Most equities’ prices fell further in last week’s trading on the Malta Stock Exchange. The trend on the MSE index remains steadily down, with barely any pause or hesitation.
Last week the index edged a further 1.32% lower to close at 3,083.321, progressively approaching the 3,000 mark. The year had started with the index at 3,781.237, or 18.5% higher.
However, volatility on the MSE was low last week, as most stock prices simply slid gradually lower session after session. Volume was moderately on the high side, with trading was very heavily skewed towards financial stocks, with the two major banks taking up nearly 85% of the total value of trading in equities.
Ten equities were traded, six of which lost value, two remained unchanged and two stocks managed to close in positive territory.
Trading was very similar to the previous two weeks, with heavy volume generally concentrated in Malta Government Stocks. This indicates continued preference for stable and safer assets.
Abroad, the situation was somewhat murky, as intra-week, equity markets gained slightly in value, breaking the hefty downward trend experienced lately. However, nervousness remained high given the resumption of the falls particularly in European equity markets, and the mid-week break seemed more like the eye of a storm rather than an indication that the worse is over.
During the week, Bank of Valletta plc (BoV) took the lion’s share of trading, with nearly 115,000 out of the total weekly 240,000 shares concentrated in this stock.
The share price continued to decline, particularly on Tuesday when it fell nearly 1.7% in a single session. As the week progressed the declines moderated considerably, with the share price actually rising marginally in Friday’s session.
Overall, however, the week ended in negative territory with the share price closing at €2.51. This stock’s unstoppable downward trend has seen it shed nearly 22% over the past eight months. With last week’s decline BoV has entered what in investor terminology is referred to as a bear market, that is, a period of accumulated sustained falls of 20% or more.
Trading in HSBC Bank Malta plc was somewhat more subdued than its major counterpart, with half the volume traded and a slightly lower fall in value. The share price slipped 1.85% from €2.70 to €2.65 by Friday, which represents a new low for the year.
A total of 20,100 International Hotel Investments plc shares were traded last week, with the share price edging lower by 2.67%. On the other hand, similar volume levels saw RS2 Software plc shares remain unchanged throughout the week at €0.55.
There was low level in trading in both Lombard Bank plc and Maltapost plc, each trading nearly 11,000 shares, with Maltapost shedding 2.02% and Lombard closing 0.74% lower.
Last week, Lombard published its interim financial statements for the six months ending June 30. The group’s pre-tax profit for the period rose to €7 million, a 3.6% increase.
The directors believe that with the bank’s strong financial fundamentals, healthy capital adequacy and loan-to-deposit ratios, it is well placed to weather the current worldwide financial and economic turmoil.
They added that given the continued international challenges, the bank’s main objective is that of protecting its strong financial basis rather than seek short-term gain in operational performance.
Minimal trading saw Go plc improve modestly by 0.8% while Midi plc shares succumbed to selling pressure, closing the week 2.27% lower at €0.43.
Global Capital plc shares remained unchanged at €0.50 while Malta International Airport plc shares ballooned by 5.33%. However, trading in both these stocks was negligible.
In its half-yearly report, Global Capital plc reported a net loss after tax of €1.6m for the six months ended June 30, compared with a €1.4m loss for the same period last year. The directors said that performance was mainly impacted by the downturn in the capital markets, and are not recommending the payment of an interim dividend.
Trading in local corporate bonds was very similar to previous weeks both in volume and value terms. However, given some encouraging intra-week geopolitical news from Libya, the prices of three Mediterranean Investment Holding plc (MIH) bonds soared. The best-performing bond was the 7.5% MIH bond maturing in 2015 which shot up nearly 19% higher from €80 previously to Friday’s closing of €95.
Last week, Bay Street Finance plc presented the company’s unaudited interim financial statements for the period ending June 30. The company registered a pre-tax loss of €4,791. The directors do not foresee significant changes in the performance during the last six months of 2011.
Premier Capital plc also issued its six-monthly interim report for the period ending June 30. Group revenue for the period rose from €23.6m in 2010 to €28.2m in 2011.Meanwhile, pre-tax profit also rose, from a pre-tax loss of €471,128 in 2010, to a pre-tax profit of €3.73m in 2011. This is after accounting for investment income of €4.69m and finance costs and other expenses in relation to the group’s recent investment in Greece.
Local Government Stock markets mimicked foreign markets, ending the week somewhat mixed and directionless. However, trading volume was heavy, and trading value surpassed €36m.
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. Mr Mizzi is a non-executive director of Premier Capital plc. For further information contact Atlas JMFS at 67/3, South Street, Valletta, or on Tel: 2122 4410 or e-mail jesmond.mizzi@atlasjmfs.com.