Weakness in the banking sector once again caused the MSE Index to terminate yesterday's trading session in negative territory, this time shedding 0.3 per cent to close at 4,530 points.
HSBC Bank Malta dropped 2c or 0.5 per cent as 6,942 shares were swapped across eight transactions. Initial trades saw the price rise slightly to briefly touch the €4.265 level before fresh supply squeezed the price down to close at €4.24. At the end of the session a further 458 shares remained outstanding at that price on the offer side against a bid for 1,000 shares demanding a price of €4.23.
Bank of Valletta, which is due to report its interim results following a board meeting set for April 29, shed 4c1 or 0.8 per cent to close at a new yearly low of €5.249. The day's trades consisted in 3,992 shares which were transacted across six trades.
FIMBank traded steadily at $1.91,5 with investors clearing up all supply at the level to leave the next offer for 10,000 shares demanding $1.94.
Go was the only equity to shine, even though its price moved up by the slimmest of margins to reclaim the €3 level on total turnover of 10,860 shares. Go's Cypriot subsidiary Forgendo Ltd, as announced recently, will be taking up its full entitlement and any unsubscribed rights which Forthnet SA, Greece's second largest internet provider has issued to finance the acquisition of two companies incorporated in The Netherlands.
Elsewhere in the market, trades executed in Malta International Airport, International Hotel Investments and Crimsonwing did not alter their previous closing prices of €3.378, €1.06 and €0.565 respectively. No deals were struck in 6pm Holdings when today the equity commenced trading without the right to receive a net interim dividend of 1.3p.
Weekly UK economic review
The Bank of England (BOE)'s announcement of a "Special Liquidity Scheme" stole most of the limelight during the past week. This facility is very similar to the TSLF (Term Security Lending Facility) created by the Federal Reserve. This initiative's primary objective is to allow UK lenders to swap mortgage back securities for gilts (UK government bonds), in an effort to induce them to start extending loans to home buyers again.
There are two major differences between the facility issued by the BOE and the one issued by the Fed; the length of the swap will be one year for the UK lenders versus 28 days in the US and the size of the facility is expected to be half that of the US in absolute terms, but larger as a proportion of mortgages outstanding.
Technically, the way this will work is the government, via the Debt Management Office (DMO), will issue Treasury Bills to the BOE, which will then swap the mortgage debt to the financial institutions already eligible to use the Bank's standing facilities. Unlike the nationalisation of Northern Rock, however, there should be no impact on the public sector net debt.
BOE's "Special Liquidity Scheme" has also received the blessing of credit rating Agency Fitch which views the scheme "as a positive development".
This article has been prepared by Bank of Valletta p.l.c. (the Bank), 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.