hard landing.
Despite a further fall in US jobless claims coupled with positive comments from European Central Bank president Mario Draghi that Europe is now stabilising, this still failed to meaningfully improve sentiment amid investors’ concerns over global growth.
Markets regained some lost ground late on Friday but in the US the Standard and Poor’s 500 index fell 0.5%, the biggest weekly drop of the year, while the Dow Jones Industrial Average fell by justover 1%.
Likewise in Europe, the leading indices also experienced their worst week so far this year with the Xetra Dax index in Frankfurt and the CAC 40 in Paris both ending the week down around 3%, while the FTSE 100 in London lost 2%.
On a brighter note, the Malta Stock Exchange (MSE) index, which was active last week for only four trading session due to the public holiday on Monday, rose 0.4%as five equities registered gains while two banking equities closed lower.
HSBC Bank Malta plc (HSBC) lost most value with a sharp 1.9% decline, while Go plc shares moved higher by 5.3% following the previous week’s hefty 9% fall. Fimbank plc shares were once again the most liquid while activity in Malta International Airport plc shares surged as the equity announced positive results for 2011.
Go plc managed to move higher after weeks of continuous declines. The equity recorded a €0.04 or 5.3% gain on improved volumes, to close at €0.80. Over 42,500 shares were traded in 19 deals.
Despite last week’s recovery the equity is still down 18% so far this year and is thus underperforming compared to the broad market.
In the banking sector, Bank of Valletta plc (BoV) shares rose by a significant 2.8%, or €0.06, closing the week at €2.22. BoV has experienced unusual price volatility since the beginning of the month. During March the equity traded at a low of €2.112, while it then crawled higher during the past two weeks. Last week the equity traded between a low of €2.165 and a high of €2.235 over 37 transactions of 88,000 shares.
Its largest counterpart, HSBC, once again closed in the red. Last week, the equity shed nearly 2% or €0.048, to close at €2.502. However, trading volume was not representative of the whole market as just over 10,000 HSBC shares were traded, down from 143,000 shares traded the previous week.
In the same sector, two thin trades of 810 shares in Lombard Bank plc led the share price to fall almost 1%, or €0.02, thus ending the week at a new year-to-date lowof €2.50.
Conversely, Middlesea Insurance plc moved 1.5% higher to end the week at €0.70. The equity is still recovering from a year-to date loss of 12.5%.
Upbeat sentiment towards Malta International Airport plc (MIA) shares helped the equity gain 1.25% on the week to reach the €1.70 price level.
During the mid-week session, MIA closed minimally lower on insignificant volume, but on Thursday, prior to the publication of MIA’s results for the year ended December 31, 2011, investors expecting positive annual results queued in to buy the company’s shares.
MIA did not disappoint, and during the last two trading sessions the equity rose to a weekly high of €1.71. The airport operator recorded an 11% increase in net profit and was just short of the €12 million mark.
Passenger movements for 2011 reached a record 3.5m passengers, which in turn resulted in a 2% rise in revenue, which reached €52.4m.
The board of directors resolved to propose a gross dividend of €0.061538 per share to registered shareholders as at the close of business on April 10. MIA’s annual general meeting is scheduled for May 10.
Last week MIA was the third most traded equity with 65,000 shares changing hands in 26 deals.
Medserv plc also reported its annual results for 2011. The group reported a fall in revenue from €11.7m in 2010 to €9.2m in 2011. But the company achieved an operating profit of €1.5m before charging for depreciation. After depreciation, net finance costs and a share of loss of the jointly-controlled entity, amounting to €398,167, €86,379 and €3,228 respectively, the group registered a pre-tax profit of just over €1m. Profit after tax was €816,594.
The board of directors is proposing a net dividend of €0.03 for the approval of shareholders at the annual general meeting. Despite these positive results, investors were nowhere to be seen as the equity once again failed to trade. It has not traded for over two months.
In the fixed-income market, government bond yields once again closed higher as security prices closed generally lower, notwithstanding an increase in turnover of trade from €10.2m the previous week to over €21.7mlast week.
In the corporate bonds market turnover of trade fell to €0.4m spread over 57 deals. On Thursday, Corinthia Finance plc announced that its recent bond issue, which matures between 2019 and 2022 and carries a coupon of 6%, was oversubscribed. The company announced it would satisfy in full all applications for the amounts of up to €40,000. On the other hand, applications in excess of this amount will be allocated a further 4.95% of the remaining balance together with the first €40,000.
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 there in 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.