Following an active session on the Malta Stock Exchange on Wednesday, the MSE Index tumbled to close lower at 4,572, a reduction of 1 per cent from its previous daily reading. Banking sector equities were the main drag on the Index following a renewed bout of selling activity.
Bank of Valletta suffered a 10c or 1.9 per cent drop as 11,369 shares, carrying a market consideration of €60,089 were sold across 19 transactions. The equity terminated the session at €5.25, which represents its lowest level since early September 2005. Sentiment in the largest local bank in asset terms has been particularly weak since the interim director's statement issued in January 2007.
HSBC Bank Malta closed lower by the slimmest of margins as 1,350 shares were swapped at the €4.38,9-level, while 24,000 shares of FIMBank changed hands at the $1.909 level, which represents a 0.3 per cent discount over its previous closing price. Trading in Lombard Bank Malta was spread throughout the session, with all seven trades for 6,776 shares being executed at the current price of €13.
International Hotel Investments commenced trading without the right to receive three bonus shares for every 100 shares held, and the equity immediately corrected the dilution by shedding 5c or 4.6 per cent as 1,800 shares were swapped at €1.05.
Go gained 0.5 per cent towards the close of the session, terminating at €3.01,4, while a relatively high volume of Malta International Airport shares were exchanged over eight trades which brought about a gain of 2c or 0.6 per cent with the equity closing at €3.35.
Continued interest in Simonds Farsons Cisk pushed the price further, thereby closing at a yearly high of €2.60c. Following a spate of inactivity, a low volume of 655 shares of Grand Harbour Marina were swapped between two investors, leaving the price unchanged at €2.25.
Weekly UK economic review
The continued problems in the financial markets and the associated tightening of credit conditions led the Bank of England's Monetary policy committee (MPC) members to cut rates by 25 basis points on April 10. Of course the MPC has not abandoned its inflation concerns altogether. Indeed the statement said that "above target inflation this year could raise inflation expectations so that inflation would remain above the target".
Despite this, last month's Consumer Price Index (CPI) figures should give the MPC scope to continue cutting interest rates over the next few months to offset tightening conditions. The headline rate of 2.5 per cent was 0.1 per cent below the consensus forecast, higher inflation in transport was offset by a decline in most core components, led by clothing and housing.
In contrast the Retail Price Index (RPI) inflation slowed to 3.8 per cent from 4.1 per cent in February, as inflation in the housing component continued to decline. Housing inflation should remain a drag on the (RPI) in the next few months. In fact the message from Tuesday's RICS Housing market survey is clear, the downturn in the housing market is gathering pace as the credit squeeze reinforces the impact of the recent loss in buyer's confidence on average house prices.