The MSE Equity Total Return Index broke its four-week positive run with a 0.261 per cent drop, to close at 8,923.931 points. In the equities market, there were 22 active securities last week, as the positive performance of nine equities, was outweighed by seven negative movers.
Activity in the equity market was impressive, as €5.9 million worth of shares traded over 481 deals. This was more than double the previous week’s sizeable figure of €2.7 million.
Such high levels of investor participation were somewhat ex-pected, since last week was characterised by the commencement of trading in the shares BMIT Technologies plc. This equity alone was responsible for over three quarters of the total generated turnover, as more than 2.4 million shares were exchanged over 237 transactions during its first week of trading.
The equity reached an intra-day high of €0.58 on Monday, shortly after it started trading. For the remainder of the week, the share price oscillated between a low of €0.53 and a high of €0.58, ultimately settling 9.18 per cent higher than the issue price of €0.49, at €0.535.
The banking industry was a major drag on the index, led by HSBC Bank Malta plc which sank 6.43 per cent to €1.60, as 109,332 shares changed hands over 27 deals. The negative performance was likely a market reaction to the publication of the annual results for the year ending December 31, 2018, which was mainly dominated by the final phase of the bank’s de-risking strategy, as well as the ongoing impact of negative interest rates.
As a result of these two factors, profit before tax was 23 per cent lower than the previous year, as it amounted to €38.6 million.
Adjusted profit before tax, which excludes the impact of one-off, notable items, totals €36.5 million, 34 per cent lower than 2017.
Net interest income of the bank decreased by 10 per cent to €108.6 million, mainly due to the reduction in the corporate loan book and margin contraction in the bonds portfolio. The bank’s excess liquidity once again resulted in an additional interest expense, due to the ECB, unchanged negative deposit rate.
Meanwhile, non-interest income was more or less in line with 2017.
Operating expenses were 5 per cent lower than the previous year to €108.4, mainly due to the €7.6 million collective agreement provision which was charged in 2017.
Earnings per share were down from 8.6 cents in 2017 to 8.0 cents in 2018. The bank’s capital base remained strong and compliant with regulatory capital requirements, with an improvement in the CET 1 ratio from 13.9 per cent to 14.6 per cent
The board is recommending a net final dividend of €0.012 per share, translating to a dividend pay-out ratio of 47 per cent for the full year.
Bank of Valletta plc followed suit, with a more modest loss of 0.79 per cent, to close at €1.25.
A total of 222,527 shares changed ownership across 36 transactions. The bank announced that its board is scheduled to meet on March 15 to consider and approve the group’s, and the bank’s audited financial statements for 2018.
The company also announced that its Annual General Meeting shall be held on May 9.
In the same sector, FIMBank plc also traded rather heavily, as 268,660 shares were exchanged over eight deals. The share price however, closed at $0.70.
Telecommunications company, GO plc, continued to gain ground, extending its positive run to five straight weeks.
The share price added 2.29 per cent to reach €4.46, the highest closing price in over 12 and a half years. Trading volume amounted to 86,180 shares over 29 deals.
The banking industry was a major drag on the index, led by HSBC
Similarly, International Hotel Investments plc also continued on a positive trend, gaining 2.33 per cent to reach €0.66. In total, 21 trades of a combined 290,532 shares were concluded.
Last Wednesday, Malta International Airport plc published its financial results for 2018, reporting a substantial increase in profits of 25.2 per cent, from €24.2 million to €30.3 million. This was driven by an 11.9 per cent upturn in revenues when compared to 2017, from €82.4 million to €92.2 million.
In terms of trading, the share price put on 0.78 per cent to close at €6.45. Trading activity was very high, particularly in the aftermath of the announcement, as a turnover of €1.5 million was generated across 22 deals.
The gain registered by MaltaPost plc during the previous week proved unsustainable, as the equity plunged 4.69 per cent to close at €1.22. Trading volume amounted to 16,855 shares across nine deals.
RS2 Software plc followed suit with a 4.11 per cent loss in value, to €1.40. This was the outcome of four deals of 19,445 shares.
Conversely, in the food and beverage sector, Simonds Farsons Cisk plc appreciated by 4.79 per cent, reaching a five-week high of €8.75, as a total of four deals of a combined 5,700 shares were executed.
In the insurance sector, Mapfre Middlesea plc closed unchanged at €2.00, despite generating a turnover of €11,438.
Grand Harbour Marina plc topped the list of gainers with a 14.75 per cent hike to a price of €0.70, over three deals of 14,000 shares.
On the other hand, Loqus Holdings plc was the worst performer with a 10.53 per cent price drop to €0.085. A couple of transactions of 35,500 shares were executed.
The company announced that the directors are set to meet on February 28 to consider and approve the half-yearly report of the company for the six months ended December 31, 2018.
Retail conglomerate, PG plc posted further gains, as it climbed a marginal 0.73 per cent to €1.38. A total of 144,247 shares traded over 15 transactions.
Meanwhile, 14 transactions of 87,700 Medserv plc shares did not have an impact on the closing price of €1.10.
Performances in the property sector were somewhat mixed, as gainers and fallers amounted to two a-piece. Plaza Centres plc logged the largest gain in the sector as it climbed 3 per cent to €1.03. A combined 75,031 shares traded across ten transactions.
Malita Investments plc recovered the previous week’s fall, with a 2.22 per cent price increase to €0.92. This was the result of four trades of 22,240 shares.
Conversely, Tigne Mall plc erased its previous weekly gain, as it closed 2.11 per cent lower at €0.93. Three deals of 12,650 shares were struck.
The worst performing property equity however, was Malta Properties plc, as it declined 3.57 per cent to settle at €0.54. A total of 129,117 shares changed ownership over eight deals.
In the same sector, Trident Estates plc and Main Street Complex plc both closed unchanged on unimpressive volumes, at €1.35 and €0.63 respectively.
MIDI Investments plc traded ten times, as 102,920 shares were exchanged. However, the share price closed unchanged at €0.65.
Yields in the sovereign debt market were lower this week, as from the 20 active issues, 15 headed north and five short-term issues lost ground. Turnover was much higher than the previous figure of €2.4 million, as €9.4 million was generated. The bulk of the gains were recorded among the longer- term issues, with the 2.4% MGS 2041(I) posting the largest gain of 0.48 per cent to close at €109.52.
In the corporate debt market, 37 securities were active, 16 of which traded higher while another 12 headed lower. Turnover was in line with the previous week at €2.3 million. The highest performer was the 5.1% 1923 Investments plc Unsecured € 2024, which recovered nearly all of the previous week’s loss, as it gained 1.56 per cent to close at €104.35.
This article, compiled by Jesmond Mizzi Financial Advisors Limited, 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 is 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 Financial Advisors Limited at 67, Level 3, South Street, Valletta, or on Tel: 21224410, or email info@jesmondmizzi.com.