Contrary to previous weeks, the Malta Stock Exchange index ended the last week of October on a positive note. It defied the sudden onset of pessimism felt in major markets and outperformed most global equity indices, some of which fell over 5% during the week.
The MSE index closed Friday's session at 3,123.837, or 0.31% higher than the previous week's close, despite experiencing high volatility and hitting a low of 3,084 intra-week. In the equity markets a total of 203,950 shares in nine equities changed hands in 148 deals. Most equities traded last week lost value, with five ending in the red. However, gains by three others helped push the index upwards while one remained unchanged. As expected, the focus of last week's trading were Bank of Valletta plc (BoV) shares, given the release of the bank's annual accounts last Friday after the close of trading on the exchange.
BoV was the most traded equities in value terms. The stock saw its price climb steadily session after session as the date of the release of the bank's annual results for the year which ended September 30 approached. The share price rose nearly 3% on the week to a 2009 high of €3.449, backed by significant volume. A total of 47,237 shares changing ownership in 47 deals. Following last week's increase, BoV shares are now worth nearly 19.3% more than at the beginning of the year - outperforming by far all other equities listed on the local exchange.
On Friday, the BoV board of directors announced a pre-tax profit of €81.8 million for the year ending September 30. This is just over double that of the equivalent period last year.
The board agreed to recommend to shareholders the approval of the payment of a final gross dividend of €0.215 per share and a bonus share issue of one share for every four shares held to be allocated to the bank's registered shareholders as at January 15, 2010.
For most of the week HSBC Bank Malta plc shares traded in the red, fluctuating between a low of €2.66 and a high of €2.75, but in the last two trading sessions they clawed back nearly all the losses, closing only a tad lower at €2.749. A total of 39,652 shares were exchanged in 35 deals, the bulk of which took place on Friday, possibly riding on the feel-good effect triggered by the anticipation of favourable BoV results. However, on a year-to-date basis, HSBC is way behind its main competitor with a minor increase of 1.8%.
Go plc shares continued their upward trend last week following a very negative September. The share price rose 0.62% in Tuesday's session and stayed at this level throughout the week to close at €1.63. Volume stood at a very encouraging 51,484 shares exchanged over 26 deals. Following last week's increase this equity has recouped nearly half of the value lost in September when the price tumbled from €1.80 to €1.50.
Malta International Airport plc shares stumbled into negative territory last week following two very negative sessions on Wednesday and Thursday. Although the share price initially rose from €2.20 to €2.30, it gave up all the gains and retreated to €2.101 on Thursday, to close the week 4.5% lower. However, volume was light with 12,900 shares dealt in 10 deals.
International Hotels Investments plc shares rose to €0.85 on Monday on low volume from the previous week's €0.821 close. However, on Tuesday this increase was immediately nullified, backed by much larger volume. No further trades occurred during the week with the equity closing at €0.82; a minor 0.12% fall.
Fimbank plc shares soared by 3.64% to $1.14 in Monday's trading session, albeit on very limited volume. Further trading throughout the week sustained this higher price. Since September this equity has fallen from $1.295 to $1.10 and this week's upward move may possibly indicate a change in trend.
Global Capital plc and Maltapost plc both experienced hefty losses last week after minimal volume of trading. A deal of just under 1,000 shares caused Global Capital's share price to lose a third of its value from €1.50 to €1. Similarly, a trade of nearly 4,300 shares resulted in Maltapost's share price falling 7% to close the week at €0.651.
On the other hand, a single trade of 1,000 RS2 Software plc shares left their price unchanged from the previous week's close.
A turnaround in the investors' overall sentiment resulted in a fall in major benchmark bond yields, and a boost in safe bond prices. The deterioration in equity markets reignited the rush to safety of government debt. This was mirrored by the local Malta Government Stocks with prices generally on the rise. Almost €777,000 worth of MGS were traded over 43 deals.
On Friday, the Treasury announced the issue of €80 million government bonds (possibly rising to €100m in case of over-subscription) spread over three issues - 3.6% MGS maturing in 2013, 4.6% MGS maturing in 2020 and a floating rate MGS maturing in 2015. Prices of these stocks will be determined next Thursday, with the official opening set for November 9.
Similarly, prices of some corporate bonds traded on the local market rose as yields generally fell. The best performing local bond was the 7% MIDI plc 2016-2018, which gained nearly 1.5%. Last week, over €1 million worth of corporate bonds and nearly €3.1 million worth of Treasury Bills were traded.
On Friday Mizzi Organisation Finance plc announced the issue of an unsecured 6.2% €25 million bond due in 2019 with a nominal value of €100 per bond, with an option to allocate up to an additional €5m bonds if over-subscribed. The bonds' partial or full redemption may take place any time between November 30, 2016 and 2019. The bonds are guaranteed the company and by Mizzi Holdings Ltd, Consolidated Holdings Ltd, Kastell Ltd and General Soft Drinks Company Ltd on a joint and several basis between them.
This article, which was compiled by Jesmond Mizzi, managing director of Jesmond Mizzi Financial Services Ltd (JMFS), does not intend to give investment advice and the contents therein should not be construed as such. JMFS is licensed to conduct investment services by the MFSA. 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 JMFS at 67/3, South Street, Valletta, Tel: 2122 4410 or e-mail jmizzi@jmfs.net.