Local equities climbed for the third consecutive day yesterday helping the MSE Index gain a further 0.59 per cent to close the day at the 5,045 mark. Buying activity was strong across the board with the major banks providing the lift to the index.

Crimsonwing was the star performer of the day as the equity traded for its first time following its successful initial public offer in December 2007 and its official listing on the Malta Stock Exchange last Friday. The first trade was struck at the €0.585 level and later touched €0.62 before settling to close at the €0.60 level which represents a 20 per cent premium to its IPO price. The day's activity was particularly robust with a grand total of 86,675 shares changing hands across 15 transactions.

HSBC Bank Malta moved higher by 5c or one per cent as 22,010 shares were purchased up to the €4.90 level. Fresh funds have been pouring into the equity of the largest capitalised company on the exchange in anticipation of their full year results and the declaration of the final dividend.

Buying activity was also witnessed in Bank of Valletta as 9,043 shares were collected off the offer side across 19 trades. As a result the equity gained 2c6 or 0.3 per cent to close yesterday's session at €8.24,6, leaving demand for 142 shares at €8.21,4 against supply of a further 10,849 shares at the day's closing level.

FIMBank recouped most of its previous session's decline as a single purchase order for 27,000 shares were executed in rapid succession across three transactions collecting shares up to the $1.769 level, which represents a positive gain of 2.3 per cent.

Elsewhere in the market, a single transaction in Middlesea Insurance saw 172 shares being swapped across a single transaction without affecting its previous closing price of €3.85.

Eurozone economic review - weekly round-up

In data released this week, the European Commission indices showed that expectations for this year continued to deteriorate. The release confirms the declining trend observed previously in individual surveys; consumer and industrial confidence both fell in December. Latest unemployment figures remained constant at 7.2 per cent in line with market expectations; however, should the downward trend in expectations be realised labour figures will once again turn to the weaker side.

Inflation remains a concern. The Producer Price Index, an indicator of input prices and one of the main benchmarks used by the European Central Bank for decision-making, reached 4.1 per cent in December. This was considerably up from 3.3 per cent in the previous month. Analysts expect the inflation in the eurozone to remain above the acceptable target range in the short-term, before easing back during the course of this year and next year.

Altogether GDP growth should therefore slow this year in line with expectations, boosting spare capacity and reducing firms' pricing power. Together with the strength of the euro, a slight easing in oil prices and slower growth in food prices, this should drive core inflation down in the long run.

This article has been prepared by Bank of Valletta p.l.c. (the Bank), which is licensed to conduct investment services business by the MFSA, for your general information only. This information is not a solicitation or offer by the Bank to acquire or sell securities. Nor does it constitute any form of advice by the Bank. Appropriate advice should be obtained before making any such decision. Past performance is not necessarily a guide to future performance and the value of your investments may fall or rise.

BOVSL and VFM are licensed to conduct investment services business by the MFSA.