Equities in the US managed a fourth consecutive week of gains as the Standard and Poor’s 500 index gained another 0.4% as the government announced better than expect-ed payroll growth in February, indicating that the world’s largest economy is in recovery mode.
However, last week was again characterised by market volatility as economic reports from all over the globe, coupled with the long-awaited Greek debt swap, kept investors alert to downside news.
European markets closed the week skewed to the downside as investors took profits and fled risky assets in exchange of safer alternatives, having recovered some of the lost ground by Friday.
Both the US Dollar and the Japanese Yen were primary beneficiaries as the euro declined, notwithstanding the fact that Greece managed to push through the biggest sovereign restructuring in history, and hence open the way for a second rescue package.
Despite the good news from Greece and positive US job figures, investors were less upbeat than one would have expected, but markets had already priced in the good news on Thursday and were still chewing the news that the Chinese economy had slowed more than expected.
Locally, the Malta Stock Exchange (MSE) index recorded another fragile week-on-week gain for the third consecutive week.
The local market managed a 0.05 per cent gain only in the final trading session as Bank of Valletta plc (BoV) and HSBC Bank Malta plc both closed the final session higher by 1.4 per cent. Turnover in both banks reached just over €187,000 while Lombard Bank plc followed with an unusual turnover of €130,000.
Trading activity was spread across 10 companies, but volume in five equities was very low, and some of their prices were very volatile.
Maltapost plc was a case in point, with the postal operator ending the week €0.02 or 2.2% down after one deal of 634 shares was executed. The equity, which was only active mid-week, closed at €0.91, which reflects a year-to-date loss of nine per cent, thus underperforming the overall market, which is down by just under three per cent.
Investors remain unwilling to trade Middlesea Insurance plc shares, as trading volume remained low and unrepresentative of the market as a whole. Two deals of a mere 100 shares were executed at €0.70. As a result the equity shed 1.4%, which worsens further the insurer’s performance since the start to the year and puts it among the worst three performers, as the equity has already shed 12.5%.
In the banking sector, HSBC outperformed the market with a 1.4% or €0.035 gain to close at €2.635. Investors’ interest in the equity returned following weeks of lackluster trading.
Last week 71,300 HSBC shares changed hands in 31 transactions. This is the only financial equity in positive territory so far this year.
Conversely, BoV’s share price failed to move higher as the equity lost nearly one per cent after ending the week at €2.15, following some intra-week volatility. BoV traded between a weekly low of €2.112 and a high of €2.161, while in the final session it settled at the week’s closing price after it seemed to be heading for a much worse performance.
Turnover in Lombard Bank plc last week reached almost €130,000 as 51,000 shares changed hands in seven transactions. The equity’s price barely changed throughout the week, while it closed flat at €2.53. On the other hand, Fimbank plc edged minimally higher to close at $0.75 as two deals of an insignificant 900 shares were traded.
After having managed a minimal gain in the previous trading week, Go plc last week returned to losses, sheding €0.012 or 1.4% to close at €0.838. Trading in the telecoms company took place in the week’s final session, during which 4,790 shares were exchanged in four deals.
Last week the company’s board announced it is scheduled to meet on Friday to consider and approve the company’s audited financial statements for the year ended December 31, 2011, and to consider the declaration of a final dividend.
Malta International Airport plc last week announced its traffic results for February. The company reported that when compared to the same month last year, February saw passenger movements down 3%.
Since the beginning of the year aircraft movements fell 9.6% and seat capacity by 10.2%. Meanwhile the German and UAE markets grew remarkably during the past month.
The announcement had little impact on the equity’s price as MIA closed 0.7% lower at €0.75 as 16,350 shares were traded.
In anticipation of the Plaza Centers plc board of directors’ meeting last Thursday the equity shed almost 3% in one deal of 72,000 shares.
Later in the week the company announced that its profit for 2011 reached €1.3 million which is slightly higher than that of 2010.
The board is recommending for the approval at the annual general meeting, the payment of a final net dividend of €0.0754 per share. The meeting of shareholders is scheduled to be held on May 24.
The other traded equity last week was Simonds Farsons Cisk plc, which traded flat as one deal of a meagre 334 shares was executed at €1.72.
In the fixed-income market trading totalled nearly €27m. In the Government bonds market, yields in general closed the week higher following declines in nearly all active issues.
The long-dated issues where the hardest hit, with the 5.2% MGS 2031 (I) Feb FI heading the list after having closed the week at €101.12, down 1.6% on the week. The running yield on this bond now stands at 5.14%.
On Thursday, the European Central Bank left its benchmark rate at 1% and issued new forecasts showing inflation will average 2.4% this year rather than the 2% projected in December.
ECB president Mario Draghi indicated that the ECB had done enough to battle the sovereign debt crisis, laying the groundwork for an eventual exit from record-low interest rates and emergency lending measures.
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.