Global equity markets last week rallied sharply, with the Standard and Poor’s 500 index in the US up 2.2 per cent, its biggest gain in two months. It closed the week within one per cent of a record high set in October 2007, as data showed US employers added more jobs than forecast last month and the unemployment rate unexpectedly dropped. Likewise, the US Dow Jones Industrial Average reached an all-time high.
US employment rose 236,000 last month while economists had forecast a rise of 165,000, after a revised 119,000 gain in January that was smaller than first estimated. The jobless rate also dropped to 7.7 per cent.
Elsewhere, gains ranged from 5.8 per cent by the Nikkei 225 in Japan, while in Europe, the CAC 40 in Paris and the Xetra Dax in Frankfurt both gained over 3.6 per cent on the week.
Locally, the Malta Stock Exchange (MSE) index started the first week of March in positive territory with a 0.6 per cent gain to end the week at 3,324.122 points. The MSE index closed higher for the fourth consecutive week but at a slower pace than a week earlier. On Monday, it closed at a 21-month high after a significant rise in the share prices of the two major banks.
Last week, trading volume was not considerable, and as the week unfolded both Bank of Valletta plc (BOV) and HSBC Bank Malta plc failed to find further support. Given their significant market capitalisation, both equities dictated the performance of the broad index, and as HSBC’s share price fell the index shed some of its previous gains in the two sessions which followed.
However, on Thursday, the MSE returned to positive territory as HSBC gained, but on Friday the index once again traded marginally lower as the BOV’s share price of failed to hold onto its earlier gain.
All in all, the week proved to be a positive one for financials as nearly all gained, except for Fimbank plc, which closed flat. On the downside, Malita Investments plc and Grand Harbour Marina plc similarly fell while Go plc shares closed the week minimally lower.
In terms of value a total of €1.2 million was traded, down from €1.6m a week earlier, as 16 equities were active in 170 deals. BOV was the most active equity in value terms while Malta International Airport plc followed as demand for the equity remained strong.
Meanwhile, in fixed-income market, Government bond yields across various short-dated issues improved as bond prices fell, while on the other side of the maturity ladder, prices improved. The 4.8 per cent MGS 2028 gained 66 basis points while the 5.1 per cent MGS 2029 gained 0.6 per cent and closed the week at €107.11. A total of 93 deals worth €16m were executed in Malta Government Stocks.
Back to the equity market, Middlesea Insurance plc soared by 14 per cent to reach €0.90 after the positive results announced a week earlier. The company had announced that a final gross dividend of €0.025 per share will be paid on May 17. The equity’s share price spiked on Monday over 13,700 shares while it closed unchanged in the following sessions over thin trading. Following last week’s gain the equity has rallied by 21.6 per cent.
In the banking sector, Lombard Bank plc shares rose 1.3 per cent, or €0.025, to end the week at €1.915, a level last reached in mid-January. Over 48,000 shares were traded in six deals. Meanwhile, BOV closed with a 0.3 per cent gain to end the week at €2.285 after having traded at a weekly high of €2.30. At this level the equity found support as demand improved, but as demand sharply fell the equity lost almost 0.7 per cent in Friday’s session.
On a similar note, HSBC shares gained 0.4 per cent to end the week at €2.75 after fluctuating between a weekly low of €2.72 and a high of €2.80. The positive results posted on Monday lifted the share price by nearly two per cent in the opening session, but demand was weak and not representative of the broader market, and as a result the share price fell as liquidity remained poor. After two days of decline the equity turned positive on Thursday while no further trades were recorded in the final trading session.
Last Monday, the bank announced an eight per cent rise in pre-tax profits for 2012, with the life assurance business cited as the main contributor, together with several cost-saving measures undertaken by the bank. A final gross dividend of €0.079 (€0.051 net per share) will be paid on April 27, to registered shareholders as at March 19, subject to approval at the annual general meeting to be held on April 18.
Likewise, Fimbank plc announced that its annual general meeting is scheduled for May 2.
The bank also announced its annual results for the year ended December 31, 2012. The group reported that pre-tax profit rose by 6.8 per cent to $8.8 million. The directors also recommended for the approval of the AGM a final net dividend of $0.0369 to be paid on May 16.
On a negative note, Go plc shares lost 0.4 per cent to close the week at €1.399 as eight transactions worth €15,500 were executed. Meanwhile, in the IT sector, 6PM Holdings plc gained 4.7 per cent to end the week at £0.45 while both RS2 Software plc and Crimsonwing plc closed unchanged at €0.90 and €0.54 respectively.
MIA shares managed to close flat at €1.81 after trading at a weekly low of €1.785 early in the week. But the equity returned to the previous week’s close as demand remained strong, yet lower than that a week earlier. A total of 109,000 shares were traded.
On the downside, Malita Investments plc shares fell by nearly four per cent to €0.51 while thin trading in Grand Harbour Marina plc sent the equity 3.5 per cent lower to €1.91 after closing at €1.98 the previous week.
On the other hand, Midi plc shares, the most liquid in terms of volume, continued to rise, this time by five per cent to end the week at €0.315. A total of 512,300 shares were traded in 21 transactions.
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 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 Tel: 2122 4410 or e-mail jesmond.mizzi@jesmondmizzi.com.