Following a choppy, holiday-shortened week, the Malta Stock Exchange index slid further into negative territory. The local stock exchange lost 0.27% by the end of the week, which was characterised by mixed moderate price movements.
This subdued, negative outcome in the local market contrasts with the healthy week-long rally enjoyed by most equity indices abroad which saw a sudden positive turnaround at the start of the month.
Notwithstanding the shorter trading week, the volume of shares exchanged was substantial, reaching nearly 400,000 shares, as interest seemed to return in the two major financial institutions and Fimbank plc. A total of 11 equities were traded last week, six of which closed in the red, three equities increased in value, while two remained unchanged.
Following several weeks of lower activity, nearly 144,000 Fimbank plc shares in were exchanged over two days, particularly on Monday. The share price spiralled down, sustaining its negative trend since early March. It closed the week at $0.97, reaching an accumulated year-to-date loss of nearly 12%.
International Hotel Investments plc shares were traded throughout last week’s sessions with the total volume reaching nearly 60,000 shares. Initially, the share price plunged to €0.80 – a price which has often acted as a floor for this equity for several months. Sizeable volume immediately bid the price back up to €0.83, but the equity failed to recoup all the losses and ended the week with a moderate 1.19% loss.
A total of 51,237 HSBC Bank Malta plc shares were exchanged last week. Having hit the low of €2.80 following a hefty fall, the share price crawled up €0.04 to reach €2.84 at which it closed Friday’s session.
On the other hand, Bank of Valletta plc ended the week unchanged at €3.20. Any attempt to raise or lower the price were immediately nullified as buyers and sellers fought for direction backed by similar volume levels. Nearly 43,000 BoV shares were traded last week. Although this volume is still considered as generally low for such an equity, it was high compared to previous weeks.
Malta International Airport plc shares spent the whole week showing moderate weakness, with the price falling in every session. By Friday, the equity price had reached €1.55, nearly 2% lower after 27,400 shares were traded in nine deals. Notwithstanding last week’s slide, MIA is still the second best performing equity on the MSE, with a year-to-date gain of well over 29%.
On Monday, a total of 25,000 Maltapost plc equities were transacted at €0.001 lower than the previous week’s closing price of €0.899, hence once again unable to break through the psychological ceiling of €0.90.
A deal involving 22,000 Crimsonwing plc shares executed on Monday resulted in a jump in the equity’s share price, which closed the week 5% higher at €0.42. However, trading in this equity continues to be sporadic and irregular.
Middlesea Insurance plc was the worst performing equity last week, with its share price plunging 4.76% by Friday to close at €1, its pre-summer level. Unlike the previous week, trading volume fell to 16,192 shares, possibly indicating a slowing of selling pressure.
There was negligible trading in Go plc, Plaza Centres plc and Lombard Bank plc, with Go ending the week up 1.07%, Lombard shedding a minimal 0.72%, and Plaza remaining unchanged.
Local corporate bond trading was noticeably lighter last week with a total value barely surpassing €365,000. Bond price movements were fairly subdued except for the 4% AX Investments plc bond maturing in 2013, whose price soared 2.48% to reach €124.
On the other hand, local investors remain focused on Malta Government Stock, with the total value of trading reaching nearly €3.5 million despite volumes falling from the previous week’s level of €15m.
The fall in MGS trading could be a reaction to last week’s tentative listing calendar issued by the MSE for the last quarter of 2010. Indicatively, two bonds amounting to €55m and an equity of €50m will be offered in October. In November, there will be an MGS issue of €70m and another equity is likely to be offered, amounting to €30m.
Last week the bulk of the trading remains in the newly-issued 5.25% MGS maturing in 2030, with trading reaching the €1m mark. Following the previous week’s sudden correction, last week’s action was fairly muddled, with some MGSs still adjusting to the corrected levels while others renewing their upward trend following what could have been too much of a sudden or excessive drop the week before.
However, benchmark German bund yields continue to point north as investors accept more risk, and shift from safe government bonds into equity markets, hence pushing down global government bond prices. These benchmark yields had reached all-time lows towards the end of August, only to be steadily revised upwards in the first two weeks of September.
Just over €4m worth of Treasury bills were traded last week.
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.