Following several weeks of losses, last week’s gains on the Malta Stock Exchange were a welcome change. The MSE index climbed up 1.16% to end the holiday-shortened week at 3,114.572.

The tepid recovery came following improvement in the main financials’ stocks- Jesmond Mizzi

For the time being, the local equity index is still not indicating what is usually referred to as a ‘bear-market’. This term is normally used to describe a market that has lost 20% or more of its value.

Since the start of the year, and following last week’s improvement, 17.63% of the MSE’s value has been erased. However, it is worth noting that last week’s climb was only backed by skimpy trading volume.

Trading dried up considerably last week, with little more than 81,000 shares in total being exchanged. Indeed, this weekly volume of trading was among the lowest this year.

Part of the reason for this low activity was undoubtedly the intra-week public holiday. However, one could also point towards a certain lack of direction both from a local and foreign market perspective.

Global markets still showed signs of uneasiness, and were generally negative. Investors continued to expect policy changes and key actions which, however, either failed to materialise or lacked conviction.

The tepid recovery on the local market came about following improvement in the main financials’ stocks, which also accounted for two-thirds of total trading.

Nearly 32,000 Bank of Valletta plc shares were exchanged over the four trading sessions, a far cry from trading during previous weeks and months. The share price advanced moderately in every trading session with the share price climbing from the previous week’s €2.52 to end last week at €2.59; a 2.8% weekly increase.

HSBC Bank Malta plc’s share price initially performed very similarly to its major counterpart yet saw a minor correction in Friday’s session. Trading was generally low, totalling nearly 23,000 shares in all. The share price fluctuated between €2.67 and €2.73, and ended the week 1.12% higher at €2.70.

Malta International Airport plc (MIA) continued with its erratic performance as over the past month or so, with its shares climbing 1.32% to end the week at €1.54. Trading volume totalled a moderate 13,370 shares.

Last week MIA announced details of its traffic results for August. Passenger movements last month almost reached the all-time monthly record of last year. The results for the first eight months of the year, in terms of passenger movements, show an increase of 8.5% over the same period last year.

Lombard Bank plc gained in value again last week, improving by 0.75% as it climbed from €2.68 to €2.70 following a slight drop on Tuesday. However, volume of trading was an uninspiring 11,400 shares.

There were minimal volumes of trading in the remaining equities on the MSE last week. Island Hotels Group plc ended the week 5.3% higher while Middlesea Insurance plc improved by 1.2%.

Simonds Farsons Cisk plc was the only equity to lose value last week, shedding 0.3%, while Fimbank plc ended the week unchanged at $0.77 after some absence from the trading board.

Trading in local corporate bonds was, unlike the equity market, quite steady throughout the week, with the total value of trading reaching nearly €650,000.

A sizeable amount of trading occurred in the 7% Gap Developments plc euro bond maturing between 2011 and 2013 whose price rose to a yearly high of €100. Similarly, improvements were also reported in two Mediterranean Investment Holding plc (MIH) bonds; namely the 7.5% MIH maturing in 2015 denominated in euro, and the 7.15% MIH maturing between 2015 and 2017 denominated in sterling.

Trading in Malta Government Stock was somewhat lower than in previous weeks. A total a value of €5.1 million was traded during the week’s four trading sessions with a focus on the 5.25% MGS 2030 issue, which closed the week at €103.29.

Following the downgrade of Malta’s credit rating last week, the prices of most MGSs fell suddenly.

However, as the week progressed, risk aversion on an international scale resurfaced and benchmark government prices continued to soar higher upon renewed demand for safer investments.

Hence, local MGSs recovered their decline to end the week in positive territory and close to yearly highs, indicating that local investors still consider such assets as, generally speaking, ‘safer’ instruments where to park their money in uncertain times.

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.