The Malta Stock Exchange (MSE) index ended the week with its highest week-on-week gain since December 2012, when it increased 1.4 per cent to close a few points shy of 3,500 points. Local equities have now gained an average of nine per cent year-to-date.
After a 0.4 per cent fall the previous week, sentiment on the MSE improved as all active banking equities headed higher. The upbeat mood appeared to spread to other equities as nine issues gained while the prices of Go plc and Malta International Airport plc (MIA) shares fell.
Trading volume fell marginally on the week as nearly 550,000 shares were traded in 136 deals worth €800,000. Out of 13 active equities, Crimsonwing plc was the most active followed by Bank of Valletta plc (BOV) and RS2 Software plc.
BOV shares registered the highest gain in the banking sector with a three per cent, or €0.07. The equity’s price now stands at €2.39. After a quiet start to the week, BOV shares moved higher in the last three sessions as demand for the equity was rose mid-week, only to fall again on Friday. A total of almost 74,000 shares were traded in 37 transactions.
Similarly, HSBC Bank Malta plc rose 1.8 per cent as the equity ended the week at €2.749 after trading at a weekly low of €2.70, as trading volume increased to 46,500 shares.
In Monday’s trading session the bank announced its interim financial results. Group profit before tax stood at €53 million for the six months ending June 30, slightly below that registered during the same period last year.
The board of directors declared the payment of an interim gross dividend of €0.10 per share to be paid on September 5 to all registered shareholders on Friday.
Initially, investors reacted positively to the results but on Tuesday the bank’s share price fell to a weekly low of €2.70. Thereafter, the equity returned in positive territory but with no significant increase in demand.
The bank’s net interest income fell six per cent to €63 million due to lower yields on reinvestments compared to maturing bonds and lower average lending balances. Meanwhile, profit before tax for the Life Assurance arm increased to €8 million compared with €7 million in the first half of 2012.
With regard to loan impairments, no material events were reported in the period, and non-performing loans remained stable. Net loans and advances to customers fell by €18 million since December 31, 2012; likewise, customer deposits were €70 million lower than the year-end figures.
The bank’s liquidity position remains strong at 75 per cent.
Both Lombard Bank plc and Fimbank plc moved in line with their larger peers as the former gained 2.7 per cent, or €0.05, to close the week at €1.90 while Fimbank plc gained one per cent to end the week at $1 and is up 25 per cent since January.
In the IT sector, Crimsonwing plc shares gained another 5.8 per cent, or €0.04, to close the week at €0.73. Demand for the equity remained high as 200,000 shares were traded in 12 deals worth €150,000. Likewise, RS2 Software plc gained almost four per cent, or €0.05, to close at €1.35.
Meanwhile, no transactions were recorded in 6PM Holdings plc, which on Friday announced its interim financial statements for the period ending June 30. The group’s revenue rose 16 per cent to £4.5 million while net profit stood at £249,583, up from £184,884 last year.
The board of directors recommended that no interim dividend be paid as the company expects it will use a significant amount of cash when it moves to its new premises.
However, the company said that if it maintains these positive results in the coming months, the board aims to deliver a final dividend.
On the downside, Go plc shares shed 1.8 per cent to €1.62 as lack of demand forced sellers to accept lower bids. In fact, just over 12,000 shares changed hands in eight transactions. Last week, the company announced that the board of directors is due to meet on Tuesday to discuss the group’s interim unaudited financial statements for the six-month period ending June 30.
MIA shares fell two per cent and the equity’s price now stands at the €2. A total of 16 transactions worth €100,000 were executed. The company announced that passenger movements at the airport in July rose by almost 5.8 per cent while aircraft movement increased 7.7 per cent over the same period last year. There were increases in all core markets in July, with Italy, Spain and Germany showing the highest gains.
Over the past seven months, passenger movements rose 8.4 per cent over the corresponding period last year as passenger movements totalled 2.2 million.
Mid-week, the airport operator announced its half-year results for the period ending June 30. Pre-tax profit rose 14 per cent to €8 million while revenue jumped to €25 million, up from €22.7 million in the same period last year.
Furthermore, the company proposed a gross dividend of €0.046, to be paid on September 23 to all registered shareholders on August 19.
On a positive note, Malita Investments plc gained two per cent last week as it closed at €0.52 while thin trading in Maltapost plc sent the equity’s price one per cent higher. Similarly, Simonds Farsons Cisk plc gained 1.8 per cent to end the week at €2.80.
In the fixed-income market, yields across Malta Government Securities generally improved as prices moved lower. In fact, the 5.1 per cent MGS 2029 lost 0.33 per cent and the 4.25% per cent MGS 2017 shed 22 basis points.
There were exceptions among the long-dated issues as the 4.5 per cent MGS 2028 gained 45 basis points and the 5.25 per cent MGS 2030 posted a 0.36 per cent gain.
This article, which was compiled by Jesmond Mizzi, managing director of Jesmond Mizzi Financial Advisors Ltd, does not intend to give investment advice and the contents therein should not be construed as such. The company is licensed to conduct investment services by the MFSA and is a member of the Malta Stock Exchange and a member of the Atlas Group. 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 Jesmond Mizzi at 67, Level 3, South Street, Valletta, or on 2122 4410 or e-mail jesmond.mizzi@jesmondmizzi.com.