The MSE Equity Price Index dropped by 1.6% to 4,326.872 points on Tuesday, driven by the significant decline in the share price of BOV which offset the further gains in MIA. Trading volumes improved further from Monday as they reached a near four-week high of €0.71 million, largely on the back of heightened activity in PG.
Tuesday's main event on the local equity market was the publication of the interim results by Bank of Valletta plc. Overall, these showed a marked improvement in the bank’s operational profitability. However, the results were significantly dented by a €75 million impairment provision, mostly attributable to the litigation related to the Deiulemar case whereby the bank is being sued for €363 million. Despite this material provision, BOV still reported a net profit of €12.6 million. However, the bank’s Board of Directors decided not to declare an interim dividend and also disclosed that it does not intend to recommend a final cash dividend for the current financial year ending December 31, 2018. Following Tuesday's developments, the share price of BOV slumped to a multi-year low of €1.50 before marginally rebounding to close today’s session 9.1% lower at the €1.54 level on volumes totalling 100,718 shares.
In contrast, positive sentiment towards Malta International Airport plc continued as the equity added a further 2.9% to reach yet another record high of €5.40 across 12,565 shares. Last Thursday, MIA issued revised financial targets as well as traffic projections for 2018. The company is now expecting passenger movements to grow by 13% to reach yet another record of 6.77 million passenger movements. This should translate into increased profitability for the airport operator, with EBITDA now anticipated to exceed €53 million (+9.1% over 2017) and net profits of €29 million representing a 20% increase over last year. Shareholders as at close of trading on August 20, 2018 are entitled to receive a net interim dividend of €0.03 per share.
Meanwhile, PG plc retained its near four-month high of €1.34 on strong volumes totalling 275,200 shares. PG should be publishing its financial statements covering the financial year ended April 30, 2018 by the end of August.
The equities of three property related companies traded unchanged. Malita Investments plc maintained the €0.87 level on volumes of 106,172 shares, Plaza Centres plc traded at €1.04 across 20,000 shares and Trident Estates plc held on to the €1.32 level on weak volumes of 2,661 shares.
Likewise, Simonds Farsons Cisk plc and HSBC Bank Malta plc closed Tuesday's session unchanged at €7.40 and €1.87 respectively across insignificant volumes.
The RF MGS Index extended Monday's decline by a further 0.15% to an over six-week low of 1,097.309 points, as the recent rise in eurozone sovereign yields was further supported by the issuance of encouraging economic data. This mainly included positive French, Italian and euro-wide inflationary data, as well as a strong rebound in German retail sales.
On the other hand, preliminary data showed that the euro economy grew by a slightly less-than-expected 2.1% (on an annualised basis) in Q2 2018 compared to a growth of 2.5% in the previous quarter. However, the unemployment rate remained at its lowest level in more than nine years of 8.3%. Meanwhile, during its monetary policy meeting concluded today, the Bank of Japan pledged to keep interest rates low for an extended period.
Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results.